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Mortgage to income ratios?

(22 Posts)
leolion Mon 23-Dec-13 13:36:05

Just interested in other people's positions and thoughts about affordability. We have been talking about moving from our 3 bedroom modest house for a while now but we are not sure whether it's sensible or not and would be grateful for other people's views. We look at people around us moving up to bigger and better properties and wonder how they do it. We do need to move as we have 2 DDs, a dog and both my husband and I work from home. This would mean however adding about 100 k on to our present mortgage.

At the moment we pay £930 per month mortgage and £230 month car loan. Our mortgage payments would go up by about £400 pre month. We bring in after tax about £4800 per month. However, we are not great with money, but not lavish either, and we never seem to have spare cash. Would you say that the current figures appear affordable to you if we were to move, and what are your mortgage to income ratios like? (Obviously understand if you don't wish to share!)


OliviaBenson Mon 23-Dec-13 17:52:27

Our mortgage is £800 per month and we bring in £4k between us. It does sound quite a lot extra for you. Could you save the difference between your old mortgage and new one now to see how you cope day to day? It will give you savings too for more of a deposit or stamp duty etc.

Mum2Fergus Mon 23-Dec-13 22:01:51

Between us we bring home approx £3.5k per is £413.

learnasyougo Tue 24-Dec-13 14:27:55

we bring home 1.6k after tax, no mortgage and no car, though. we live frugally (don't exactly have much choice) but basically we have 1k per month once all direct debit bills -fuel, council tax, water, broadband are paid, this we spend on food, clothes and nice things. we always have money left over at the end of the month so don't feel hard up.

SuckItAndSee Tue 24-Dec-13 14:30:02

ours is relatively low at the moment, but don't forget that interest rates can only really go one way - it's a question of when they'll rise, not if.

we're currently saving the different between what our variable rate mortgage costs us at the moment, and what it would cost if rates went up a few %.

NoArmaniNoPunani Tue 24-Dec-13 14:33:20

We bring in 4600 per month and our mortgage is £713. This was the most we were allowed to borrow

purplebaubles Tue 24-Dec-13 14:40:34

Really? You have nothing left over? Our mortgage is £700 and we only bring in £1500 a month. I think you need to look at where you're spending wasting your money! ;)

titchy Tue 24-Dec-13 14:52:20

Agree with baubles - wtf do you spend your money on? You must be seriously bad with money if you have nothing left at the end of the month.
We take home £4500 a month, our car loan is half yours but DH spends £500 a month commuting. Our mortgage is an eye watering £2500 a month. Top band council tax and 4 large mouth to fees too.

Write down everything you spend in a month and get it under control.

NoArmaniNoPunani Tue 24-Dec-13 14:54:16

I don't understand how some people are allowed to have such big mortgages and we weren't

YellowDahlias Tue 24-Dec-13 15:09:03

Our mortgage is £1100 a month and we have an income of circa £4k a month. Our mortgage was assessed on income of £3k a month. We have a large mortgage on salary to loan ratio - way larger than I'd ever thought we'd get. However we have no other loans, debt, etc. Our childcare costs are currently very minimal.

We had a massive deposit so our loan to value ratio is very good and we're very likely to get a significant inheritance in the next couple of years which should clear a big chunk of the mortgage.

We paid higher rent that we do with our mortgage. We'd manage if interest rates rise to 7-8%.

TalkinPeace Tue 24-Dec-13 15:17:19

on the money matters board is the thread about the cost of credit cards and mortgages that also has a budgeting sheet on it ...

remember that there is only one direction Mortgage costs can go - upwards

old folks like me remember the base rate being 15% - 30 times what it is today

squiby2004 Thu 26-Dec-13 00:05:47

Our mortgage is £1675 and we being in £6.3k
a month. This is quite near to the maximum
If what we could borrow. I do worry about interest rates going up as current deal us fixed at 2.59% so a 1% increase will put our payment up a lot!!

Mum2Fergus Thu 26-Dec-13 08:55:00

We were initially offered double what we were looking for when we did 'approval in principle'. As tempting as it was we've always agreed to kelp our outgoings within the limit of one of our salaries,so should one of us lose our job we'll still cope financially.

BrownSauceSandwich Thu 26-Dec-13 17:43:32

I don't this is the time to be overstretching yourself with a mortgage. If you don't have spare cash at your current mortgage, you're going to struggle with a higher one. Why not experiment, safely, by overpaying your mortgage by £400/month for the next 6 months to a year. If it all goes swimmingly, you'll accrue equity to help with your loan extension and you can be more confident in taking the risk. If you don't manage it every single month, then ask yourself what you'd do if you if that was the minimum payment you couldn't meet.

Aside from the likelihood of rates rising, the increased loan to value ratio will restrict your choice of deals, and you won't necessarily get as good a rate as you have now.

Mum2Fergus Thu 26-Dec-13 19:59:04

Excellent idea Brown Sauce...

leolion Thu 26-Dec-13 21:26:53

Thanks very much everybody, really useful opinions. It's definately given us some things to reflect upon and brown sauces's idea is a really sensible one.

For those who are asking what the hell we do with our money, it's been an expensive year for one reason or another -dh and I have had loads of necessary and very expensive dentistry, new bathroom, big family birthdays, and we are also in the south east! However, I take on board totally what you say, that we need to examine our monthly outgoings and manage things more economically.

Thanks again and keep the views coming.

Notyetthere Sat 28-Dec-13 16:53:21

We take home £3k and our mortgage payments are £1230. I find that it is a high mortgage/salary ratio and we have to be very careful with our monthly budgeting as there is not much room for unplanned frivolities.

As advised by others make £400 overpayments to your mortgage for a few months to see how you manage. I also recommend you complete a statement of affairs to see where your money is going.

SweetCicely Sat 28-Dec-13 20:51:20

We take home around £3,200 and our mortgage repayments will be around £860 a month. We tried to keep the monthly repayments to around 25% of our income so we can manage if interest rates rise.

purplebaubles Sat 28-Dec-13 21:10:06

You clearly need Denplan then grin £30 a month each!

ARealPickle Sat 28-Dec-13 21:40:25

Wow at the high salaries. Sigh. Mortgage here for a rubbish house is about 4-500 and on a low income.

mrscog Sat 28-Dec-13 21:47:23

We bring in around 3.5k a month and our mortgage is £299 per month, we will need to move at some point though so this is not a long term realistic picture but we're going to try and wait until interest rates start to rise which should quell the market a bit.

TitsMcGhee Sat 28-Dec-13 22:02:12

Our net income is c £3500 and our mortgage repayment is around £650. This is fine. We have spent a lot doing things to the house in the past year. Now that Xmas is out the way I would like to start overpaying on the mortgage. I had been thinking that we could maybe afford to move to something bigger as an investment etc but actually, thinking ahead, it may be wiser to pay off this house earlier as the kids may be going to university before our mortgage - as is - is paid off. You may want to consider that too?

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