[wutbrodo]

The obvious (and often unrealistic) answer is to buy a much, much cheaper home and save much more. Other than that, "low debt" isn't well-defined and all debt isn't created equal. If you get a mortgage whose payments give you a lot of wiggle room based on your income and expected future income, most people wouldn't have trouble including that situation among "low debt".

[rubicon33]

Gotcha. That's the boat I've been in. I want to avoid debt as much as possible, but unless I'm willing to live in a really rough neighborhood, I will need to buy a home that is roughly 3.5x my gross yearly pay (before taxes). That's a lot of debt.

The payments however, are manageable. So I suppose it is helpful to frame "low debt" in that way.

[wutbrodo]

At some level, it's a pretty reasonable definition: having all your liquidity tied up in a single asset doesn't make a lot of sense, so having a house with a mortgage secured on it is just a way of getting somewhere between renting and buying outright without having to swing to the other extreme. The main risk you're faced with is a drastic drop in value right after you buy it, but that shouldn't affect your day-to-day if your payments were affordable in the first place.

[mark-r]

That was the point of the article though, payments that are affordable today may not be tomorrow if your income takes a hit.

[wutbrodo]

Right of course, which is why some estimate of future expected income is important, including a buffer for lowered income in the future.

[itronitron]

3.5x your gross yearly pay sounds fairly typical. You should really only care about your monthly mortgage payments. If you have student loan debt then you should try to roll that into your mortgage if it has a much lower rate.

[dalyons]

Not typical everywhere... The median wage / house price in sydney & melbourne are 13x and 10x respectively. And you pretty much have to live in one of those two cities if you want a decent job in Australia. The country’s in for a lot of pain if there’s a big recession.

[acjohnson55]

Through the new school student loan consolidation firms, you may be able to get better interest rate on your student loan debt than your mortgage. This was the case for me. I used Common Bond.

[neumann]

Come to Australia, where in capital cities, the median house prices are ~8x the median income!