How much mortgage is too much?

[Manc2]

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

Our mortgage is 550k but we are in London. Income is 150k . I'd say on your joint income £550k is too much

Mine has just recalculated to £66 per month after the rate change. About £2 per month in interest. It could be paid off but I want to keep the deal in case we move to somewhere pricier and need it.

I've been overpaying for a while. It started at £1350 a decade ago and if the interest rate had gone up I'd have been totally stuffed. That was a frightening proportion of my income back then.

OP please remember to stress test too
So:
If one person isn’t working
If interest rates go up
Etc.

Don’t assume circumstances are always as is or better. Then only you know the level of individual risk you are ok with.

You may need to go through a broker as well to get 4/5x your income. That doesn’t necessarily cost extra but you may not get preferential rates due to the level of borrowing.

Our take home is about £5.6k and our mortgage is £1200 but we easily overpay up to £2.5k.

Can you ‘save’ what the new mortgage repayments would be and see how you get on?

(I’m also south manchester and I know exactly the struggle - nothing is cheap!)

It really depends on how much of your monthly take home salary it equates to. From memory, when I earned just over that amount I set my budget for mortgage payments at £1,300 per month, for a mortgage of about £400k at the time. When my salary went up substantially, I increased the DD up to £2,000 to overpay, and that was still comfortable.

On £550k, you'll have repayments closer to £2,000 per month, unless you increase the term to say 30-35 years, which would be fine at age 30. If you are currently taking home about £5,500, £2,000 seems doable, however if you will soon have a DC in childcare at £1,000, perhaps 2 cars on finance total £1,000, plus all bills and food it starts looking a bit tight, as you won't be able to save much. Only you will know your incomings and outgoings to determine what feels right.

I'd work this out by first looking at the monthly payments I'd be comfortable with first, then working that up to the mortgage amount to see if that's enough to get you what you want in the area that you like.