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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to take out a mortgage that is nearly 1/3 of our household income?

52 replies

RevoltingPeasant · 30/04/2012 21:39

I honestly have no idea if this is normal or not. It seems like masses to me! - but is it?

DP and I have a net income of about 3500 a month; we don't have DC yet but hopefully will soon and will then have to factor in nursery costs of about 700. WIBU to go for a mortgage with repayments of about 1k?

Confused
OP posts:
Clary · 30/04/2012 21:54

That's a big mortgage, but then your income is pretty good too.

I am sure someone will come along with figures of what percentage of your income should go on your housing, but put it like this, it leaves you with £2,500 for bills, food, rates, transport and fun. Sounds OK to me.

JarethTheGoblinKing · 30/04/2012 21:57

What rent do you pay at the moment?

amicissimma · 30/04/2012 21:58

This reply has been deleted

Message withdrawn at poster's request.

JarethTheGoblinKing · 30/04/2012 22:00

£1k per month doesn't sound like a massive mortgage to me - ours has varied between £750 and £1250 in the time we've had it, but it's only a £200k mortgage.

tyler80 · 30/04/2012 22:00

YABU

1k out of 3.5k net income is nowhere near a third Smile

Original poster
RevoltingPeasant · 30/04/2012 22:01

Thanks folks. Jareth - 800.

amici - don't know! I had not thought about that Can you not get fixed rate mortgages?

OP posts:
LittlePandaBear · 30/04/2012 22:01

Remember that your mortgages rates could go up in the future, could you afford that? We pay a similar proportion with some childcare on top and it's do-able, we just can't have mad shopping sprees and fancy holidays without saving up. But my lovely house which needs more furniture is worth it Grin

Original poster
RevoltingPeasant · 30/04/2012 22:02

tyler yes it is net. Look, I am no good at maths and crap with money Blush As you can probably tell!! Grin

OP posts:
inabeautifulplace · 30/04/2012 22:03

Factor in plenty of other things too. You or your H may want to look after the baby yourselves rather than childcare. How good is your maternity pay? How secure are your jobs, i.e could you survive on one income? How much do you have in savings?

hardboiledpossum · 30/04/2012 22:04

Our rent is more than half of our income so I think a third is fine.

Original poster
RevoltingPeasant · 30/04/2012 22:04

Little it seems do-able to me too as long as we are sensible. Nice to hear that! Our holidays this year are in Yorkshire with DPiLs and Norwich, so fancy is not us!!

OP posts:
mercibucket · 30/04/2012 22:06

You might want to go part time (and factor in maternity pay for however long you plan on being off) so don't overstretch - just bear in mind

Original poster
RevoltingPeasant · 30/04/2012 22:06

beautiful no much in the way of savings (savings = deposit). I cannot give up my job as I earn about 70% of our income and DP probably won't as when he was unemployed he got really depressed.

Job security? - better than Jeremy Hunt's?

OP posts:
musicposy · 30/04/2012 22:06

When we first got married our mortgage was £500 which doesn't sound much but was half of our joint income. It was a struggle, but we managed it. The nice thing is, that with inflation, the amount effectively becomes less and less. It's still £500, but that's down to between 1/4 and 1/3 of our joint income now.

Both your mortgage and your net income are about double ours and we feel comfortable compared to 15 years ago. I think you'll be OK.

Blu · 30/04/2012 22:07

That would be a normal sort of rent for a 2 bed place on London, so you might as well have a mortgage. But do a really careful budget with all your outgoings listed and some contingency and make sure you can afford it. Plus a risk assessment on what if you are made redundant, how will your finances look once you have a child,

But I am sure that interest rates will rise so be very careful about what deal you get, if you decide to have a mortgage.

£700 a month sounds very low for nursery if f/t.

Original poster
RevoltingPeasant · 30/04/2012 22:07

I can't go p/t merci - it's Not Done in my line of work. A colleague of mine specifically asked earlier this year and was told no.

OP posts:
ItWasThePenguins · 30/04/2012 22:08

Our rent is 1/3rd.

Original poster
RevoltingPeasant · 30/04/2012 22:09

Does it, Blu? It is what my colleague pays for hers. The one I am looking at is 35/ day and it seems quite fancy (has its own swimming pool! - am considering registering myself!).

OP posts:
Mosman · 30/04/2012 22:10

Fcuk I'd love one that was only 1/3 of our take home pay, at one point it was 80%

Mosman · 30/04/2012 22:11

Inflation seems to require wage inflation to make it work, I haven't seen any of that in the past 5 years.

Original poster
RevoltingPeasant · 30/04/2012 22:12

Seriously Mos? How did you manage???

Music thanks - that is really reassuring Smile

OP posts:
Mosman · 30/04/2012 22:17

We didn't manage really we had to juggle/rob peter to pay paul but we got through it and now it's about a 3rd again so that feels really comfortable.
If we'd stayed in our first house the mortgage would be 5% of our take home for a three bed terrace, but now the 4 bed semi in a worse area is 30%. I do regularly kick myself DH

marriedinwhite · 30/04/2012 22:18

Jareth but our mortgage is only £200,000 Shock.

My first mortgage was £23,000 (1982). My monthly payments were £283, my service charge was £40pcm + rates £440per annum, plus bills - about £75 pcm. My monthly pay was £447. My lodger paid £120 pcm - thank God. But I took the risk and survived. Bought as the market was beginning to lift from the bottom. Just a year later and I couldn't have done it; five years later I sold for £92,500 and made a profit of £60,000, less cost of mortgage interest/bills of course.

I reckon in about two years the market will be starting to lift off the bottom and at that point salaries will be moving again too.

emsyj · 30/04/2012 22:20

Interestingly, that's about what DH earns net and our mortgage is £950 ish. It is just about do-able for us, but our childcare costs are less than £200 pcm (childcare vouchers and DD only goes for 2 short days a week so I can have time to do housework, laze around etc Smile). We couldn't afford a £700 a month childcare bill.

We can pay our mortgage, bills, food & pension contributions (currently we pay £400pcm between us into our personal pensions) but we don't have much left over and any expenditure is planned. It will be easier when I go back to work in September, but at the moment we have to be quite careful. We do have 2 cars though (DH travels over an hour each way to work so diesel costs for him are quite high). We don't have any debt other than the mortgage though.

wonkylegs · 30/04/2012 22:26

My nursery fees in the NE are currently about £850 a month for f/t but that includes free hours + the fact they are cheaper when they are older. When he was a baby it was more like £1000. I'm guessing if it's cheap then everything nappies, formula etc is an extra.
Don't underestimate how expensive going to work f/t can be with small kids (esp with a professional job) i've had to factor in a fair bit of babysitting in addition to nursery fees to cover meetings/events/trips that I've had to do when DH is also working.