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is this reasonable?

(10 Posts)
Loiterer Thu 31-Mar-16 08:12:49

Hoping for some advice as I'm in a bit of a panic.

We are trying hard to move closer to London due to work and now having a lovely DD.

We've sold our house, and found a house we love in a great location. Would want to stay in it for ten years or more. We've made around 100 k on the sale of our house and are looking at a mortgage of 280 k to cover the rest. We earn a combined income of just under 75 k. Apparently, according to our independent mortgage adviser, this is affordable and doable but I just can't shake the feeling that it's such a huge amount to borrow, what if interest rates rise when we come to remortgage when fixed rates end etc.

I'm caught between - if we don't take a risk we won't get anywhere and can't carry on living here, and all the what iff's. That mortgage is over 30 years but we'd over pay as much as possible.

Any thoughts would be gladly received. smile

Trills Thu 31-Mar-16 08:15:11

I think it's highly unlikely that London property prices will "crash".

They might stagnate, but not drop.

sparechange Thu 31-Mar-16 08:20:01

Rather than look at the overall amount you are borrowing, look at the monthly payments as a % of your take-home pay, and what those payments would be if interest rates go up when you need to remortgage
You can mitigate that a bit by getting a 5 year fixed mortgage

What are your outgoings, and can you cover them all after the mortgage is paid? That's a much more relevant number than the overall size of the mortgage

Loiterer Thu 31-Mar-16 08:23:46

So the monthly repayments are about what we are paying now, as we've just come out of a not brilliant fixed term mortgage as we were first time buyers. It is about 1/4 of our monthly take home pay. Is that ok? It's not London but not far..

Trills Thu 31-Mar-16 08:27:49

1/4 of your takehome is low, IMO. Although what really matters is not what fraction it is but how much you have left over.

Loiterer Thu 31-Mar-16 08:29:25

Do you mean what will then be disposable Trills? I think about £600 after food. That's not loads is it.. confused

Muskateersmummy Thu 31-Mar-16 08:36:18

We have just taken a similar mortgage. It's a large undertaking but if your planning on it being your forever (or at least for a very long term) home I think it's best to go with what you love. We now have a similar disposable to you each month as I have taken a change in role and it's doable. It depends on quality of life and what's most important to you.

namechangedtoday15 Thu 31-Mar-16 09:18:04

Have you factored in childcare? Are you planning any more children? Have you thought about whether you'll still have the same income when your DD is at school (i.e. will you reduce your hours to drop / collect or is wraparound care available?).

I think the single biggest expense for most families - in our case (twins and then a 3rd - is childcare (it was double our mortgage for a while). Just think how your income will be affected by childcare costs, not just now but taking into account any plans you have for the next few years.

But with your income, and the amount you'd need to borrow, it sounds do-able. Good luck smile

Loiterer Thu 31-Mar-16 19:28:10

Thanks everyone. Yes have factored in childcare, that's a bigger expense than the mortgage.

On further reflection now I think I'm going to have to feel the fear and go with this, and just hope for the best!

seven201 Thu 31-Mar-16 22:21:44

We've got a similar mortgage and earn about 10k less than you, but we have 50% equity. We went for a 5 year fix for 33 years (we'll be 68 when we pay it off!). Like you it was actually a similar amount to our last mortgage monthly payments as we were previously fist time buyers with little equity. We figured that hopefully we can afford it if rates go up later but if not then we will sell. It's a scary step but so far we've not regretted it.

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