What is your mortgage/Salary ratio?

[Waisted]

How many times your salary (or combined household income) is your mortgage or what was it when you got it.

Looking to buy a home and wondering what people feel comfortable borrowing. We have a combined income of £85k, (likely to rise by another 10k in a year or two) and deposit of approx £100k (subject to sale of DPs house).

DP thinks we should be looking at homes in the £250 and under bracket but I think we could easily stretch to £300k

No childcare fees to consider.

~120k pa. £1600.
Feels okay, I mean it was annoying it went up so much when interest rates went up but we are comfortable

My mortgage seems quite large to me. I bought my first home in 2023 in an expensive area. Housing costs (not just mortgage but additional things like insurance and service charges) are well over 40% of my income. Total mortgage was just over four times my salary.

So, now it’s been almost two years. I would say that it’s been a “struggle” in that I don’t have as much disposable income as I would like, we’re certainly not having fancy holidays or anything. But we eat well, the utilities are all paid and we have a relatively expensive hobby that has been maintained (oh and a cat who has needed specialist medical treatment!). In August the mortgage fixed rate will end and rates have now come down a bit so there is a bit of relief on the horizon. And that I think is the most important bit … could you cope if mortgage rates change significantly?

Would also note that I have not had a pay increase in that time, not even a minor cost of living increase.

@mindutopia sorry just want to interject the thread to say (in a very unMNsnetty fashion) that I am really sorry to hear that, I regularly name change but know you to be a regular poster over a long period (and possibly even from a previous parenting forum I used to frequent...?), but I wish you a speedy recovery, good luck with the treatment

I bought a house 4.5x my then-salary, with 0.8x my salary deposit, so borrowing 3.7x.

My contractual mortgage payments started as about 25% of my salary and are now 17% of my current salary because I've overpaid when I could afford to from the start and used the overpayments to lower my contractual payments instead of shortening the mortgage term. I now overpay every month, paying 25% of my salary in total and tweaking the overpayment amount every year to keep it that way. I do this so that, should I lose my job, I have the lowest possible contractual payment and have a chance in hell of affording the contractual payments whilst in a lower-paid stop-gap job.

The only pay increases I've had have been CoL increments because I was appointed at the top of my pay grade.

I've never been "running on fumes" financially, however I have a lot of work I'd like to do on the house (new kitchen, new fence, new windows) that I am deferring until my mortgage is paid off because I can't afford to overpay and get substantial work done at the same time.

£120k annual hh income and mortgage is £1400/month but we overpay so it's actually £2k. House was £360k and our mortgage was £300k.

Combined take home around £4500 pcm.

Mortgage just under £800 pcm

My monthly mortgage is about one sixth of my income, but I'm 14 years in so it has had time to shrink.

As a single mum with 1 DC, and about 6 months money saved in the bank, it feels comfortable. It's taken a while to get here..

Mortgage gone up to about 2.5k/month, take home about 9k. With bills and nursery fees it feels a bit tight.

Household income £116K, mortgage £2K a month. (South!) no childcare costs anymore.

When we bought 10 years ago, our household income pretax was around 70k, deposit 35k. Our monthly mortgage has been around the £800 mark but will increase later this year to around £1000 when our fixed term ends.

Consider if you'll have childcare or other costs (we had a 3 year period of £1000/month nursery fees) and have spent around £60k on renovations which I guess averages out at about £500 month.

Our income is now around 110k but I'm hesitant to move to a larger property due to job insecurity - another thing worth considering.

Wow only £360 a month for housing 😯 You are living the dream! (cries in £1000+ per month rent)

Household income £100k. Currently have £140k left on the mortgage which is just over £800 a month - bought a house in 2019 for £250k and about to put it on the market for somewhere around £300-320k. Looking to buy somewhere up to £600k next, so would be about a deposit of £160-180k and mortgage of about 4.5x household income. We live in the SE so this means swapping our 2 bed mid terrace for probably a 3 bed semi. I’m not enthralled with such a big mortgage but realistically prices aren’t coming down, we need a family sized house and we can still afford it (about £2.3k a month) and the bills on my salary alone. My job is as safe as they get so I’m comfortable enough with that.

