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What is formula for rental affordibilty?
luminated
Posts: 1,168 Forumite
Is there one or are there any online calculators around?
Would be grateful for any help?
Would be grateful for any help?
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Comments
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I believe it's 2.5 x your annual salary ie if rent is £795 you'd need to be earning £23,850+. This is combined if you're renting as joint tenants x0
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Its usually 125% of the mortgage repayment at 6% interest based on an interest only basis.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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Does the OP want to be a landlord and work out how much he can borrow, or does he want to be a tenant and work out what property he could rent?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Sorry should have been clearer I will be tenant.0
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Sorry should have been clearer I will be tenant.
Then affordability will depend on your other expenditure I suspect. Why not set up a statement of affairs showing income and expenditure and see what you can actually afford, rather than relying on a calculator. As a very rough rule of thumb I would suggest that if you are spending more than a third of net income on rent you are paying too much.
it may be however that whoever does the reference/credit checking for any place you want to rent will use some calculation too.0 -
getmore4less wrote: »Money left after paying everything else > rent = affordable
Certainly not.
Because one day the tenant will have a large bill to pay and if he is that tight he will have to choose between paying that bill and paying the rent.
If one needs a working car to go to work he will pay related bills before paying your rent, for example, and just tell the landlord "Sorry, rent will be late this month as I had an unexpected expense".
A fairly standard and reasonable rule of thumb is that rent should not exceed about 1/3 of income.0 -
I thought that a good guide was 1 week's gross salary should be approx 1 months rent0
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jjlandlord wrote: »Certainly not.
Because one day the tenant will have a large bill to pay and if he is that tight he will have to choose between paying that bill and paying the rent.
If one needs a working car to go to work he will pay related bills before paying your rent, for example, and just tell the landlord "Sorry, rent will be late this month as I had an unexpected expense".
A fairly standard and reasonable rule of thumb is that rent should not exceed about 1/3 of income.
if that happens then they have not included everything which is what I said.0 -
getmore4less wrote: »if that happens then they have not included everything which is what I said.
Please... Let's be serious.0
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