Yeah for me its about how much I have left after all outgoings + building a buffer for unknowns.
I think a key thing people should do when assessing taking a mortgage on is to do a financial stress test/sensitivity analysis for possible significant changes e.g.
- Interest rate changes
- 1 income vs 2 - incl what sort of duration you could tolerate
- Shocks e.g. health issues / deaths etc
- Significant purchases required in the short/med term
And based on this work out what level of mortgage outgoings you could tolerate and also what level of emergency funds you may want to try and set aside.
I remember reading somewhere that the vast majority of people were 3 months (?) away from being homeless/losing their homes should their primary income dry up - which is a freaking worry : /