Buying a £250k house with a £100k deposit on your income seems extremely conservative to me. When we bought our current house for £250k our income was about £50k and we had a £30k deposit! Would you be happy in the cheaper house options? Couldn’t you just sell the house in the event you got divorced? (Are you actually married? In which case isn’t the house a marital asset anyway?)

Oh my word, this is an approach that warrants some unpicking.

A bit of 'what if' thinking is healthy, but planning your marital home choices based on who gets the house when you divorce is not right IMO.

I'd be worried about the fact he's mentally keeping his bags packed!

Sorry, I know this isn't the Relationships board. In answer to your question, the standard advice is one third of take home pay on housing is comfortable. Child care costs need to be considered.

Ours is 8 percent of our income.

The highest ratio I’ve had is when my take home pay from working 48 hours a week was just under £850 a month and my mortgage was £786.

Rule of thumb is your monthly mortgage payments should be max 20% of your net take home pay. But I appreciate these days it has probably gone higher. Our mortgage is 15% of our net take home. We also pay school fees.
Your DH is being very conservative especially without childcare costs. I'd say you could stretch comfortably to £1.2k a month.

20% seems very low. The 30% often quoted (including by me above!) dates back many decades.

Our take home is £7k, mortgage £1600. It’s fine, we don’t have childcare costs any more and no big train ticket / commuting costs. We save £1000 per month easy as well as living a nice life. It depends on other costs but I would stretch

Mortgage costs should be 50/50. He takes his deposit back out at the end if you split up. Don’t let it be a percentage value either, otherwise you will be fucked and loose the benefits that come with buying a first home, whilst he continues to keep the benefit

Currently out mortgage is 9% of take home. We are moving soon and new mortgage will be 26%of take home. We have no childcare fees but one dc at university. This feels fine. We've had a lot of disposable for spending and saving in the last few years, have supported 3 x dcs driving lessons and 2 x dcs uni costs and have had some amazing holidays. I'm the higher earner and even if I don't get another promotion, my salary will increase in line with banding so in two years costs will drop and income will rise, and we will start to overpay the mortgage again.

My lender only allows one annual overpayment to a max of 10% of balance - so I tend to get to the end of the tax year and figure out how much (if any) I can pay. They give me a sort code, account number and a reference number to use and I pay it through internet banking (or CHAPs if the amount is over my internet banking limit). Have to do the CHAPs thing for large payments as they literally only accept one payment so I can’t break it up into smaller amounts.

Would prefer to overpay by setting my monthly repayment amount higher but my lender doesn’t allow that on fixed rates only trackers.

Thanks for the comments about the overpayment. We will look into.our lender specific rules

Our take-home is c.£4k, mortgage £650/month. However our term is up next year, and looking around it’ll go up to around £850/month unless rates change drastically from now. We’re fine at the moment, but that £200/month is going to hurt.

We bought our house for £240k, and at the time were approved for a much larger mortgage (I think we could’ve gone up to £320k). I’m very glad we didn’t go for the bigger house & bigger mortgage now.

Much of this will depend on the type of house you can buy in your area though. For us, £240k got us a 3-bed semi in a quiet road on the edge of town (we back onto fields). We’re a family of 4, so it’s just big enough. A 4-bed detached would’ve been £300k+, not significantly bigger (more but smaller bedrooms) and in the middle of a newer estate. The extra cost basically just to be detached wasn’t worth it for us.

My mortgage and service charge total of £975pm is 32% of my take home pay, my mortgage is just shy of 3x my salary. I am perpetually skint but that's living in greater London on not much over average salary for you! In your shoes, going to £300k seems reasonable.

Thanks for the replies, they vary so wildly it’s good to see there is such a range.

We won’t ever have childcare costs so that not a problem. I have kids but they are college age and older, I have one more year of helping with uni fees as DD wants to get an apprenticeship instead.

I don’t have any car costs (company car), DH owns his car and has low insurance & Tax costs.

The difference between <250 and around 300 is a 3 bed semi or 4 bed forever home in a nice area.

I am not worried about him thinking about what happens if we were to split, I have driven those conversations equally as we have both been through the wringer before and not so idealistic as we once were.