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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think this is a massive mortgage?

139 replies

catsbananas · 04/05/2016 20:06

Just wondering if I am completely out of touch here. My sister emailed me today with a link to a house she is buying. They are moving from a house they have just sold for £250k, a pretty ordinary three bed semi. The new house is a detached five bed, which they are buying for £560k. I knew they wanted to move to something a bit more "forever home" but am honestly shocked at the price. Both work in the public sector, he in a managerial role in the health field on about £70k and she as a lecturer on about £50k and they are both 40. They have accumulated about £120k worth of equity in the old house. Yes, I know it isn't really any of my business but I was surprised that they are taking on this kind of debt. I wouldn't be able to sleep at night and the combined income of me and DH is only a bit lower. AIBU or is this a massive mortgage?

OP posts:
ClarkL · 05/05/2016 08:13

There are three things I want in our next home, large 4 bedrooms and a study, large garden and tiny mortgage. I know one of those 3 has to go, for us we're sacrificing the garden, but for others having a large mortgage isn't an issue. They may not like fancy cars, holidays, meals out, they may be home people who enjoy their home.

Each to their own

Trills · 05/05/2016 08:16

When l remortgaged last year the mortgage advisor made a comment that it was a big mortgage

Unless they were advising you on your ability to repay they should shut up.

KayTee87 · 05/05/2016 08:23

I think it's a normal amount compared to their salaries but at 40 I personally wouldn't want to take on that extra debt. Our mortgage will be paid off when I'm 48 for which I'm very grateful and I also realise we're lucky in that we won't need to upsize. Maybe they need the extra space or something.

ExConstance · 05/05/2016 08:35

Having moved at 40 myself I now wish we hadn't mortgaged ourselves up to the age of 65, it is not so much the payments but the feeling we still have commitments when our friends who moved to their right sized family homes a few years earlier now have more freedom. OP, your sister and her husband both have public sector pensions coming, which are still a better deal than private ones and will generate big lump sums, also presume their jobs are pretty safe, so I would say that a mortgage of that size would scare me silly but probably because I'm ultra risk averse and would never borrow so much that we couldn't comfortably live on one salary if we needed to.

Fruu · 05/05/2016 08:45

YANBU. What if one of them gets ill or is made redundant and can't easily find work again? In comparison to average incomes it's an eye watering amount as well.

Personally I can't understand why anyone would want to take on extra debt at that age - IMHO it'd be far nicer to have a choice about retiring or semi-retiring earlier.

Trills · 05/05/2016 08:49

What if one of them gets ill or is made redundant and can't easily find work again

There's insurance for that, if they choose to get it.

My work gives me long-term sickness payments (not sure of the exact term) as standard.

Or they could sell and move somewhere cheaper.

It's all very well couples saying "I wouldn't buy somewhere that we couldn't afford on one salary", but remember that lots of people/families start out having to afford their home on one salary, because there is only one adult. So that safety net is a luxury that you can afford but most cannot.

DiggersRest · 05/05/2016 08:53

trills I was honestly shocked he thought it was a large amount that l actually just laughed and said well it's not as big as it was when we first bought. But l did then have a moment of is it a lot? Confused

HereIAm20 · 05/05/2016 08:57

We live in an expensive area where house prices continue to rise year on year at a silly rate. We have just bought a house with a similar mortgage (our old mortgage was practically non-existent) to move close to my son's school (independent school so not moving into a catchment - merely for convenience). We have a repayment mortgage so in effect this is an investment as it is unlikely we would actually save the amount we pay on the mortgage, and we can take advantage of the currently 15% per year house price rises. Then we can downsize and take the money out. No brainer really

Schwabischeweihnachtskanne · 05/05/2016 09:05

I am in the "Anyone who uses the phrase Forever Home is being unreasonable" camp :o

Do they have four or more small children? I always wonder about people who (over) stretch themselves to their financial limits to buy a very large detached house with 2 or more bedrooms than they need, or who borrow very large amounts to make the purchase of an enormous family home which is going to take them 25 years to pay for when their kids are likely to be leaving home within the next few years...

Of course you are right and you know it is none of your business, and they can take out insurance (to add to their monthly outgoings...) against involuntary redundancy...

I'd get stretching themselves like that if they actually need the space, due to currently being squashed into a 3 bed with 6 kids... but if they have one or two kids or teens it would seem an illogical choice to commit themselves to high monthly mortgage payments for the next 25 years, in order to rattle around an enormous "prestige" family home in their 50s and 60s looking like they've "got it made" but still having to go without other things to make the payments until they are 65, when surely a house like that will be too big...

