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How Much House Can You Really Afford?

  • Writer: John Negrila
    John Negrila
  • Mar 18
  • 2 min read

Buying a home isn’t about the maximum loan you can get—it’s about what you can comfortably afford long-term.


💰 1. Start with the 28% Rule

A common guideline:

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

This includes:

  • Mortgage

  • Taxes

  • Insurance

Example:If you earn ₱50,000/month👉 28% = ₱14,000 max housing budget


⚖️ 2. Consider the 36% Total Debt Rule

Your total monthly debts (including housing) should not exceed 36% of your income.

Includes:

  • Housing

  • Car loans

  • Credit cards

  • Other debts

👉 This keeps you financially stable.


💸 3. Don’t Forget Hidden Costs

Many first-time buyers underestimate this.

Add:

  • Maintenance & repairs

  • Utilities (electricity, water, internet)

  • HOA or association fees

  • Property taxes

👉 Real cost = more than just monthly payment.


🧠 4. Think Lifestyle, Not Just Numbers

Ask yourself:

  • Can I still save money?

  • Can I handle emergencies?

  • Can I still enjoy life?

👉 If the house makes you feel “tight” every month—it’s too expensive.


📉 5. Avoid Being “House Poor”

This happens when:

  • Most of your income goes to housing

  • You struggle with daily expenses

👉 A smaller home with peace of mind is better.


💡 6. Factor in Future Changes

Think ahead:

  • Job stability

  • Family growth

  • Possible income changes

👉 Don’t base decisions only on your current situation.


🏦 7. What Banks Say vs Reality

Banks may approve you for a higher amount…

👉 But that doesn’t mean you should take it.

  • Banks = what you can borrow

  • You = what you should borrow


🧮 Simple Affordability Guide

Monthly Income

Safe Home Budget

₱30,000

₱8,000–₱10,000

₱50,000

₱12,000–₱15,000

₱80,000

₱20,000–₱24,000

₱100,000

₱25,000–₱30,000

👉 Adjust based on your debts and lifestyle.


💡 For You (Real Estate Insight)

When advising clients or planning investments:

👉 Focus on comfort + sustainability, not just approval limits.

This leads to:

  • Happier buyers

  • Fewer defaults

  • Better long-term decisions


🏁 Final Thought

You can afford a house when:

  • You can pay it comfortably

  • You still have savings

  • You’re not stressed every month

👉 The best home is not the biggest one—it’s the one you can afford with peace of mind.

 
 
 

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