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Mortgages

(5 Posts)
Tomatoesareyum Tue 17-Nov-15 19:27:08

We are currently selling our house and looking to buy a new one. We will be able to put down a 50% deposit but will need to mortgage the rest. We are looking at 10 year fixed rates so that we know we can afford repayments regardless of interest rates and have found a good deal which we feel is more than affordable.

I work part time and earn just enough to pay a bit of tax. Husband is a high earner (just into 45% band) and for the last 8 years his bonus on top of that has been between 50-80% of his salary. We are looking to borrow 4x his basic salary as we know that lenders don't tend to take bonuses into account although we gave no reason to think this won't continue. Is this likely to be a problem? We have no debt but pay one set of school fees from my income and will do for another 5 years and have 5 terms of another set of school fees until said child leaves the school. However the second set fees are already ring fenced in a separate account so assume that we wouldn't need to declare these.

MairyHoles Tue 17-Nov-15 19:40:05

The 45% tax rate starts at £150,000 or thereabouts so I assume you are borrowing £600k for a £1.2m house. If you have the school fees in a separate account then they may not be taken into account, since they are not income, but they can be used to prove affordability - you won't need to pay fees from your earnings. If the bonus is discretionary then they may well not use it when working out affordability but if it's contractual then it is more likely to be counted.

atticusclaw2 Thu 19-Nov-15 08:16:55

I think you should be fine. With that level of deposit the banks will be more relaxed. As long as your DH's job is secure (clearly you couldn't survive n your salary alone) then from what you've said I doubt you'll have much of a problem.

You should declare the second set of fees otherwise they'll think these are coming out of your DH's income and reducing his borrowing capacity accordingly.

Tomatoesareyum Thu 19-Nov-15 19:08:57

Thank you, there's no reason to assume his job isn't secure and in an emergency we could sell and still have enough to downsize

LaFlottes Fri 20-Nov-15 11:54:54

I thought that lenders would take a certain percentage of bonuses into account? So that might be an option if need be?

Maybe ask a broker?

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