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Comment by kfk | Hacker News Reader

As we are on the topic, which percentage of your salary going to pay up rent would you consider "sane"?

Edit: I mean post tax. It's a cultural thing, in Italy we don't ever consider the gross salaries.

(UK)

Mortgage is 36% of our combined post-tax wages (there's no tax relief on mortgage interest in the UK). Childcare is another 21%.

(Mortgage and childcare combined would be 100% of my post-tax wage!)

Seems harsh now but it's worth it, and when the childcare costs drop (next September) there will be more money for holidays, more fun and also paying off the mortgage early.

Mortgage payments, for fixed rate mortgages anyway, aren't affected by inflation unlike rent payments. In 10 years time my mortgage payment should be smaller than it is now (as I hope to overpay) but my salary should rise; we have the bonus that we'd be happy to stay in this house for at least 20 years if need be (it was one of our criteria when looking for somewhere to buy).

The above may not seem sane, but the figures are quite normal for the UK tech sector.

The United States is a very big place, so you'll see a lot of variance in the outcome of this math. For example, my rent is only about 1.2% of my post-tax income. Pre-tax, it's only 0.8%. My savings rate is over 30%.

This is only possible because I live in Florida (in a non-metropolitain area), but am a shareholder in my own company with revenues that support incomes that is much higher than is typical for my market.

Mortgage is 11% of my salary (post-tax, excluding bonuses and my wife’s salary). We are spending a good amount of cash and time renovating, so our real housing expenditure is somewhat larger than that.

Broadly speaking, I consider numbers up to ~20% sane. Much beyond that starts to seem ill-advised (but personal preferences are important here, too).

0%. I saved up and bought the cheapest house I could for cash escape the high cost of rent around London.

I can now save double quick for my longer term house.

It's a short term pain living in a small flat with a long commute, but the strategy will hopefully pay off in the long run with all of the rent and mortgage interest avoided.

As a side note, when people say "percentage of your salary" are they referring to pre or post tax? This is never clear to me and I wish people would state it explicitly.

I always do my calculations with the net amount. I don't see why you'd want to include a portion you're definitely going to lose unless you're trying to make the figures work…

Also, I don't like to include bonuses unless they're actually guaranteed.

It should be post-tax, but I think a lot of people forget that their nominal salary is not all take-home pay.

I agree that it should be post tax, but nobody uses post-tax figures when stating how much money they make so it's often not clear which "15% of income" they are referring to.

"They" say you shouldn't spend more than 30% of your income on housing. Although something closer to 20% seems more sane, which is where I am at (renting).

Mortgage is 34% post tax salary (for the couple). the interest for the loan is 3.05% (fix interest).

Do you in Italy have more fix or moving interest rate ?

I spend 17% of my net wage on my mortgage. I'd probably be happy doubling that once I've built up a larger rainy day reserve.

15% of my post-tax wages go towards rent

EDIT: That's 11% of my pre-tax wage

That is very low. In Munich most people are in the 30-50%. I was in the 17%, but that's just because most of my rent is paid out by the company I work for. Otherwise it would be around 30%.

Where I live in the US I'm at 30% post-tax. I could probably get this down to about 20%, but I'd be adding on an hour or more of commute each way, and I'm in a pretty desirable part of the city.

50% of a tech industry salary going to rent is pretty scary.

Extrapolating from some of the numbers thrown around in the article, about 18%.

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