To think £350k is a huge mortgage?

[Isawthesignanditopenedupmyeyes]

I’m mid 40s and looking at buying my forever home, BUT would need a £350k mortgage. The payments would be 38% of my take home pay, sometimes less (up to 10% less) depending on overtime/monthly variation.
On the one hand I think you have to stretch yourself/take risks to get anywhere in life and this is my last chance to flex up as it were. On the other hand it feels a huge amount and I’d be totally irresponsible going for this at my later stage of life.
I’ve no idea what an average mortgage is either.
AIBU to think fuck it, I’m going for it despite the fact my heart is in my mouth?!

I would never take overtime into account when getting a mortgage, and spending 38% of pay is ridiculous. You’d end up being a slave to a mortgage rather than enjoying life

Depends where you are - not unusual in the southeast or london where a small terrace easily comes up go 500 000...

38% of your pay seems too much tbh

Is 38% a large percentage for a mortgage? What's average?

(Sorry for slight derail - just curious!)

It depends how much you earn. If you can pay your other bills and live your life on the remaining 62% of your earnings then it's fine. If you can't, then it's too much.

That sort of % is now the norm in alot of places in the UK.

People dont realise that a terrace is over 200k

We have a similar mortgage but payments are 22% of take home pay. Don’t think I’d want to commit to much more.
Depends on your other outgoings though.

The 28 Percent Rule
In general, lenders follow the "28 percent rule" — meaning no more than 28 percent of your gross income should go to your mortgage. To calculate how much you can afford to spend on housing, start with your total monthly income before taxes.

My payment on a 500k mortgage is about 33% of my salary and it’s ok. What you have left is the question I guess rather than %. If the other 62% covers all your outgoings comfortably then go for it.

I’m probably well within the 28% rule - that’s gross not take home isn’t it?

Would this leave you with enough disposable income to live comfortably enough and, super importantly, contribute to up a pension or other savings for later life?

(My perspective - we borrowed considerably less than the bank offered, to build up savings rather than tie up all our money in the house. I'll never have a large or grand house though, obviously).

What is your “forever home”?

I’m mid 40’s too. I’ve never seen a house as “forever”, but suited to my current situation.

For example we’re currently in a large detached family house. But in 10 years when the kids are grown I would definitely look at downsizing to a two or three bed semi or terrace, and then again when the kids have their own families I’d look again. Ultimately I’d like to end up in a city or town centre flat or small house with amenities on my doorstep. Then following that even I could be looking at an assisted living community.

So when you say “forever”, what do you mean? Will you really such a home in your 60’s and 70’s?

You will have options. If there is a possibility to downsize in the future you could look at interest only to free up some income in the short term.

I think if you do genuinely mean “forever” then yes, 38% or your income is huge. Will you need to scrimp? Forgo holidays and treats? Will you have this mortgage until you’re 70? Then what about retirement?

I’m in awe of how much you must all be earning, my salary is around £115k which I thought was pretty good, feels low if others have higher mortgages that take lower percentages of pay.
My husband is mainly a househusband but I’m hopeful he will start to have an income soon. I do worry if I ever needed or wanted to slow down work wise I couldn’t.

It depends how much you earn really. If you earn a very good wage then that percentage may still be very manageable. For me that kind of mortgage would mean I couldn't sleep at night.

@ToLiveInPeace- my calculations are AFTER pension has been paid. I pay a huge amount into my pension but don’t have any other investments.
@bluebluezoo by forever I mean until kids are grown up. No problem with downsizing then.

@bluebluezoo by forever I mean until kids are grown up. No problem with downsizing then

In that case i’d go for it. If the payments are huge and unmanageable look at interest only or extending the term, as you can recoup when you downsize.

To me “until the kids are grown” is short term, not forever . Different outlook :).

350K/115K = 3. That's a fairly standard amount to borrow. I think this is OK.

Fwiw I got a 220k mortgage earning 35k.

Interest only, and I paid lump sums off as and when I had the money. 15 years later I sold up and bought in a cheaper area mortgage free.

Sounds fine to me - you can always reduce pension payments in an emergency situation. Your pension payments must be immense or your mortgage rate very high though - what are your actual payments on the 350k mortgage? Is it a short term?

350k is a huge mortgage, and another problem is that they won't lend past retirement age. So, say you're 45 now (as you said mid 40s) you're looking at being able to spread payments over 20 years rather than 25-30 as you might if you had been younger. My dad split up with my mum when he was 54 and had to get a mortgage over 11 years which has almost crippled him but luckily (in a way!!) a relative died and left him money to take the pressure off.

There is no way I want to be tied to a mortgage in my 60s.

You have a large salary, you can afford it. Our household income is 100k and our mortgage is around 190k. We’re in our forties and I think that’s a big mortgage to have.

Our mortgage payment in around 21% of our monthly income but we overpay to around 28%. We can still save for emergencies and home improvements.

38% for us would be dangerously close to unaffordable but we have other large outgoings such as childcare.

I think it’s a crazy amount but then I don’t earn anywhere near the amount that I’d get a mortgage for that but you plainly do, so it’s all relative.

We have just pulled out of taking on a £376k mortgage. We were putting £130k down (over 25%) and it was under 20% of our take home. It freaked me out too much so YANBU to feel freaked at 38%.

For now we’re sticking in our cottage which is under 10% of our take home.

Do you have 6 months emergency fund saved in case of job loss etc?

The main question with that amount is would you be able to continue paying if you lost your job. Ie walk into another job, take in a lodger etc.