The pandemic and the capacity to save derived from the confinements, together with the availability of credit and low interest rates, seem to have fueled a period in which the contracting of mortgages has been on the rise.
Specifically, during the first half of 2021, figures that had not been seen since 2010 have been achieved . The sector as a whole granted in the first half of this year almost 30,000 million for the purchase of housing to individuals, a figure not seen since the end of the real estate boom, in 2010. Then, the amount rose to 37,000 million.
But, beyond the debate about whether to choose a fixed or variable rate mortgage , how much can we afford to spend on a mortgage? Or, similarly, from a rental?
The most common rule to determine how much we can spend on a home is that it should not be more than 25% -30% of the gross monthly income of the family unit.
In the case of tenants, that 30% includes the rent and the costs of services such as heating, water and electricity. If we are mortgaged on our home , we must include interest, homeowners insurance, property taxes, and utilities (such as IBI), in addition to the mortgage.
The 30% rule is based on how much a family can reasonably spend on the home and still have enough money to meet everyday expenses, such as food and transportation, as well as being able to save or cope with the unexpected.
From the 30% rule to those of 28/36
Worse as Make it collects , some financiers also recommend using the 28/36 rule to determine what we can afford.
The 28/36 rule stipulates that for a home to be considered within an adequate budget, housing expenses (such as mortgage payments, taxes and insurance) should not exceed 28% of gross monthly income . Total remaining debt (including credit cards and loans) must not exceed 36% of gross monthly income.
If we are married or have a partner, we must bear in mind that this calculation includes the whole family
This is especially relevant for people who have bought their house or are paying the bill for a new car, and who have a higher level of indebtedness. In total, the cost of housing and other debts should never exceed 64% of gross income according to this criterion.
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