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How Much House Can You Really Afford?

  • Writer: Sandiya Venturato
    Sandiya Venturato
  • Feb 10
  • 2 min read

Figuring out how much house you can really afford isn’t just about what the bank approves, it’s about what you can comfortably live with every month.

Here’s a simple, practical way to calculate it:


💰 Start With the 28% Rule

A common guideline is:

👉 Spend no more than 28% of your gross monthly income on housing.

Example:

  • Income: ₱100,000/month

  • 28% = ₱28,000 max housing cost

This should include:

  • Loan payment

  • Taxes

  • Insurance

  • Association dues

👉 This keeps your finances balanced and stress-free.


🏦 What Banks Will Approve vs Reality

Banks may approve you for more than you should spend.

Why:

  • They base it on maximum capacity

  • Not your lifestyle or daily expenses

👉 Just because you’re approved for ₱40k/month doesn’t mean you should take it.


🧾 Factor in All Hidden Costs

Your real cost is more than the monthly loan.

Include:

  • Maintenance and repairs

  • Utilities (electricity, water, internet)

  • Property taxes

  • HOA or condo dues

👉 These can add ₱5k–₱15k+ monthly depending on the property.


💳 Consider Your Lifestyle & Debts

Your house should fit your life, not control it.

Ask yourself:

  • Do I have other loans (car, credit cards)?

  • Can I still save money monthly?

  • Can I handle emergencies?

👉 If your house payment makes you “house poor,” it’s too expensive.


🧠 The Safer Formula (Real Talk)

Instead of maxing out, aim for this:

  • 25% or less → Very comfortable

  • 25%–30% → Manageable

  • 30%–40% → Risky

  • 40%+ → Financial stress zone


🏡 Quick Sample Scenario (Philippines)

Let’s say:

  • Income: ₱80,000/month

  • Safe budget (25%) → ₱20,000 housing

👉 Estimated home price range:

  • Around ₱2M–₱3.5M property (depending on loan terms)


⚖️ Condo vs House Affordability

  • Condo: Lower upfront, but has monthly dues

  • House: Higher upfront, but no dues (just maintenance)

👉 Always compare total monthly cost, not just price.


🚨 Warning Signs You’re Buying Too Much House

  • No savings after paying monthly

  • Relying on bonuses/extra income to survive

  • Can’t handle emergencies

  • Feeling stressed about payments


💡 Final Thought

The right house is not the most expensive one you can buy, it’s the one you can comfortably afford while still enjoying your life.

👉 A smaller home with peace of mind is always better than a big home with constant stress.

 
 
 

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