By Thierman Financial

What is the 30% Rule to Avoid Becoming House Poor?

May 1, 2025 | 10:41 AM

The views and opinions expressed in this editorial are those of the writer’s and do not necessarily reflect the views or positions of Pattison Media.

5 signs you might be house poor

When deciding how much house you can afford, a common guideline is the 30% rule —your housing costs (including mortgage, property taxes and insurance) shouldn’t exceed 30% of your gross monthly income. If your housing expenses are above this threshold, you could be at risk of being house poor.

But being house poor isn’t just about dollars and cents — it’s also about the sacrifices and strain that can come with homeownership.

Here are five other signs that might indicate you’re house poor:

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1.      Are you struggling to pay for necessities?

• You find it difficult to cover monthly costs like groceries, utilities, and are living paycheque to paycheque.

2.      Do you have little to no savings or an emergency fund?

• You’re unable to set aside money for an emergency fund, retirement, or future goals because your housing expenses eat up most of your budget.

3.      Are you paying for space you don’t need?

• You have empty rooms in your home without furniture, and you’re essentially paying for unused space that adds to your financial burden.

4.      Do you feel constant financial stress?

• You’re frequently worries about money, particularly when it comes to unexpected costs like home repairs or rising interest rates.

5.      Have you sacrificed lifestyle essentials?

• You’ve delayed replacing your car, upgrading home furnishings or taking vacations to keep up with mortgage payments.

Short- and long-term impacts of being house poor

Being house poor affects more than just your bank account.

Here’s how it can impact you both in the short and long term:

Short-term impacts of being house poor

• Financial stress and anxiety
• Inability to save for emergencies or future goals
• Reliance on credit cards and loans to cover day-to-day expenses
• Lifestyle sacrifices, such as forgoing vacations or new purchases
• Missing out on important life experiences (travel, hobbies or family events)

Long-term impacts of being house poor‍

• Delayed or insufficient retirement savings
• Increased debt and financial instability
• Limited ability to upgrade or maintain your home, leading to costly repairs later
• Strain on personal relationships due to financial pressure
• Restricted ability to pursue personal goals like starting a business, going back to school or moving for a better job opportunity
• The risk of defaulting on other debts as more income goes toward housing costs

What to do if you regret your home purchase or mortgage

While a Wahi survey found that 76% of Canadians who bought a home in the last five years say they have no regrets, that still leaves a significant 24% of homeowners who do.

Whether it’s due to rising interest rates, unexpected costs or simply feeling financially overwhelmed, many Canadians find themselves regretting their home purchase or mortgage commitment.

In fact, a survey by the Real Estate and Mortgage Institute of Canada (REMIC) revealed that 34.1% of Canadians regret the mortgage they’ve committed to. This isn’t surprising when you consider that nearly half of those surveyed (around 45.2%) believe they won’t be able to pay off their mortgage until they’re 60 years old, and 8.2% think they’ll be 80 or older before they’re mortgage-free.

If you find yourself in this situation, it’s important to know you have options. Whether you’re struggling to afford your mortgage or simply feel like you’re stuck with a bad deal, there are steps you can take: