What households spend on housing
Housing costs average 23 percent of household disposable income. This is how the share differs between tenures, and how to compare your own numbers with the benchmark.
Updated: 2024
23 %
of disposable income goes to housing, average across all households
By tenure
Share of disposable income spent on housing, average per tenure. Amortisation counts as saving in the statistics and is excluded from the cost.
How to use the benchmark
Work out your own monthly housing cost and divide by household net income. Around 23 percent puts you at the average. The figures are a benchmark to compare against, never a verdict: the average includes households that have owned for years with small or no loans, so a household that just bought with a new mortgage naturally sits higher.
Can we afford it? Work out your share Debt ratio, share of net income and a stress test in three minutesHow large a share of income should go to housing?
There is no official limit. The average across all households is 23 percent of disposable income, but the spread is wide. Banks look at what the household has left to live on after housing costs rather than at a fixed percentage.
Why do renters spend a larger share than house owners?
Many house owners have owned for years and paid down their loans, which pulls the average down. Rent also covers maintenance and management, costs that house owners pay separately. Amortisation counts as saving and is excluded from the housing cost.
My share is higher than the average, is that a problem?
Not necessarily. The average includes households with small or no loans, so recent buyers almost always sit above it. What matters is the margin: work out your monthly cost at a couple of percentage points higher interest and check that it still holds.
Related
Heimer does this for you
Paste a listing and get the monthly cost, the risks to check, and what to check. In 30 seconds.
Try it free