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.

No. It's not worth it. You will bankrupt yourself and destroy your family's future if you fixate on a house at this price-point. Your wife needs an income of around £25000 for this house to be viable with barely any spare money leftover. She needs a secure job earning £35000-£40000 to make this house achievable. Failing that, you need to up your salary by £25000- £30000 to make it (barely) achievable with no leftover money.

Set yourself the task of going through ALL you and your wife's accounts/credit card spending for the past calendar year.

Work out all expenditure/income according to the following categories. Do not lump credit card spending into the bills category. Break down what you spend on your credit card by category and only put the interest in the bills section.

This is what I would use if I were you as it will give you a good idea of where you're spending money and is very detailed. For any costs that you might not be used to paying due to renting, I will put in what I pay so you get a general idea of the extra hidden costs of owning a house. It is a LOT more than you will imagine.

• Income.
• Salary (take home)
• Bonus (take home)
• Child benefit (after any high income charges are applied)
• Investment returns
• Interest
• Other income

• Kids
• Childcare
• School trips
• Kids clothes
• Kids clubs
• Kids miscellaneous

• Bills
• Rent
• Life and critical illness insurance
• Professional fees
• Phone
• Internet £30/month
• Gas/electricity £166/month
• Window cleaning £14 every 6 weeks
• Water £42/month
• Home/contents insurance £30/month
• TV licence £14.12 /month
• Investment fees
• Other committed bills
• Credit card INTEREST
• Pension contributions (if deducted after your salary is paid)

• Subscriptions
• TV subscriptions
• Gym membership/other hobbies
• Charity
• Apps/other
• Food.subscriptions

• Transport category
• Fuel
• Car repair
• Bus/train tickets
• Parking/tolls/park and ride
• Mot/service
• Insurance
• Breakdown cover
• Driving licence
• Car wash /tyre refills
• Other

• Savings and Investments
• Mortgage overpayment
• Lisa
• ISA
• Pensions
• Savings accounts
• Children's ISAs/pensions/savings

• Expenses
• Wife personal
• Husband personal
• Adult time/babysitting
• Days out
• Takeaways
• Home improvements (meaning repairs and improvements) £250/month
• Home items
• Presents/parties
• Xmas/other festivals
• Emergency £83/month
• Eating out
• Food
• Health
• Work lunches
• Miscellaneous
• Unknown

• Holidays
• Passports/ghic fees
• Insurance
• Transport/car rental
• accommodation
• tolls/parking charges
• Eating out
• attractions
• Holiday items

Come back to us when you've got an idea of your actual expenditure in full. You won't be able to work out what you can afford until you have a 1 year breakdown.

Look at a 2 bed flat!

50% for needs: Living expenses, such as your rent/mortgage, bills, food and transport. 30% for wants: Shopping, trips, subscriptions or eating out. 20% for savings or debt:

we bring home about 11k and our mortgage is 2300 per month

What is it about the two houses listed that don't need your needs. Your needs are to house your family in Sutton. From those houses your son will have his own room, have less a commute to school all within a decent budget. You are clearly being too fussy and would rather put yourself into debt/hardship rather than perhaps taking a "lesser" house. Ridiculous thinking. You'll be able to save more money to support your family and potentially son who wants to go to university.

A 450k house would totally meet your needs. You can’t afford preferences. You need to realise your wife may not ever get a job, not even shop work or cafe work. A house which has appreciated in value is of no use to you until you sell, it’s just numbers on a piece of paper until then. You are really running the risk of repossession. Can you get a better paid job/promotion if your wife can’t get a job? I feel for you as I envisage years of scrimping, I mean really scrimping. Or worse seeing as you’re “weak with money”. Hope the house doesn’t get repossessed and you lose everything.

It's imperative to take out a critical illness/income protection policy should you find yourself unable to work for whatever reason.

Good luck to you OP - I hope you find something that meets your needs.

Your mortgage repayment is about 58% of your income, which is pretty high. Typically, it’s recommended that housing costs stay around 30-40% of your monthly income. Keep in mind other expenses like utilities, insurance, and maintenance, plus any savings for emergencies. If your mortgage rate is variable, rates could go up, making your payments higher. It’s a good idea to think about your overall budget and long-term goals to make sure this setup works for you. If it feels tight, consider options like reducing the mortgage amount or finding ways to cut other costs.

