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.

People try to avoid over stretching themselves, and ideally buildup a cushion.

£ 20 000 is nowhere near enough to be a cushion for what your suggesting.

I think what you are doing is tunnel thinking.

You have decided that you are going to get this house, and you probably can.

But you are setting yourself up to be re possessed. That’s the reality of it.

That’s why you need to step back

People don't stretch themselves anywhere near this level and spend > 50% of their take home salary on a mortgage! Most banks simply would not lend this amount for obvious reasons. The usual recommended max for mortgage is around 1/3rd of take home income. Most families also have two incomes and some will pay for income protection, especially if the job market is uncertain or unstable.

It would be a shame to lose the house - it is an investment as well. You have a fixed rate for five years so you don't have to worry about that and I'm sure your wife can find employment within that time, plus your son will be growing up and becoming more independent.

How many months gross salary is that? Do you have sick pay? Critical illness insurance? Have you factored home insurance, mortgage protection costs and critical illness costs into your budget? Car breaks down etc? 20k is wiped out or liability repayments have to be factored in.

Is your sector secure? Likely to get a job quickly and on the same or greater salary. Will you be able to say the same over time.

You are taking on a repayment of approx 50% your income with only 20k in savings.

I'm probably over cautious. Used to work in debt collection/arrears many moons ago but in 90% of cases, it was a case of overextension and pushing the limits with very few options in terms of cushions or back up plans.

The fact you are asking the question means you are concerned yourself.

I agree. It's bizarre and makes me wonder if the whole scenario is made up.

That depends entirely on where you live. It would get a two bed flat here. Poss a do-er upper 3 bed terrace if you were really really lucky.

5 years is when his son does his A levels, and if he’s at a grammar is probably aiming for university.

Have you any idea how much this costs these days? And at the OP s wage the son will only be eligible for a tiny loan

OP It’ll be possible but with a v tight budget, minimal heating, v cheap food and no alcohol. All own brand foods too will make it possible. Holidays are out the window though!

5.5 times your salary, 2 dependants and over 50% of your single take home pay is a lot. I'm really surprised you passed the affordability test

i wouldn’t be able to sleep at night

That is not a reason not to buy a home. You have no idea what their circumstances will be like in five years or what their son will be doing. One can catastrophise about anything and do nothing.

To be honest, I checked my bank account for the past 1 yr and it has been almost the same may be increased by increased by £2000 or so. So I assumed that my incoming and outgoing are almost equal. So the assumption was I may be saving 200 per month.
So I have added all my expenses in excel ( Link -budget planner ) and with mortgage payment and all my other expenses. Its showing I will be saving Around £150 per month.
My conclusion is maybe I might have spent some one off high payments that's the reason my balance never increased.

Agree I am very week in financial matters :(

Neither have you

That is not a reason not to buy a home. You have no idea what their circumstances will be like in five years or what their son will be doing. One can catastrophise about anything and do nothing.

i wouldn’t do it .
it’s too much unless you have 2 incomes coming in imo

It seems high to me. I think your wife needs to work also.
Edit: I see your wife has never worked and thinks she can go into an IT job despite no work experience and 13 years at least since she studied.... that's not going to happen. She needs to be more realistic.
I also see you say the house needs complete modernisation, what's your budget for that?
I think you need to seriously look at what you're buying and where and have a rethink.

You can buy this 3 bed in Sutton for 425 which would be more feasible
I found this property on the Rightmove Android app and wanted you to see it: https://www.rightmove.co.uk/properties/154507724

Or this one

I found this property on the Rightmove Android app and wanted you to see it: https://www.rightmove.co.uk/properties/153698945

Save money ey buy a 425 to 450 3 bed in Sutton do not over stretch since you are "weak with money"

Whilst I've rented at over half my salary, I don't think I'd want to have a mortgage that was. There are so many additional costs involved. Suddenly you're having to pay for things you always took for granted like repairs and building insurance or your oven catching fire (yup, that happened). And often water or other bills are included in the rent that you suddenly have to pay for too.

Unfortunately I know a couple who did this. Have remortgaged, and keep borrowing their way into a black hole.

All so as to live in a certain postcode in London.

We've got the same deposit as you OP, similar income, no kids.

We went for a 300k property outside of London. Needle in a haystack after looking for 3 years but only needs a bit of work.
Bank was willing to give us more and could have gone for a bigger house but decided against it.

You'll feel like a hamster that can't get off the wheel with your numbers. I'd rethink.

I live in Greater London and you'd get a nice 2/3 bed flat here for that. Not fancy but in reasonably move-in condition and not a risky buy. Sutton is further out than we are and I'm pretty sure you could get at least that there.

You honestly don't have the cash to buy your renovation project and complete even the basics, so why take the risk? Your son won't be at school forever and you'd be better off using some savings to help him at university. After that you could buy somewhere smaller.
I've not read all the posts so guessing that you are renting at the moment? Bear in mind that once you buy you're responsible for everything that goes wrong - new household appliances, new boiler, roof repairs, plumbing problems, damp etc. etc. Even if you've had a full survey structural problems will arise later. You need a solid buffer to cope with this expenditure, as well as the normal bills and insurance costs.

Even if I go for a house priced at £450K, my monthly mortgage would still be around £1,900, which is 45% of my income. For a £575K house, the payment is £2,400, a £600 difference.

As many have mentioned, mortgage payments ideally shouldn't exceed 28% of income, which would mean looking at a £300K house with a monthly payment of around £1,200 — but that’s simply unrealistic in the current market to get a decent house.

In the current market, a £450K house wouldn't meet our needs or preferences. Additionally, a £450K house may not appreciate as much as a £575K property in a better area.
After reading all the comments on this post, it feels disheartening — it seems nearly impossible to buy a decent house that we will truly like. 😞

My question is: if we're getting a house we genuinely like, and the difference is just £600 more, is it worth taking the risk & hardship?

“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.”

Redbridge also has single sex grammar schools. Check out Ilford County High School for Boys in Barkingside.
Property prices are still quite high, but depending on what kind of property you’re looking for, Hainault which is a short bus ride away is more affordable. There are excellent transport links in the area.

@Gabaru "In the current market, a £450K house wouldn't meet our needs or preferences. Additionally, a £450K house may not appreciate as much as a £575K property in a better area."
I think you should lose the mindset that buying a house as an appreciating asset is that realistic. The people who make most money are those who can afford to take on a renovation project: they buy well, know what they are doing and do it properly. For the average homebuyer the days of huge profits are long gone. It's far more important to think of the house you buy as your home, so it makes sense to buy what you need and buy within a realistic budget.
I understand that you have needs that must be satisfied by your new house, but think that "preferences" should take a back seat if you can't afford to buy your perfect house.
And yes, if you are absolutely positive that you have an additional £600 to spend that would be great, but from your finances it doesn't sound as though you do have that. Have you been managing to save that much every month?

Problem is unforseen circumstances turning the 600 to 1200, 2400 etc.
When things spiral, they spiral quickly hence why repossession is a thing.

Don't overstretch yourself.