Do you think this a reckless mortgage repayment?

[Redcarhal]

I earn 2,800 a month, this will go up to 3,200 when I pay off my student loan in December.

Finally found a place in the area I want and repayments are going to be 1,100 a month.

My friends and family are here and I have wanted to move back for a long time. I’m 34 now.

I am conflicted as the area is so expensive and this house is the lower end of the market (490). Most are on for 550 and over.

I have secured the interest rate for the 1,100 and obviously they are only going up… I think this time next year I may not even get a mortgage for this much due to the rates.

Would this repayment horrify you? Would you do it on this salary? Also, how would you feel if on 2,500? This may happen if I drop a day at work.

I would feel ok with that if you could lock in the affordable interest rate, and your job was very secure

Is it possible for you to get a mortgage for that amount? I think I’d feel a bit nervous, depending on how secure your job is and how much you have in savings.

We pay £1000 a month for a big house so seems a normal amount to me. Even if interest rates rise, the actual repayment amount is not too bad, have you worked out what your payments would be at various interest rates? Don't forget after a few years you have paid off some capital and house prices willl probably either stay same or go up. And you can usually re rate with your existing provider with no credit check done

I don’t think that’s a silly amount. You must be on around 50k with potential to earn more?

Have you looked at other bills and worked out a budget? Go to the money saving website and they'll help you figure out average cost for heating etc, if you're happy with how much you'll have left, with wiggle room, then you're fine.

It sounds very tight but if it's your only real chance, I guess you have to go for it.

Can you get in a lodger? It won't be taken into account as income for the mortgage application, but it will help your cash flow a lot.

I even had a lodger in my living room for the first 2 years in my house, I lived in my bedroom. You just do what you have to do. How long would those interest rates be fixed for?

Thanks sorry should have said the rate is secured at the 1,100 a month repayment and the maximum term.

im just worried as current mortgage is 650!

It’s fixed for 5 years

We pay 1188 but our income is more than double yours. That said, we have 3 dc and they are expensive with clubs, holidays etc. just remember that the bigger the home the higher the maintenance costs.

Yup, this repayment would horrify me…but that it because I only earn £1200!

I think I need more info, like if you’re about to have children, drop work days, pay nursery fees etc. I absolutely wouldn’t. If there was no way this would happen or you’re past that and income was secure, maybe.

I would be okay with that income to mortgage ratio.

Numbers are a bit different for me because I earn Australian dollars but I earn 4200 a month and my mortgage is 1400 a month (will be going up soon). That’s about the same percentage as yours.

I don’t live a glamorous life but still manage all my bills, eating out and a big holiday abroad most years. No car payment or any other debts though.

I wouldn't get a variable rate mortgage, especially after the mortgage backed securities scandal of 2008

Your student loan is 400 a month?!

Forgot to say with my numbers that I also have no children and will be remaining child free so those expenses aren’t an issue.

There’s no way I’d be dropping to four days a week with my expenses.

At what you're taking home now until Dec I'd be worried, but as it's definitely going to be £3200 from Dec I'd be fine

IF

• you're pretty sure you'd get a job paying the same fairly quickly if you lost this one
• you don't have high childcare bills, or any other high bills out of the ordinary.

its not loads more than you're paying now.

5 years is a good fix, just overpay as much as you can.

@Redcarhal I wouldn't be thinking about dropping a day unless it saves you a lot in childcare, but you can see how it goes first can't you.

I think you should make a spreadsheet of all of the bills and decide. The mortgage is obviously the biggest factor but I would count in council tax, gas and electricity, water rates, commuting costs, car expenses (if applicable) then look at the buffer over for food and living expenses.

plus look at what you are comfortable with mortgage wise on a higher interest rate after the 5 year fix. Interest rates have been historically low and you should factor that in after the fix ends. To what degree who knows but do different calculations to assess how much it moves potentially.

@Audioslaw my dh snd I both pay about that a month. When people talk about student loans they say it won’t impact mortgages etc, which makes me so angry. Between us we are basically paying another mortgage and someone
10 years older didn’t have to pay that.

NW. It's awful isn't it and it's presented as no impact?