Schwabischeweihnachtskanne · 05/05/2016 09:10

HereIam the buying as an investment, aiming to sell and take out a massive equity lump sum is very shrewd and practical - the phrase "forever home" suggests they intend to be in that 5 bed detached house forever... long after they need the space or can physically manage to maintain it probably...

Pisssssedofff · 05/05/2016 09:15

I see lots of elderly people rattling around in huge houses that must cost a fortune to maintain because of course that home is full of memories

AnonymousBird · 05/05/2016 09:18

It sounds reasonable enough, but on the basis that we were only offered a mortgage of ONE times salary, don't get too excited until you've got a mortgage offer!!

They would only lend us 30% of purchase price against a very high annual salary total.... it's all changed so much. No idea how people get 4 x salary these days...

PutDownThatLaptop · 05/05/2016 09:20

I am hugely risk averse. Joint income is 90k and mortgage has 135k remaining on it, with a house value of 180k. Mind you, that buys a 3 bedroomed detached round here.

Schwabischeweihnachtskanne · 05/05/2016 09:21

Pisssssedofff oh I know - ending up doing that because you can't stand to leave the home you brought your newborns home to/ your children got married from etc. etc. is sentimental and impractical and a little annoying because it pushes up prices but of course totally understandable on an emotional level - deliberately planning to do that before you have even moved in, by consciously seeking out and taking on a lot of debt in order to buy a very large "Forever Home" in your 40s (or at all really) seems crazy though.

rosettesforjill · 05/05/2016 09:22

I don't think it's massive - our situation was almost identical when we bought our current house. In fact, I'd think you were my sister if we hadn't already bought our house last year and I wasn't 30 rather than 40!

This size mortgage is definitely manageable for us. We would actually have been lent more but we would have been overstretched at the top end.

BonerSibary · 05/05/2016 09:23

People have already pointed out trills that insurance against sickness is easy enough to get, much less easy to get to pay out! This is a risk however you slice it, because they're reliant on a pretty high income until pretty late in their working careers to pay it out. Doesn't follow that it's a bad decision, but a big mortgage also comes with more risk.

TeddTess · 05/05/2016 09:26

Um, to qualify for an £800k mortgage you would need an income of £200k+, which is firmly in the top 1% of incomes.

you don't actually.
many mortgage companies look at affordability rather than salary multiples. plus if you have a lot of equity you are a low risk.

BarbaraofSeville · 05/05/2016 09:27

Wouldn't sickness insurance for that sort of income be hugely expensive? Anyway in the public sector they are likely to be on something like 6 months full pay, 6 months half pay, decent death in service benefits and decent redundancy terms if they have been in their jobs a while, although the government is trying to cut these massively.

shovetheholly · 05/05/2016 09:31

I would be absolutely sick with anxiety at the thought of debt like that. But other people don't bat an eyelid: they just assume that they're going to go on earning more and more, and that life will go on much as it has. I think it has a lot to do with personal attitudes to risk, and also life experience (perhaps if you have experienced ups and downs with health, you have more of a sense of the contingency of life than those who haven't?)

BarbaraofSeville · 05/05/2016 09:31

Don't the 3 or 4 x salary limits apply at that level Tess? Since I posted that before, someone else had said they could only get one times salary and needed a 70% deposit in similar circumstances.

Whatever the rules are, I'm sure that anyone qualifying for an £800k mortgage is on a salary that is massive to 95%+ of the population, which was the point I was making anyway.

chillichoclove · 05/05/2016 09:32

Are you my sil? Those are remarkably similar to our circumstances (except we are in London where you don't get a 5 bed detached for so little!!) Hmm we are moving to a three bed. It's perfectly doable. Getting the mortgage wasn't a problem and we will be able to overpay.
I think you are probably more risk averse

MyballsareSandy2015 · 05/05/2016 09:33

They wouldn't have to worry about sickness as they'd both get 6 months full pay if sick followed by 6 months half pay.

Georgina1975 · 05/05/2016 09:34

It is fine if they are comfortable.

We bought our house for £150,000 in 2007. We have £60,000 remaining and our mortgage is £350 pcm.

We have a combined income of c.£100,000 pa. We could buy a much bigger house in a nicer area. But the size and area is fine for us and the mortgage will be paid off within the next 6 years.

I want to own our house and I want the financial freedom that will bring while I'm relatively young.

Viviennemary · 05/05/2016 09:35

Sounds fine to me. They're both on good salaries and if they're prepared to continue to work full-time then it's quite a good move. We've been far too cautious I think.

shovetheholly · 05/05/2016 09:36

myball - that actually runs out remarkably quickly if you have a serious illness, like cancer. My Mum's treatment (chemo and radiotherapy alone) went on for 12 months - and that was before another year of hormone treatment that made her really ill. And that's cancer, where you can make a full recovery. With many, many illnesses, you can't.

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