The 30% rule is a rough guide that says your housing costs should stay under 30% of your gross income. Treat it as a sanity check rather than a target — your real ceiling depends on your other commitments, rate buffers and lifestyle.
In our experience, the 30% rule is most useful as a gut-check, not a green light. The buyers who get stretched usually aren't the ones a point or two over the line — they're the ones who treated the bank's maximum as their budget, or who forgot that the same repayment sits very differently on two different incomes.
The rule of thumb: if more than 30% of your pre-tax household income goes to the mortgage, you're in "mortgage stress." It's a useful starting check, but a higher-income household can run at 35-40% and still save; a lower-income one can feel squeezed at 25%.
Better question: after the mortgage, fixed bills, and realistic monthly spending, do you have anything left for an emergency fund and savings buffer? If not, you're stretched — regardless of where the 30% line falls.
In practice
The 30% rule in practice
We regularly see buyers treat the 30% rule as a hard limit — either ruling out a purchase because it tips just over the line, or feeling safe because they're comfortably under it. In practice it works better as a flag than a target.
The patterns we see:
- Higher-income households running above 30% who still save comfortably, because their fixed costs leave plenty of room.
- Lower-income households feeling stretched well under 30%, once other commitments are counted.
What we encourage buyers to ask instead is the more honest question: after the mortgage, the fixed bills and realistic monthly spending, is there anything left for an emergency fund and a savings buffer? If not, you're stretched regardless of where the 30% line sits.
The takeaway: use 30% as a sanity check, then test it against your real budget.
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