Description
The Mortgage Payment to Income Ratio (MPIR) is calculated by dividing the median housing price by the median annual household income to assess a household’s housing affordability. The calculation is based on a 20-year equal principal and interest repayment term, with a loan-to-value ratio of 70%. The monthly principal and interest repayment amount is determined, and then the MPIR is derived by dividing this repayment amount by the median monthly disposable household income.
MPIR represents the ratio of the monthly principal and interest repayment for a median-priced home to the median monthly disposable household income. A higher ratio indicates lower housing affordability.
The affordability levels are categorized as follows:
50% or above: Extremely unaffordable housing.
40% (inclusive) to 50% (exclusive): Low affordability.
30% (inclusive) to 40% (exclusive): Moderately low affordability.
Below 30%: Reasonably affordable.