Forum Archive Index - February 2003

["John Ascroft" <jascroft@jadeworld.com>]

It all depends of course, obviously relating the income to the house price only 
really works for the first house.
Assume there is no
interest and you earn 50,000 - then you could buy a 150,000 house (which in 
ChCh would get you a livable 3br in a less
popular
area). By paying a third of your salary off it, then it would be paid off in 9 
years. Then using the same rules you
could buy a
$300,000 house. If nothing else, I think the rule should be that the mortgage 
is approx 2.5 to 3x your annual salary.
This make a lot
more sense. The banks have their own sets of rules for affordability, from 
memory they don't want to see more than 40%
of your
income on mortgage costs.


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