How much monthly income should you spend on your home loan?

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Buying a home could easily be one of the biggest purchases many of us will make in our lifetime – and if you have taken a housing loan to fund your dream home, you’ll likely be paying it off for years, even decades maybe! But did you know there’s also such a thing as spending too much on a house? You could be left with little money for other goals in life, such as retirement, education funds, vacations, or your passions.

Rule of thumb

While it’s not set in stone, the general consensus from financial planners and experts suggests that expenditure on property loans/rent must not exceed 40% of your income. Most lenders will calculate this for you based on your income size, income stability, credit score, down payment size, and other factors, but don’t let them make you bite more than you can chew.


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