Is Our Mortgage Sustainable? Advice Needed

[Gabaru]

We are first-time buyers, and our mortgage for £575,000 has been approved. We are putting down a £11,000 deposit. My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month.
Given the current cost of living, I wanted to ask if this setup seems sustainable.Any advice or insights from those in a similar situation would be greatly appreciated.

You might have to jump on the purchase.
Skimp and save for a year while your wife considers ..
a junior position.
tutoring.
teaching her specialty - retrain in education.
retrain in slightly different field
other jobs she hasn't thought of like school crossing supervisor.

That's right in a falling or stable market. When the market is close to the bottom, however, risks are worthwhile.

When I bought my first flat in late 1981/2, my mortgage was about £285 pcm on £23k. My net salary was £447. Ouch but luckily I had a flat mate for the first couple of years. I paid £31,750 for the flat and sold it for £95k five years later.

The current market is not the time to take risks. It needs another five years. Totally the wrong point in the cycle. Previous sweet spots were 1992 to about 1996 and 2009 to about 2014.

The wife sounds incredibly lazy

I appreciate there was a large increase during COVID in London, but if you look at the nationwide house price index calculator there's been significant stagflation with housing in London. (Nationally, the picture is different.)

There's been an 11% increase in housing prices in greater London from 2016 to Q4 2024 Vs ~19% average wage growth. Therefore relative to salary, houses are cheaper in London compared to when I bought. I say this as our situations are more similar than you would expect at first glance.

So instead of £575000 mortgage from first post, it's actually £465000. £575000 is the house price.

I'll re-run the numbers:
£465000 at 4.5% for 30 years is: £847810 total repayment, much less bad than when I used figures from your original post.

To see how reasonable the mortgage is, I'm going to approach it as a thought exercise and see if I could afford it if I had your salary and using figures from my actual spending over the last year. I am a relatively low-spending person who has no debt other than mortgage, buys second hand clothes and drives a battered 13 year old car.

My salary is almost identical to yours but my husband brings in an extra £3800 take-home to our household.

If we didn't have any childcare costs or mortgage costs we would be able to save £58000 per year. If we didn't have my husband's salary coming in (i.e. our total household income was similar to your household's) and we had your mortgage we would have negative balance by minus £15680 per year.

We couldn't afford it even if we cut all discretionary spending - for us kids' clubs, our summer holiday and our meal out every 1-2 months. We'd still need an extra ~£10000 to be able to pay our household costs. I'm really sorry.

When did she do her degree, @Gabaru ?

Your update saying this house needs modernisation makes me even more convinced it's a bad idea. How will you fund all that?

What area do you need to buy in? I appreciate you want to reduce your son’s commute but he will only be at school for another 5 years. He’s managed 3 years of the commute already while younger. Are you sure there aren’t other cheaper areas? Do you need to stay in London? If the school is a grammar is it in Bromley, Sutton, Enfield, Kent, could you live the other side of the school, further away from London and you commute in?

What are your essential outgoings?
Utilities
Council tax
Car payments (tax, MOT, insurance, fuel)
Any public transport costs
Average monthly food bill
Internet/tv
Mobile phones (3 of them I presume?)
Basic clothes

And "nice to haves"
Extracurricular
Hobbies
Holidays

Only you know how this compares to your salary

There are cheaper houses in london, these are all 450k and below in grammar school boroughs.

https://www.rightmove.co.uk/properties/157587299#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/157572905#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/154967561#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/153834935#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/153634493#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/155523161#/?channel=RES_BUY

What is your son’s commute time at the moment ?
For me this wouldn’t be a valid enough reason to saddle the level of debt !
Personally. I couldn’t live with the uncertainty / anxiety of what could go wrong and living on such a tight budget etc !
Kids are remarkably resilient and responsibility / independence are great life skills (parent of 2 teens )

Surely you and she understand that this is very realistic if she has a 15/20 year old degree but has never actually worked at all? Of course she has not had any interest compared to people with 10/20 years of experience and an unbroken work record. She needs to get a job in a supermarket of McDonalds or something while taking courses to get herself up to date. It was a mistake to stay out of the job market for so long.

So the only reason for your move is your son's commute and he's aready 13? It seems mad to me to take on a mortgage like this just for that. Plus the house needs modernisation. Those 5 years will go by very fast and you'll spend a large proportion of them living in a building site worrying about money.