To be perfectly honest @Gabaru Sutton is relatively expensive co.pared to the rest of the country but if your son is at Sutton Grammar, it would be sensible to look towards Carshalton and at two bed flats bearing in mind your income.

I'm trying to fathom how you are on nearly £80k bearing in mind your naivety. If yiur son is at Sutton Grammar, how are you proposing to fund his uni costs because you won't be getting much grant on that salary? Also, if your wife needs to earn some money, I live not far from Sutton - no more than 20 minutes on the S2. Cleaners round here are £17.50 - it's always possible to earn money. The Whitgift Foundation, a hop.skip and a jump from Sutton is usually looking for carers for its old people's homes.

I suspect bs here.

That's a massive mortgage , how will you afford any sort of life ? What if the mortgage rates go up ? Surely you don't need to spend that much to buy a house ?

We started with a two bed .. did work on it ,
Then 3 , same
Then 4 , same
Then forever home at 48... mortgage free ...
do your generation just skip the hard work doing up houses and gaining equity these days?

Your wife is a SAHM but you don't have the household income to support that. That's the biggest financial mistake you have made jointly, leaving you struggling to buy in your area.

To make this work, she needs a job, and she needs to seriously reset her expectations - IT roles have a very tough market and she'll not be able to compete with a long career gap.

If she's had a professional role before, she could look at returner programs.

Alternatively, she should look at roles in less desired jobs, like caring. If she brought home even just £1k a month, your situation would be much better.

Just because your mortgage has been approved doesn’t mean you can afford it! Single income and person here and there’s no way I would take on that size of a mortgage with that income let alone having to support 2 other people.

I absolutely wouldn't do this! Our monthly income is around 10k, and our mortgage is about to go to 3.3k, and I'm not happy about it!

There's no big conspiracy going on as to why you can't afford the house you want. I can't either as our household income isn't high enough.
Your issue is perfectly simple. You are a one income household as your wife doesn't work and seems to want to walk into a well paid job even though she hasn't worked for years. So instead of taking any job, she just doesn't work.
You have an OK salary but not enough to buy the house you want. No one is going to magic a solution other than the ones that have been given. Time to face facts

That is a huge mortgage payment!! Id buy something cheaper?!

Your wife needs to take a job - in a supermarket, coffee shop, call centre. ( and I mean zero offence to anyone who does these, but they are often taken by students/ graduates as filler roles ime)
Whatever her existing provable skill-set will allow.
She won’t earn much but she will contribute, both to that family and her own future.
Once she is contributing, she can figure out how to upskill to use her degree.

Reality is most adults work to pay the mortgage. SAHM for a teenager is not the norm these days, if it ever was outside the 1950s

As parents of a 13 YO, surely you must have a good idea of your normal outgoings - food, travel etc? Although it sounds a stretch that you've been approved for a 5.5 x income multiple.

But to echo others, your DW needs to find any job. Even PT NMW could bring in £1k pm, which would make an enormous difference to your disposable income.

Can she retrain? Get help from a work coach on getting back into the workplace? Do an apprenticeship, start a business? Does she have any relevant experience? Presumably she's been a SAHM for the last 13 years, so if she can't get a job or have any other skills or experience could she work as a carer, set up a cleaning business or train to become a childminder?

You need to factor in the cost of the increased council tax and the rises in all other bills that are going up this year such as water. They are supposed to all be going up about 5-25%.
Unless the wife gets a job this level of mortgage is unsustainable, but you won't be told.
The wife needs to suck it up and get any job she can. There are always jobs out there if you really really want one.

Two things... Why not move to Buckinghamshire where there are Grammar Schools and although houses are expensive, your money does go further. I live in a three bed terrace and it's not worth over £500K!

Secondly. Yes, she has a degree but your wife needs to just find a job! If she worked as a Teaching Assistant you'd be able to afford the house you want! And it would be Term Time only. Or an Admin position in a school.

Another one coming on to say you can't afford that house. The mortgage is just too much versus your salary.

You mention a difference of £600 per month between the houses others have suggested which is a lot of money when you don't have that £600 each month.

Repairs, boiler breakdown, new washing machine etc etc. Let alone the ongoing increase in utility bills, council tax, mortgage etc. Just general inflation as well.

