👉 The mortgage-to-rent ratio is like comparing how many eggs you can safely eat before you start feeling sick, right? It's a measure of how much money you have for housing when your income is low and the market value of your home falls.
Example: Imagine you're a high-income person with a lot of savings, but your rent goes up 10% and the house you own becomes less valuable. Now, if your mortgage-to-rent ratio was 25%, it would mean that your savings can only buy you 25/30 or 7.84 eggs per week. Isn't that weird? It's like saying your savings are like the food in a box when you're hungry and the boxes of cookies are only available for a day at the grocery store, right? And if they're all gone before you even get to eat something delicious? But remember, it's important not to overextend yourself. If your rent keeps rising and you still struggle with making ends meet, that's where the mortgage-to-rent ratio really comes in handy.
