1/4 of income on mortgage

[CatUnderTheStairs]

We're both in our 50s, no mortgage at moment. We're buying and will be paying out a 1/4 of our combined income on a mortgage for the next 10 years. (Both got 3 months savings and good pensions).

Does that sound about right?

Need more information. If you earn £800 pm between you and the mortgage leaves you with £600 for everything else, it's an entirely different proposition to your monthly income being £3000 per month and being left with £2250 pm for everything else.

If you've applied for a mortgage they would have done quite a detailed affordability assessment, based on quite restrictive criteria - higher interest rates, continuation of discretionary spending even when a sensible person would cut back to keep up paying the mortgage, so if you've been approved, the bank thinks you can afford it, so all is good.

Plus you will have already thought about whether you could afford the mortgage before you applied for it, wouldn't you?

Most lenders consider that your mortgage should cost you around a third of your overall income, though with house prices as high as they are, some will consider above that. Unless you have particularly high outgoings, 25% should be affordable for you. Are you asking because it doesn’t feel affordable? Subtract 25% from your monthly income - do you typically spend more than that each month? If you do then you may struggle.

It feels ok. And on paper its affordable as long as we both are in work. If one of is having to pay it all itll get trickier.

I think I'm having a panic as it all gets more real!

It’s doable but could you overpay so that you know that if absolutely needed you’d still be ok. I know on my mortgage and I presume it’s the same they let you take a mortgage payment holiday without penalty for as much as you have overpaid by.

I would not want to commit to 25% and am a similar age to you. Have you lived together before?

I would try and get another three months living expenses together.

I'd also aim to save any spare money rather than overpay the mortgage. If you've got a decent mortgage deal, you should be able to beat the interest rate anyway.

I have no idea whether the ability to use any previous overpayments in times of need is a universal thing, and to be honest, it's not something I would expect, so for maximum flexibility, hang onto spare money rather than putting all eggs in one basket.

Ia that based on today's interest rate? Or a fixed one for 10 years? How would you manage if the interest rate were to increase? Have you crunched those numbers?