Mortgage

[littlemousebigcheese]

How much would you have to bring home a month before you agreed to a mortgage of 3200?

We've found a house we like and that would be the mortgage cost, just trying to decide if it's affordable. Will share how much our income is after a few answers.

Bills are 700 ish, food and general spends on children is 1200 a month, we also save 1000 a month

Would we be mad

@Navymamma you're doing very well to afford the school fees too, we don't have the wiggle room for that on the same income but we do have quite high commuting costs.

I also wouldn't do it on a single salary, we earn the same so if one of us lost our job we could still pay the mortgage ( but not all the bills!)

Ours is a mortgage of about £750k …

you won’t get a 750k mortgage today for 3.2k!

My husband is the sole earner but isn't too worried really, as he's happy the numbers stack up.

We have no childcare costs as I'm currently home with youngest and he's at school from September. If I got a job it would have to be school hours as my eldest can't attend after school clubs.

That’s borrowing c. £150k at 5%.

Which might stretch to a garage locally, but less than half the cost of a studio.

A mortgage of ~ 8% of your net income is very very low.

Do you have savings & insurance to cover of DH lost his job?

@littlemousebigcheese I’d be more concerned about it on a single salary as the consequences are larger if your DH loses his job.

What’s your savings position like? Sufificent to fund the mortgage for a year if he was out of work?

£3-4k mortgage is pretty normal among my peers (it’s probably £600-800k of mortgage) - but I’d say typically both will have ‘big’ (ie £100k+) jobs to afford it.

We bring home 5k a month and mortgage is about £1500. No childcare costs. Try to save £1k a month. We don’t live extravagantly, no major hobbies, big holidays, cars on finance etc. main outgoings are house renovations so in a save / spend continuous cycle with that. I would want double our salary coming in if we doubled our mortgage, and I would want a big savings pot in case partner lost his job (SAHM). Also depends on the condition of the house, if it’s fine and doesn’t need lots of work I would be more comfortable than trying to save for renovations / do repairs and pay down that big mortgage

That's roughly ours and we have about 9.5 coming in

We got ours last month at a rate of 4.5%. I suppose it depends on your deposit?

I won’t lie, it’s tight and we have a limited amount of disposable income. No eating out, expensive clothes or beauty products, holidays etc and we keep an eye on all outgoings.

It's a new build so no issues to worry about I think
We have a good savings pot behind us but will prob need to put 50k in to get mortgage down a bit. House is on at 800

Monthly payments sound fine. What sort of savings do you have if your husband loses his job? You would need enough to pay for everything until he finds another job, or tide you over until you can sell.

Well that's fine. We always put a third of our income into our mortgage.

I take home 10k per month myself + DH salary on top. We wouldn’t dream of having a 3k mortgage payment between us.

In many cases I think people have got conditioned to spending a far higher percentage of their income on a house than is really necessary.

Spend your money on fun stuff and experiences, retire early.

We take home £7500 and I am stressing out that our mortgage is rising to £1700. I would be very unhappy going higher. So for me, I would have to be on at least £9k but more like £10k.

I think for us the mortgage spend is looked at as part of the bigger picture of what we want our life to look like in 10, 20 years. We are currently prioritising pension contributions as they are tax free via salary sacrifice and we should get big returns and be able to retire early. We have to sacrifice some income and luxuries now but we’re doing it for peace of mind. If we didn’t do this we could have a lot more spare per month and technically have the 500k mortgage but then pensions would be a big worry for us (I think your £3200 repayments is a mortgage of about £600k for 30 years). We also want to give our children deposits and pay what we need to for uni fees, and still have the option for me to be a SAHM / part time earner

£10k

I think with your figures and the fact you stay at home to look after children, it would be doable. If you're able to roughly follow the 1/3rd mortgage, 1/3rd council tax and bills etc, 1/3rd non-essentials rule, it is probably a manageable expense.

I'm feeling very meh about it to be honest. We've worked out that our mortgage, bills, food, essentials etc would come to 6k if we took this house but at the moment with a mortgage half that we have such a great life, holidays, no worries if I go mad in the next sale, eat out a few times a week etc and I'm worried our life would change drastically. I just don't know if we love the house enough to justify the cost or if we're just desperate because there's nothing else out there.

I'm very aware of how terrible I sound given current cost of living crisis by the way.

Maybe another option would be to try to put money aside to pay down your current mortgage, (weighing up saving interest rates vs your mortgage interest rate and paying off at the right time). Paying off your mortgage would give you something to aim for and then you can make a choice about whether you want to make the next step up the ladder or if you are happy where you are.

I would also have a look at your pensions, your partner will be in the 100-125k 60% equiv tax trap and paying a lot above 125k so that could be something you do instead, up his pension contributions via salary sacrifice and watch the pot grow (and take out 25% tax free at 57)

It’s a difficult decision. We had a small mortgage of £1,200 for almost 7 years and lived exactly how you are now - lots of meals out, shopping whenever, holidaying without too much thought. We decided to take on the much larger mortgage because we don’t have a lot to show for our previous excesses. We’re by no means unhappier because we don’t eat as much as we used to. Instead, we have found deep satisfaction in spending money towards our biggest asset and building wealth. When we retire we will sell the house and downsize, releasing equity for our retirement and to help our daughter get on the property ladder and with university fees.