Whether you’re a young professional renting your first flat or experienced homeowner considering a new home purchase, it can be hard to know how much money to spend on housing. In this article, we outline some basic guidelines to help you estimate how much you can afford to pay for your home.

General Rule of Thumb: Housing Costs Should Not Be More Than 30% – 40% of Income

Experts typically suggest that you should spend no more than 30% to 40% of your gross monthly income on housing. These limits are designed to allow room for expenses for basic necessities such as food, transportation, health care and personal savings. It is important to note that these suggested housing budgets include rent and mortgage payments, as well as other related housing costs such as utilities, maintenance or homeowners insurance. For an individual earning S$50,000 annually, this translates to S$1,250 to …