There is always compromise to be made with property purchases. More often than not it's a case of buying something suitable within the desired location (if lucky.) Often the location has to be shifted as it's unaffordable.

Then there is the fact your DW has not worked and is not even gaining any interviews. Well expectations need to be lowered here again to get a foot on the ladder of the job market.

I think it will be very uncomfortable for a while. However you have two things that might make it sustainable.
1 if your salary is likely to increase over the next couple of years then the burden would be eased.
2 you have a wife that doesn’t have a job at present so if you find you are struggling then she can take a job to help make ends meet.
Whatever you do though do not start a family in the next two years. A baby would sink you.

I think you will be okay, as you're fixing for five years. This means you will be surviving and not be able to afford luxurious lifestyle. Can i ask the mortgage term? Keep saving the bonuses for emergencies. Positives are your son will be 18 in five years and will be able to do part time job. Your wife must start looking for jobs or apprenticeship in IT industry, this way she will have references and experience if she has never worked before.
At the end of the day what's more important to you, having this house or disposable income to spend on holidays etc.
Also in five years your income would be increased, I suppose you're in IT industry. Make sure you have the insurance like critical illness and life cover to protect your mortgage.
Worst case scenario, your wife would be able to do minimum wages jobs. If there is a Will , there is a way.
we have taken maximum amount of mortgage in the past, we borrowed 375k with 70k joint income, fixed for five years.It was scary but we made mortgage our utmost priority.we survived and now after five years our joint income is 98k and we are able to save and also will be able to absorb higher interest rates. we have three children. we have also managed to afford holidays and our children are enrolled in extra curricular activities etc. Our mortgage will be paid off when I will be 60.

OP, mortgage broker here, I can’t seem to open your budget planner, but the mistake most of my clients make when filling in budget planners is missing out all the little things that add up, TV licence, haircuts etc, and maybe would suggest filling in a robust online one being completely honest with yourself. It’s also important to be accurate, it might seem obvious but I can’t tell you how many people I sit down with who have just guessed/estimated a lot of the costs!

https://www.moneyhelper.org.uk/en/everyday-money/budgeting/budget-planner

👆🏻this is a good one, if a little time consuming!

Your points around location etc are all valid, you obviously aren’t just leaping in to an expensive house for frivolous reasons, however, on the surface this does look like a potentially risky situation as apart from your backup fund (which will quickly disappear even with just basic stuff like paint) you have no safety net. Have you and your wife talked through what you’d do in these situations? Long term ill health, redundancy etc, would your wife be willing to take up a potentially unenjoyable basic job just to make ends meet?

I think it is normal not to be able to afford your perfect house and have to compromise in some way. (Watch 'location location location ' on TV!!) Some good advice from people who know the area and have suggested alternatives.

A mortgage is only the start of a long line of bills when you are a homeowner (insurance, heating, council tax, water, broadband...) and on top of those is transport costs, food, cost towards your ds including savings for uni, emergencies, holidays and never ending house repairs.

There is nothing wrong with your wife not working and you have a good wage BUT it is not enough to buy an expensive house which needs some TLC.

You are going to have to make a compromise like most people do. Options include a cheaper house in your desirable area, moving to an area further away, your wife getting a job or you getting a second job.

Your son only has a few years left at this school and has been commuting so far. Is it worth having a huge mortgage and risking your families security just to move near school? Uni is not too far away and would it not be better to have the capacity to help at this stage when the costs really ramp up?

I wish your family the best in whatever choice you make, and your son is lucky to have a family who care so much for him.

@FlannelandPuce Thanks. I have updated the budget planner file here https://docs.google.com/spreadsheets/d/1TyvrVIa9FCmg_GkOoiJGPm7IY1N8l8Zd/edit?usp=drivesdk&ouid=100685407561018836275&rtpof=true&sd=true
Can you please have a look at it and let me know if I have missed anything. Any insight on the missing expenses will help. Thanks

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?

600 a month is a lot....
It is not 600 a month more because it needs "complete modernization " and you only have 20k allocated for that "complete modernization ". That is unrealistic. Have you done up a house before? Are you good at diy? Will you do all plastering and painting yourself? Lay floors? Plumb the toilet? Have you costed just paint and new flooring for a whole house?