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AIBU?

To think this is a massive mortgage?

139 replies

catsbananas · 04/05/2016 20:06

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?

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katemiddletonsnudeheels · 04/05/2016 20:08

They've both got brilliant salaries, though.

readytorage · 04/05/2016 20:09

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 · 04/05/2016 20:09

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 · 04/05/2016 20:10

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

GreaseIsNotTheWord · 04/05/2016 20:10

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 · 04/05/2016 20:10

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

catsbananas · 04/05/2016 20:13

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.

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ToastDemon · 04/05/2016 20:13

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

ChicRock · 04/05/2016 20:17

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 · 04/05/2016 20:17

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 · 04/05/2016 20:17

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 · 04/05/2016 20:18

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

QuiteLikely5 · 04/05/2016 20:18

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

catsbananas · 04/05/2016 20:19

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.

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Queenbean · 04/05/2016 20:22

Not a massive mortgage. YABU

financialwizard · 04/05/2016 20:22

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 · 04/05/2016 20:22

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 · 04/05/2016 20:22

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 · 04/05/2016 20:23

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 · 04/05/2016 20:26

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

RobinsAreTerritorialFuckers · 04/05/2016 20:30

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 · 04/05/2016 20:31

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

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dragonsarebest · 04/05/2016 20:33

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 · 04/05/2016 20:34

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!

catsbananas · 04/05/2016 20:34

Maybe my attitude is too cautious. I just thought if one of them lost their job (quite possible in the public sector these days) then that could leave them in a tough situation. We are keen to pay our mortgage off early and have a small or no mortgage by about 50 so I guess their priorities are just a little different.

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