Property
Is Paying Just 5 Times Your Annual Income for a Property Realistic?
By Singapore Property Blog  •  July 1, 2014
Is Paying Just 5 Times Your Annual Income for a Property Realistic?

By Mr. Propwise

In a recent blog post, guest contributor Property Soul shared her rules on buying a property you can afford, what she called the “3-3-5 rule”. In a nutshell, the “3-3-5 rule” states that:

  1. You should have at least 30% of the property’s price in initial capital to cover the downpayment and other costs.
  2. Your monthly mortgage payment should not exceed one-third of your monthly salary.
  3. The purchase price of the property should not exceed five times your annual income

Propwise.sg reader JC wrote in to comment that Rule #3 was unrealistic and overly conservative. Here’s what he had to say:

The five times of income to property price ratio is quite ridiculous. I feel that this ratio is only applicable during the “mata wear khaki shorts” days. How can one ever find such a low ratio of five times in today’s context? No way, even ...

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By Singapore Property Blog
Propwise.sg is a Singapore property blog dedicated to helping you understand the real estate market and make better buying, selling, renting and investing decisions – minus all the hype and misinformation ...
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