I'd think you were much better off keeping that money and using it for something else. See if you can use some of it to alleviate his commute if that's a major worry (splurge on taxis sometimes?). But although not ideal, lots of kids have long commutes, especially those going to grammar schools.

And even without money worries renovations are stressful!

I think everyone realises that it is no longer possible to buy a house for 3 times salary in London, nor the SE/SW and most other parts of the country. That hasn't been possible for decades which is why most households have two salaries, certainly once children start school. I don't understand why your son's grammar school would have delayed things. Do you mean you needed to move areas because of the school?
The figures make more sense now that you have set them out properly but they are still clearly unaffordable, as everyone has said. The comment about the house requiring complete modernisation makes it even less affordable!
Have you even considered what happens if you are made redundant, can't work due to illness or if interest rates rise to 6/7/8 or even 10%? What will you do in these circumstances when you clearly can't afford the repayments now?

Try living on those numbers for a few months and see how you get on.

This whole thing becomes dafter and dafter with every one of OP's posts.

We know it's insanely expensive to buy property in London, but this is hardly a new thing. You could've predicted this being an issue 10+ years ago.

And now the house needs renovations? With what money, exactly?

It's not do-able, OP, no matter how many times you run the numbers. Your wife needs to get any job, even NMW will provide a buffer. And even then, it will still be tight if you genuinely need to do significant work to the house (if you think house prices are crazy, wait until you see what they charge for building works these days!)

I have to say I'm baffled as to how two presumably intelligent people can be so financially clueless, but there we go I guess.

How many year will you be paying the mortgage? Could extend the term and make the monthly payments less, at least until your wife has a job? We are about to pay 40% of our net pay and not feeling good about it but have one similar age child and one much younger child so location is key for at least 14 years for us. Our net pay is roughly a third more than yours- around £5900 so also have more to start with.

The Grammar school areas around London are Sutton, Bexley, Bromley (Orpington), Dartford, Kingston upon Thames, Barnet. These are all outer London areas where you can definitely find properties for under or around £450K. You don't say what area you are looking in but, for example, you can live in the borough of Bexley and still access the Bromley and Dartford grammars easily as well as the Bexley grammars.

I think you will really struggle financially given your figures. Pull out and go for somewhere cheaper which will take some of the pressure off.

Ps, just because the mortgage has been agreed, it doesn't mean it's financially sensible to take out the max amount.

we are looking to buy in Sutton area

So you could look towards the Croydon end of the Borough for cheaper properties. Sutton grammar school pupils come from quite a wide area and the transport is good. A 13 year old doesn't need to live on top of the school and in 5 years time they'll be off to university (which you'll also need quite a bit of money for). You can get a perfectly good house not far away for a lot less than you're proposing to pay.

You need to figure out how likely it is you will lose your job and what your options are if that happens. If you’re a unionised public sector worker (so can’t be fired) then you can make the numbers work, if you work in the private sector and your company is going through a rough time you’re nuts.

Also very quickly try to build up some rainy day savings. Ideally you’d need six months bare minimum expenditure to cover emergencies.

The banks are having a laugh. Maybe u could rent a room out to supplement the cost or set your sites on a smaller place?

So hard in London most people have such a huge level of income going on rent or mortgage.
try and get a redundancy critical health policy for a few years. We never needed ours and cancelled 8 years in when we were more on top of things.
your wife could try insurance claims big demand for people who can understand engineering and write reports and it’s all mainly wfh. This could be a different option to being an engineer.
any cleaning or ironing work a little income makes huge difference to you.
lack of work experience maybe volunteer in charity shop or primary school so has references.
good luck just keep looking after your health

The fact that you are asking says no you shouldn't be doing this, Why don't you know? Get a payment schedule done, they are available online ,so you can see what your balance will be at the end of the 5 years. How much is council tax, that won't be cheap will it?

good ideas for wife to retrain. Childminder or TA or sage accounts course. Can any friend or relative give her unpaid work at their company so she has something to offer? Go to job centre and ask for help.

Can you buy a 2 bed flat or smaller house ? Better to have smaller and pay mortgage than rent. Please carefully consider your options you could lose your deposit