What is a manageable mortgage?

[SherryToes]

DH and I are moving. I am naturally a worrier and overthinker. DH is not a risk-taker, but more fatalistic.
We are moving house and have our eye on a house that would mean a mortgage of around £170k (house value around double that). Another house has come on the market that ticks more of our boxes, but would increase our mortgage by around £90k to £260k.
I want to stick with the house we liked originally, but DH wants to go for the new house.
We have sold but not offered on the first property yet.
I’m worried the mortgage would give me sleepless nights. DH says it’s fine.
WWYD?

I think it would depend entirely on your income and outgoings/childcare/debt etc

Is the standard a third of your salary? I'd get advice as to what the monthly payments are rather than the actual value and see that they are affordable.

No more than a third of your take home wage is advised however I’d be reluctant to take on a mortgage that you couldn’t manage if one of you lost your job.

Aim for a third. Less if you can. Ours is a sixth. I like that if dh dropped dead or fucked off I could probably manage to keep our home on my own.

Totally depends on what your income is? We got our first mortgage years ago and always had the rule that the mortgage would still be manageable if one of us lost our job (that may no longer be very realistic in today’s economic climate).

How would we ever be able to answer without a detailed insight into you and him and all your finances and future plans?? This is why you should see a decent mortgage advisor and get good advice.

Depends how much you earn, how much you spend, can you reduce some outgoings?

What percentage of your income are both mortgages? I've heard you shouldn't go over 30% but that could be rubbish!

As others have said, we went with one that either of us could pay on our own.

My test has always been, could we still pay the bills if one of us lost our job? If yes, it's ok. I'm not a risk-taker, though - I grew up in poverty and the thought of getting into debt scares me. Luckily DH thinks along similar lines.

Ours is a 6th if our take home pay and we are moving to make it a third and it stresses me out because i couldnt afford that alone. Im also not a risk taker and neither is dh. We actually had the house valued and photographed 6 months ago and havnt put it on the market yet

We both earn a fair amount. Our mortgage company have said they will loan us up to an absolutely ridiculous amount.
We could probably afford either on one income if one of us lost our job, but we’d lose some of our surplus - funds nice meals out, trips for the kids, holidays, etc. I grew up in a family that had to scrimp and save for basics and I think that makes me worry. DH on the other hand has never known that - well off parents, incredible childhood holidays, nice cars, etc.

I'm like you op. Grew up poor, DH didn't. I'm Not a risk taker but I've calculated that even if I lost my job I'd get one that paid less but I have other income sources to make up the shortfall . As a result I'm contemplating a house that would be almost double our current mortgage so we can be in a good catchment area

Sometimes you have to unclench your buttocks and go for it - as long as you've calculated the risks and have no other debt

I think the best way to look at at it is what's the surplus
So if after the mortgage is paid it leaves you with £2K a month, and bills food and commute come to £800 then you have £1200 surplus. (ie. a decent amount with no dependents)

That said, you wrote...
We could probably afford either on one income if one of us lost our job
so IMO you can afford the bigger mortgage so if you like it go for it.

We are buying next year and are going in at about £200K short of the max we can borrow because we want more holidays, clothes and nice restaurants less financial pressure

I don't get your thread. You cannot ask a bunch of random strangers whether you can afford an extra £90k on a mortgage without indicating what it would mean in terms of your income and expenses. How can anyone give sensible feedback ffs.

Our next house we'll be looking to borrow £300k.

Mortgages don't stress me out, other debts do but i know we can afford the repayments

Trojan I feel the same. I’d much rather borrow a few hundred thousand less than the lender tells us we can ‘afford’, and have our nice holidays, trips out, kids’ clubs, nicer car, etc. And no worry over the ‘what ifs’. DH is probably right in saying that these things always work out, but I’m a massive worrier. We also have a disabled child and I think it’s too big a risk for their future to overborrow.
The mortgage itself would be about £300pm difference between the two properties. When I write that i wonder what I’m worried about really, but then the payment amounts look a bit more daunting - one would only be £200 over our current mortgage, the other £500, which sounds like a LOT to me, regardless of our earnings.

What will you have left after mortgage/bills?

I think you should think about what stage of your career you are in too.
Ie you are a junior earning £20k but in 3-5 years you’ll be a supervisor on £40 or maybe a manager on £50k you can easily go for it
If you are already a manager then maybe there is Low salary growth potential so don’t stretch yourself as much.

I think having a disabled child is also a consideration, my view would be it’s much easier to facilitate everything in a more spacious house. the “extra” payment of £500 sounds affordable, if you could afford it on one salary.

I moved to a newer mortgage (am overpaying and it’s £300 more a month which scared me in theory at the time but in reality I haven’t really noticed )

So you can comfortably afford both options?

Bizarre stealth boast thread

I’m in a similar position and have gone for the bigger mortgage, but with a longer timescale. Our monthly repayments are slightly less but it is our intention to overpay by a bit each month to build uo a rainy day reserve and/or pay off earlier. We have done this with our current house and, if we weren’t about to move, would have paid off our 30 year loan in 15 years (not expecting so drastic s saving on the next one though as we have bigger costs). Our mortgage repayments this way are about 25% of our monthly income but we’ll aim to pay about 33% of our income towards them. This is more than manageable for us, and feels like a risk with taking, although the headline (£x a month until you’re 67) is alarming.

And if interest rates rise?

My friend has an amazing house, mine is less amazing but I was mortgage free at 38. My friend will be paying hers off till she retires at around 67.

What you really need to decide and your lucky in that it is an actual decision and not just something your forced in to which is your greater priority.

I was retired through ill health at 48, having already had ten years of no mortgage made everything much easier.

Barbeito not at all. I am genuinely worried. £260k seems like a massive amount of money to me. Sleepless nights massive. I have no benchmark to work against.
No idea whether that’s the norm. The most we’ve ever borrowed before is half that. It’s not about earnings, it’s about taking on a large level of debt. I could earn £200k a year and it would terrify me.
Adverse and Veni great points, thank you - I shall make those to DH in support of option 1.

If the mortgage company has offered to lend you far more than needed for the more expensive house then they have assessed your affordability and stress tested you to interest rates that are much higher than they are now, so on paper there is nothing to worry about.

If you want to go for the more expensive house you could always save some of the spare income you should have so you can carry on paying the mortgage if either of you loses an income for whatever reason. Also make sure you have sufficient life insurance or death in service pension benefits, should the worst happen.

But this is a slightly strange thread, most people struggle to afford the house they need, let alone one they want.