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Original poster

How much mortgage is too much?

80 replies

Manc2 · 16/12/2021 18:01

I’m hoping to hear sone opinions on how much is too much to borrow for a mortgage.
DH and I are both 30 and live in Manchester. We want to buy a new house but can’t agree how much is ok to borrow.

We don’t currently have any children but may want one in 5 years ish.
Our joint income is 100k a year and our only debts are Student loans that will be cleared in the next coup of years.
Mortgage calculators seem to think we could borrow 550k which sounds huge.
So can anyone help with how much is actually reasonable to borrow? Thank you

OP posts:
BarbaraofSeville · 16/12/2021 18:49

Cross posted on the deposit.

Original poster
Manc2 · 16/12/2021 18:50

@Hawkinsfirefly99 borrowing 200k would mean a house in not a great area here. Our deposit is about 100-140k

OP posts:
Original poster
Manc2 · 16/12/2021 18:51

@BernadetteRostankowskiWolowitz we have been looking in south Manchester. 500k would only get us a small 3 bed

OP posts:

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happytoday73 · 16/12/2021 18:51

New house or new to you? Would it be your forever house.. Big enough to stay in and good area for schools?
But yes your deposit is likely to be your issue
You also need to start cutting back on unnecessary spends for at least 3 months so it helps your affordability review

snowone · 16/12/2021 18:53

DH and I are on about £110k between us. Our mortgage payment is about £1100 a month. Currently not overpaying but planning to once nursery fees reduce in April. It's a comfortable amount for us to pay.

Hawkinsfirefly99 · 16/12/2021 18:54

Our house is worth 600k but we only needed to borrow £200k because we'd built up equity in our first house purchase so had a large deposit for our next house.

Could you buy a smaller property and perhaps do it up and then sell it on to build up some equity?

It's so difficult with house prices being so expensive! We're in the South East so I feel your pain.

Levithian · 16/12/2021 18:54

It's crazy isn't it? I'm a single mother who is self-employed in a competitive industry, never had a credit card (so credit score hasn't had the benefit of that), and the bank offered me an absolutely ridiculous amount of money with payments there was no way I could afford. In the end, I borrowed about 1/3rd of what they were offering, which was enough to buy a nice home but nothing posh/not the most posh area.

Original poster
Manc2 · 16/12/2021 18:54

@happytoday73
New to us house. Ideally it would be big enough to live in for 20 years
We currently save about 2k a month so don’t think we need to cut back too much

OP posts:
iloveayankeecandle · 16/12/2021 18:56

Wow. We earn just over 50k between us. Our mortgage is £900 a month. Just had another baby. So childcare fees on top of that. You earn double what we do. I think you'd be able to manage at least a grand a month repayment.

Original poster
Manc2 · 16/12/2021 18:58

@iloveayankeecandle from the other comments I was starting to think we were crazy for considering even 1000 a month

OP posts:
iloveayankeecandle · 16/12/2021 19:00

@Manc2 I really don't think you are. We take home roughly £3500 a month. Our bills total about £2200 but that's with savings. Then we've got nursery bills on too soon.

Fridafever · 16/12/2021 19:02

We earn about 125k and our repayments are about £2k, doesn’t feel a struggle at all. The mortgage is about £500k, house worth approximately double that. We don’t have any childcare costs or any sort of debt or car finance. I just buy a car outright when the old one gives up!

Asdf12345 · 16/12/2021 19:04

Consider how your incomes are likely to change.

When we bought our income was about the same. Two years on our combined income has almost doubled and I sometimes wish we had stretched further.

We were offered 5.5x joint salary however we also had a large deposit and relatively low outgoings, we took 2.4x as a house below our expected budget came up in the perfect location, and now our mortgage is about 1.2x joint salary.

Whilst I wouldn’t have wanted the repayments at 5.5x long term, the repayments at 2.4x were no problem. If doing it again and the right house appeared I would have borrowed more and possibly used a longer term to reduce the payments on the earlier years.

AutumnLeaves22 · 16/12/2021 19:04

If you're saving £2k per month then you need to decide how much of that you'd be willing to sacrifice to put towards a mortgage.

