THE GLOSSARY · HOUSING
Housing ratio
The share of your income that goes on housing. It is the figure your lender looks at first, and the one that decides your room to manoeuvre.
By the Yoseri News desk · · 1 min read
Add up what housing takes from you each month — your rent, or your mortgage instalment with taxes and insurance — and divide by your income. You have just worked out your housing ratio. On $1,250 of housing out of $4,400 of income, it comes to 28.4%.
This figure decides everything else, because housing is the one expense you can neither cut nor push to next month. The higher it climbs, the less your budget absorbs the unexpected.
You really feel it at a mortgage renewal. On a balance of $206,180, going from 4.64% to 5.64% adds $118 a month — and lifts your housing ratio from 28.4% to 31.1%. At 6.50% it reaches 33.5%, and what you have left at the end of the month melts from $640 to $415.
In Yoseri, your housing ratio is shown next to your savings rate on the Budget page, and the instalments that make it up on the Debt page.
Where the figures come from
The maths in this article starts from the assumptions written above. Run them again with your own figures — you should land on the same numbers.
Yoseri News is an educational publication. Nothing in this article is investment advice, a recommendation to buy or sell, or tax advice. Yoseri is registered as neither an adviser nor a dealer with any market authority.