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?!

My first home in the '70s cost me 75% of my take-home pay and was at 13%.
My next one in the '80s cost me 105% of my salary and if it hadn't been for overtime and expenses I would have been in trouble. It was the price of three average properties today. I consistently worked 80 to 100 hours each week until the pressure eased and it was paid off. It worked for me, I didn't go without, travelled the world and had a great family lifestyle. The only downside was that I'm careful with money and think that going to bed before 4.00am is for others.

I’ve heard that you should never pay more than 28% of gross monthly income on mortgage/rent. Not sure how that compares to 38% of take home pay.

Posted too early. We are about to take a big mortgage out. It’s 16% of our gross monthly pay. I’m nervous about it. My DP is keen. I said it was only worth it if we can still drive whatever cars we want, go on a decent holiday every year, and still put savings away every month.

I wouldn’t be happy compromising my lifestyle for a mortgage, but each to their own

I agree waiting to see what happens with the economy would be wise as house prices may very well drop :-(. If you’ve already fallen in love with a property though, wise isn’t always what we do! We renegotiate our mortgage every 2 years to keep it at a lower rate which is pretty simple to do.

Your job is secure as it can be, so this sounds fine. Build up a good buffer of savings, at least 6 months, if you haven’t got one yet.

We are about to take a big mortgage out. It’s 16% of our gross monthly pay.

It's not really big if it's 16% of your pay though is it?

Just remember that situations change , how secure is your job, are you likely to be able to mind similar salaried work if you get made redundant/company folds, what would happen if you get sick long term (in your 40's this is a bigger consideration than your 20's) I would always want it to be paid off before state pension age, ideally by 60 because it can be very hard to find work after that age if you are laid off.

If it's purely on your income, how much could you dp earn realistically if needed (interest rates could rise dramatically).

It's a lot of money if you cannot then enjoy life, what is your actual residual income after mortgage, council tax, insurance and utilities?

Have you applied for the mortgage I’m not sure they take overtime into consideration as it’s not guaranteed as such.so they would just work it on your base salary. That’s what happens here anyway (not uk)

I am about to remortgage to buy out my ex. My payments will be 32% of net income (inc cm which doesn't count for much of that) Its a little higher than i'm comfortable with especially as everything falls on me but no choice if i can to buy him out. I'm mid 40's so 20 year mortgage as well

Youngest us 8 so will also lose couple of hundred childcare in another 3 years. sure she will cost it in other ways though!

Interest rates go up and you are repossessed!!

But 28% of a smaller salary is much more risky than 28% of a larger salary. I don't see how that is comparable. After basic bills such as food, car etc there would be much more disposable income with a bigger salary as many of the basics would still be similar regardless of the income..

I think you will be fine op.

How will you monthly repayments compare to what you would pay in rent? Because whilst 38% of your take home pay is a lot, if it's roughly equivalent to what you would be paying anyway in rent (or even less so) then you may as well go for it.

How much money would you be left over with each month after mortgage and bills?

The other thing to consider if you are medical (I’m assuming consultant with some CEA awards) is the pension allowance and taper tax. Lots of consultants and GPS have been hit unexpectedly with large tax bills, sometimes £50k plus.
Hope you get your dream house!

I’m mid 40s too with mortgage fully repaid a few years ago. We could move with a mortgage but no way do I want to compromise our current comfortable life even if our house could be bigger/better. Don’t want to be a slave to it when we have enough. Kids are going off to uni, don’t need more space.

@eeksville but it is a big mortgage. Who gets to say that it’s not? It’s a lot of money, therefore its a big mortgage in my eyes. It’s only slightly relevant to me that it’s 16% of gross, because I’m nervous about someone losing a job, or needing to pay childcare expenses etc.

A mortgage can feel big, and make you nervous regardless of % of income. So the 28 rule isn’t necessarily the best measure. If the OP and the whole family are making adjustments to meet the mortgage, it might become stressful and they may resent it in the future.

If timing didn't matter, and you didn't have your heart set on a specific house, I would definitely advise waiting to see what happens to house prices over the next year.

But sometimes you fall in love, and love makes you do silly things :)

Personally I wouldnt do it. What term are you looking at mortgage wise, if 25 yrs you are looking at having a mortgage until mid 60's. That alone would put me off

Of course your salary of £115,000 is pretty good [rolls eyes].

@Nextphonewontbesamsung how is this comment helpful? Either offer advice/experience or why bother posting?

Just worked out ours is only 14% of our joint gross monthly pay

Why are we always so fucking skint then

Huge but depends on your salary and if you savings.

@OMGshefoundmeout 650k mortgage 10 years ago on 'nothing flashy' in zone 6? I'm genuinely perplexed. Or perhaps you have a very generous definition of 'nothing flashy'

OP, it does sound doable especially if DH is looking to get into the workplace.

Having said that, is this 'forever home' a bit of a necessity (e.g. going from 2 to 3 beds with 2 children) or more of an indulgent home?

@Derbee I disagree.

If you have a “big” mortgage which is only a very small % of your income you are in a much stronger financial position than someone who can afford a “small” mortgage. It’s not slightly relevant that it’s 16% of your salary.
Job losses & redundancies are not just a concern for high earners.
I believe the av FTB mortgage in London is 300k so I would consider a big mortgage to be 500/600k plus. Say repayments are around 2k, if that’s 16% than your monthly income would be around 12k leaving you with 10k. I know childcare & the cost of living is high but it’s very unlikely you will be getting through 10k every month & not putting a couple of k into savings.
My mortgage payments are around 13% of our income & we have loads of equity. When we move it will probably be about 18%, it doesn’t make me nervous in the slightest as I am fully aware that for most their average mortgage/rent payments are much higher than that!

Never worked mine out until now. It's 12.5% gross and I always overpay it to take it to 20-25%
Nearly gone now.

We pay 20% of our joint wages but we rent.

I don't think 38% is particularly a lot.
Your still technically keeping the money and if you can afford it then your fine.

Don't take into account overtime though.