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.

And why is your wife looking for a job if she is not able a get a job? Isn’t that a waste of time?

I assume that OP means she is looking but hasn't yet been successful. Depends on what she's going for, I guess. But even a NMW job would provide a useful buffer.

OP, why do you want to buy a house you clearly can't presently afford?

If you’re only able to save a max of £200 per month and your rent is £1500 then you can’t afford a mortgage of more than £1700 per month.

And that’s assuming the bills will be the same on your new property, which is unlikely (plus you’ll have to factor things in like buildings insurance, fixing things when they break etc)

No. It’s not sustainable. Wife needs to get a job before you buy a property. Or you buy a far far cheaper one.

No it’s not sustainable . Wait until your wife is employed and revisit it then or look for a much cheaper house . What sort of job is your wife trying to get high paid / low paid ?

Would your mortgage be sustainable if interest rates shot to 15%?

Can we be sure that Rachel from Accounts knows what she's doing? Look at the mess Liz Truss made of everything - my mortgage rate shot up.

If you gave the bank accurate and truthful information and they've seen your income and outgoings then it probaby is sustainable... I'm guessing you're in London?

It really depends on what the rest of your lifestyle is like.

I probably 'need' no more than 800 pounds after essential bills and I have a very, very comfortable life that some would say is luxurious (nice hobbies, eating out whenever I fancy, memberships, upmarket clothes, nice car). However I'm a single woman, no kids, no obligations, live in a cheap rural area and don't have to worry about emergencies or paying for anyone else.

You need to look at what you guys spend money on and also have an emergency fund set aside. You may well be ok on 2k a month depending on your lifestyle.

Perhaps your wife could do with a job though, even if it is to have a more comfortable lifestyle, overpay the mortgage, be able to support your child once they are 18 etc.

Imagine her having a basic 2K pcm role and being able to put all that money away... Takes the pressure off you, too. And can be seasonal or temporary.

EDIT: Just seen your income and outgoings.... well if that's the case it doesn't sound sustainable! 🤔Are you able to re-budget? That's a large deficit there!

After the last two years of living through a redundancy, decimation of job market and constant price increases everywhere - food, energy, clothes, and with a mortgage less than you I would really encourage caution. It’s a stressful decision to be taking and you only have one of you working. What if you loose your job or can’t work?

I think you'd be incredibly foolish to do this.

Can we be sure that Rachel from Accounts knows what she's doing?

Off topic, but I do wish posters would stop with this misogynistic nickname. It says far more about you than it does about the Chancellor.

I'm surprised you've been offered this amount TBH....I take home more than you and with higher deposit and wasn't offered anywhere near this level ...

We are nearing the end of a back to brick full renovation paid for entirely from salary rather than financed. New central heating, wiring, window renovations, bathrooms, floors, walls, windows, lights. Currently at window dressing stage/ decorating stage and have 20 2x1m windows plus multiple doors, bifolds etc. So it’s been quite the spend the last 3 years and we just want it finished.

A large house with energy bills of £800 a month, so shows the scale of the house.

£1000s in childcare fees even with tax free childcare.

Wanting to enjoy life before shackled down with school terms and times so spending on trips and holidays too.

Im not worried we are missing a few years. Pre school ages are the trenches for childcare costs. We have 30+ working years left and already have investment portfolio. It’s just not our priority atm and we are both ok with that.

Not read the fill thread but how long have you taken this over? Can you increase the length of the mortgage? This would reduce the monthly repayments

God no way. We have a joint income of almost 6k and don't want to pay any more than 2k for mortgage but closer to 1.5k.
We are buying in the next couple of months.
We currently save 2k a month plus 1k on rent so half our income currently and it's tough and I'm very frugal/tight.
Although we do have 3 children so maybe that's swaying my answer.
But what about emergencies or holidays?
Christmas and birthdays.
Just no from.my opinion and I think the fact you are asking here means you know the answer to this.

I mean, it's doable.....for now....but would be a miserable existence. Council tax is going up and that would be a sizeable expense for you.

We earn around £7k a month with an almost £2k mortgage and aren't exactly living it flush once car costs, food costs and council tax are added in.

We have a very similar income and our morgage is £475pm.
I couldn't imagine paying out so much of our money every single month. I think it will make a pretty miserable and anxious life.
I would reconsider if I were you x

So back in sensible times in the 90s before house prices went bonkers the mortgage companies were very strict about not lending something like 3.2x your salary. 5.5 is close to double this. I appreciate house prices have gone up in relation to wages since then but that doesn’t change the fact that there was a reason for this rule. And I’d say with cost of living and rising food and energy prices sticking to such limits would be wise. We last moved in 2003 and we could have borrowed much more than we did. But we stuck to 3x our joint salary. I wouldn’t have wanted to borrow more. It’s ok having a nice house but penny pinching, worrying about bills, etc is no life.

You have a 13yo…..are they likely to go to uni? Because with your wage he’d probably get minimum student loan. Dd is off to uni in Sept and I’m expecting to have to give her about 6k a year to top up her student finance. I wouldn’t be able to afford that if my mortgage payments were double what they were.

Depends if your wife is planning to work, if you have or are planning to have kids. If you like holidays, meals out, car payments.

All I can say is yikes. Can you afford it when fixed rate ends if the rates go up again?

So if you know you can’t afford it, why are you asking? Is your wife pressuring you to take on a big mortgage?

Agree with this.

Also, you've answered your own question, OP.

You can pay £1500 rent, and save £100 or £200.

Therefore you can afford £1,700 maximum.

That's really all there is to it.

Good lord. Of course you can't afford it. And the fact that you felt the need to ask on mumsnet demonstrates that you lack the maturity to own a house. Or have a wife for that matter.

Not only is that an absolutely crazy and unaffordable plan but I think you have got your calculations very wrong.

Borrowing 5.5 times your salary would imply a gross salary of well over 100k, but you then say that your take home income is only £4200/month, implying a far lower income.
According to this mortgage calculator: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/
borrowing 575k over 25 years at 5.5% would give a monthly repayment of over £3500/month (not £2400). Even if you extend the term to 30 years, it would still be £3265.

Your wife needs to be in a full time job before you buy and even then you need to lower your budget considerably, unless she can find a well paid job, which it appears she is struggling to do at the moment.

Yes, I'm wondering if OP means buying a house at £575, with £110 deposit, so £465k mortgage.

Even then it doesn't stack up and is too much.

Household income after tax here is £6k, mortgage is 12% of income, it’s just gone up from 10% due to renewal and comparatively higher interest rate vs last time. I would start to feel uncomfortable if it were higher as it would hamper the ability to save, invest and enjoy life.

if you are willing to really tighten the belt for 5 years (sounds v.difficult with a teenager!) and guarantee to be in a better position when the mortgage comes to renewal, then possibly its doable, but you have zero margin for error and the world has been fairly volatile over the last few years.

its not a risk I would take personally.

A mortgage of around 275k would be just about affordable, but even that is very precarious, with no room for saving unless your wife gets a job immediately.