What is your definition of a 'big mortgage'?

[magicalkitty]

I heard someone say £100k is a 'big mortgage' with house prices today that seems quite small to me as huh would need a big deposit to only borrow £100k, unless you are buying a very small property in a cheap area.

It got me wondering, what is a big mortgage? Mine started at £210k and I thought that was about average?

Personally I would say a big mortgage is anything over 400ish. I would certainly view 210 as average.

But it depends on LTV and house prices in the area.

When I was working 40 hours a week and bringing home just under £750 a month, my £736 a month mortgage was a big mortgage. But they still let me borrow it.

It probably depends on where you're based. What is considered a big mortgage is going to be different between central London and more traditionally cheaper areas.

5 times income or more. Ours is just under 5 times now, it’s hefty!

Depends surely on where you live and your circumstances. I'm in the process of taking on the firmer martial home, with a mortgage of around 100k. I'm single, soon to be divorced, 2 children and work part time. That's a big mortgage.

Anything over 30% of your household income would be high in my eyes.

Depends on a whole load of factors. 100k is a huge mortgage if you're 74, with no means of paying it off. 100k is a tiny mortgage if its two earners both earning 6 figure salaries, with no other debts. Personally, I saved 60% of the price of my house (hard work, investing and saving, no help), and took out a 5 year mortgage, at a low rate, that will be paid off when I'm 56. That's me though, I don't like risk.

Sorry to be clearer, where the repayments are over 30% of your income.

That’s the average!

big mortgage = very close to being financable manageable. whatever the amount is.

500K is a huge mortgage IMO. Even in the SE with high house prices people usually upsize from a smaller house or have family help.
Round here 300K is huge (ok-ish part of the NW). You can buy family terraces for 250K though and with a deposit the mortgage would be lower than that.

One larger than I could pay!

It’s not a £ it’s a salary multiplier. Anything over 4x salary is large. So £250k isn’t a big deal if you have a household income of £100k. If you have a household income of 50k it’s a lot.

Monthly payments of over about £1500, although I realise that's completely unscientific given it depends on the length of your term. Would consider owing £100k in your 30s a small mortgage and £200k unremarkable.

I'd say over 35% of post tax income possibly over 40% as thats the suggestdd maximum you should aim for to leave enough to run the house. Id also say one that was over 90% of the value of the house.

If you’re bringing in £5k a month in household income after tax, £1,500 isn’t a big deal. It’s all relative. Rental prices also come into it. When I bought my first home I moved into a three bed detached house with a monthly mortgage payment that was a lower than the monthly rent for a studio flat in the same area.

And it wasn’t an interest only mortgage.

I’d say £500k plus but also that £400k plus seems a lot.

When we were looking we could’ve borrowed up to £450k but that just seemed like such a risk so we settled on £360k mortgage at £1600 a month which is quite comfortable for us and I’m glad we did it.

Yes the house is smaller but we plan to extend to make it a 4 bed at some point.

I don’t know but probably if you take out a mortgage at the limit of what the bank will lend you then it’ll class as a ‘big’ mortgage to you.

I think it depends on proportion of income and LTV, and thus what makes it 'big' is a specific combination of the circumstances of the property and owner.

£500k outstanding on a property worth £1.5m against an income of £250k is very different to £500k outstanding as 90% LTV on an income of 95k.

I looked at our mortgage statement the other day and it still has eighteen years to run on it even though we over pay each month!!!! . It’s starting to feel like a big bloody mortgage even though it’s not a particularly large amount on the grand scheme of things. It just goes on and on and on.

Our mortgage is £490k which is big on paper.

We are in our early 30s.

80% LTV. Monthly repayments are less than 30% of our take home salaries and the total mortgage amount is less than 3.5x our combined annual salary, that’s before bonuses.

So whilst it’s a big mortgage it doesn’t feel too huge to us. It’s all relative.

Well clearly it's all relative. It's a lot if you earn £5k but pay out for 3 kids in FT childcare, or have expensive travel costs or whatever. The question is, surely, what's big to you? There's no correct or objective answer.

£500k is objectively a big mortgage outside any city in the UK, however inside a UK
city LTV may be 50/60/70%.

If servicing £500k is not an issue to the mortgagee, then it's all relative.

While my mortgage makes me gulp, monthly repayments are less than 30% of my monthly take-home pay, so it's not something I'll ever panic about. Unless there came a point where I didn't have a job anymore, and my savings had run out (I'm a single parent). That would really be the time for me to worry about it 😬😬😬

Ours feels big on paper - £340k - but the house is worth about £800k and repayments about 20% of net monthly income, so month-to-month it doesn’t feel that big! Also, everything’s relative surely!