My mortgage is £400 (was £450k). £1500 per month, another 28 years to run! . Our income is higher than yours and we have plenty of money left over, but I like it like that. Means I can make regular overpayments whilst we are comfortable and if anything happens we can revert to our normal monthly payments.

offtothebeach · 16/12/2021 19:53

For us it was all about being able to pay it off as soon as possible (hubby had a goal of mortgage free before 40 ) Everyone else we know went for a bigger mortgage and house and are happy with their choices and their houses are much nicer than ours. We're risk averse and went with a smaller house and mortgage and are also happy with our choice.

nosyupnorth · 16/12/2021 20:05

Work out how much you can afford to pay each month, factoring for if something went wrong like one of you lost your job (not saying you have to work it out as if single income, but have you at least got the savings post-deposit to support a few months of payments while you make other arrangements), then times that by how many months would be prepared to pay for (remembering the mortage companies won't generally let you plan to pay past retirment age) - that's how much you should actually have as your upper limit. Then get a deal that will let you overpay and hopefully you can clear it faster because your real ability to pay is higher than your backstop ability to pay.

Getting mortaged to the absolute most the lenders will give you is just a recipe for finding yourself up shit creek if anything goes wrong.

Original poster
Manc2 · 16/12/2021 20:08

@nosyupnorth we will have 20-25k in easily accessible savings after moving

OP posts:
SamanthaVimes · 16/12/2021 20:53

Our mortgage payment is just over £1600, we earn about £100k between us. It doesn’t feel like too much of a struggle to pay. We were planning on overpaying this year but I’ve just found out I’m pregnant again so I expect we’ll hold off another year or two.

When we were thinking about how much was affordable we considered how long we could survive on one salary if one of us lost a job or if both of us lost jobs. We’ve got 9-12 months costs covered in savings if we cut back to the bare minimum if we both stopped earning so feel fairly comfortable we’d be able to find work / downsize in that time if necessary.

StruggleStreet · 16/12/2021 21:10

We’re currently considering same thing OP. Joint income similar to yours at £110k and looking at mortgage of £450k. It was a little while since we spoke to mortgage broker but from what I remember the monthly payments on that were going to be around £1500. We also have two children in nursery and that costs another £1500 per month. If we say another £1500 for other bills, food, fuel, etc, that doesn’t leave a huge amount but I think enough (take home pay is around £6k combined).

If you haven’t already I think it would be good to speak to a mortgage broker to understand what your monthly payments might be, work out what would be left after mortgage, bills and childcare and decide whether you would be happy to live off that.
I think it’s doable for you, but it depends on what lifestyle you want and what you want to spend on other things.

CharSiu · 16/12/2021 21:12

We used 19% of our income on mortgage, I had six months at full maternity pay and three months at half.

BorlandRd · 16/12/2021 21:17

Our take home pay is around £5000 per month between us and our mortgage is £1350 which feels very comfortable. Because we had a 55% deposit we could fix at 1.11% interest for 5 years. If you can get a decent fixed mortgage it might be worth maxing out your current affordability if you are expecting a pay rise in the next 5 or so years. So get the biggest place you can so you don’t need to move again in the next 10 or so years and have to pay stamp duty and all the other associated moving fees again.

ginnig · 16/12/2021 22:08

depends on many things but you will get very conservative answers on MNs.

As you want a dc I wouldn't fully stretch myself unless it's a given salaries will rise.

ginnig · 16/12/2021 22:09

we wouldn’t borrow the max but want to know if borrowing 450 is crazy

I wouldn't say so

mindutopia · 16/12/2021 23:23

How much can you afford each month? Dh and I on about £100k a year and we were offered a mortgage of £630k.

That is definitely more than we wanted to spend. We mortgaged £492k which comes to £1680 per month. We have two dc as well. I wouldn’t want to pay more than this really.

As you don’t have children yet, if you plan to have them in the future, I would think about childcare costs. We are out of the early years now but nursery cost us about £700-900 a month, so you would need to factor that cost in for a couple years if you plan to use paid childcare or leave work.

Bobsyer · 16/12/2021 23:39

borrowing 200k would mean a house in not a great area here. Our deposit is about 100-140k

This would mean you have a mortgage of around £60-100k. That's peanuts in mortgage terms. Your monthly payment would likely be less than £300 on that (for reference I was paying £260 on a mortgage of £76k. We have now moved and our mortgage payments are about 25% of take home monthly salary - 15% is extremely conservative).

Honestly, and I don't mean this meanly, you both need to talk to a mortgage advisor because you clearly have no idea. If you could borrow up to £550k then with your deposit you could look for properties up to £690k. And you would still likely be under an 80% loan to property value which means your rate would be very favourable.