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To think this is a massive mortgage?

(140 Posts)
catsbananas Wed 04-May-16 20:06:51

Just wondering if I am completely out of touch here. My sister emailed me today with a link to a house she is buying. They are moving from a house they have just sold for £250k, a pretty ordinary three bed semi. The new house is a detached five bed, which they are buying for £560k. I knew they wanted to move to something a bit more "forever home" but am honestly shocked at the price. Both work in the public sector, he in a managerial role in the health field on about £70k and she as a lecturer on about £50k and they are both 40. They have accumulated about £120k worth of equity in the old house. Yes, I know it isn't really any of my business but I was surprised that they are taking on this kind of debt. I wouldn't be able to sleep at night and the combined income of me and DH is only a bit lower. AIBU or is this a massive mortgage?

katemiddletonsnudeheels Wed 04-May-16 20:08:41

They've both got brilliant salaries, though.

readytorage Wed 04-May-16 20:09:47

If their combined income is £130k and they're potentially putting down £120k then it might be ok. I think it depends on your outlook. I could afford a much larger house but I can't be arsed with the huge debt, like you.

Babyroobs Wed 04-May-16 20:09:48

It's about 3.5 times their joint income which I don't think is unreasonable. I guess it depends on their other outgoings though, childcare costs etc.

orchidnap Wed 04-May-16 20:10:07

Aibu to think it's not your business to be posting on the internet?

GreaseIsNotTheWord Wed 04-May-16 20:10:15

I think YABU.

If they have £120k of equity, the mortgage will be for £440k against a household income of £120k...not even 4 x annual household income.

We're planning a move and our new mortgage will be about 4 x our income and is more than manageable.

BooAvenue Wed 04-May-16 20:10:22

Good for you! Why do you care? They can obviously afford it if they've been accepted for a mortgage confused.

catsbananas Wed 04-May-16 20:13:07

As I said in my post, I know its none of my business. I haven't said anything to my sister except how great the house looks. It just seemed like a massive debt to take on and I'm looking for perspectives on whether others view it that way or think this is usual. Its made me wonder if I'm out of touch in terms of the amounts that its typical to borrow. We have a much smaller mortgage though probably could borrow more, maybe I am very risk averse.

ToastDemon Wed 04-May-16 20:13:49

That sounds about right to me with their salaries and equity.

ChicRock Wed 04-May-16 20:17:19

Unless you know the ins and outs of all of their finances, you can't know that they're getting a huge mortgage.

Maybe they've had some kind of windfall, or a cash gift from his parents, or won a few hundred grand on the lottery, and they don't want to tell you because, well it's none of your business?

whois Wed 04-May-16 20:17:30

Well it's not even 4c their joint income, for 25 years of working life until they are 65. Not that unreasonable.

Deoends what their outgoing are like as well.

PotteringAlong Wed 04-May-16 20:17:33

I don't think they will have been able to get a mortgage past retirement age so they're obviously sure they can pay it back.

Turquoisetamborine Wed 04-May-16 20:18:15

It still leaves them with about £4K a month for the rest of their bills so I think it's fine.

QuiteLikely5 Wed 04-May-16 20:18:42

After tax they are taking home a tidy sum and a mortgage with that deposit would only cost circa £1800 pm.

catsbananas Wed 04-May-16 20:19:44

It looks like the consensus so far is that its a fairly normal amount then. I know from speaking to my sister that they are definitely borrowing to buy it and have not won anything! I guess they both seem to have quite ordinary jobs to me but the house is more than half a million. Maybe its weird or I'm out of touch to be surprised by that.

Queenbean Wed 04-May-16 20:22:03

Not a massive mortgage. YABU

financialwizard Wed 04-May-16 20:22:10

They would not be able to get a mortgage unless they passed strict affordability with the lender, and credit check. Lenders have to stress test on historic rates now to ensure client affordability.

The rest is their choice. Their life, their home, they choose what to spend on.

WordGetsAround Wed 04-May-16 20:22:14

I wouldn't take on that amount of debt at that age. I'm not particularly cautious financially, but that seems like a lot to pay off post 40. If 10 years younger, I would definitely go for it though!

dailymailareabunchofwankers Wed 04-May-16 20:22:56

To me it seems a lot - however I'm planning to semi-retire in my early/mid 50s (about 10 years time) so I wouldn't want to be saddling myself with a huge mortgage at this point in my life, that I'd potentially still be paying off at 60+.

Just out of interest though, what would the repayment be on a £440k mortgage?

Bragadocia Wed 04-May-16 20:23:40

The repayments would be about £2200? And their combined take home is about £7k. I wouldn't have a problem taking that on. That leaves them £1000 per week for everything else, which is masses! They'll probably easily be able to over pay.

Orda1 Wed 04-May-16 20:26:22

They're not normal salaries though. Sounds alright to me, only 40!

RobinsAreTerritorialFuckers Wed 04-May-16 20:30:51

Depends very much where they are, surely? Are they moving a big distance - if so, that might explain it?

There are parts of the country where people do take on big mortgages, just because housing is quite expensive. You are all obviously well off, so I don't think you necessarily need to worry?

diddl Wed 04-May-16 20:31:17

Seems a lot to be also to be mortgaging to the hilt at 40.

dragonsarebest Wed 04-May-16 20:33:59

I get that it's perfectly reasonable given their salaries etc but I would not want to take on that much debt, so yes it does sound like a lot to me. I have a bit of a thing about owing money though so we have a smaller house (and mortgage) than we could have and are working hard to pay it off early.

RubySparks Wed 04-May-16 20:34:34

That debt would scare me! It seems like a huge amount to me but I'm risk averse too. We bought small house and extended to get extra space and then overpaid mortgage as much as possible and paid it off 5 years early. I would not want to have to work full time in my 50s and 60s! The main thing about money though is it gives you choices, my choice would be disposable income now rather than bigger house meaning working longer but their choice is obviously different!

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