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?!

Just seen you earn 115k, can't get myself to bother with this post now. 🙄

Industry standard is to keep your mortgage commitments to no more than 36% of GROSS pay, though typically it is around 29%. If you can keep all your monthly obligations to no more than a third of your pre tax income then you should be fine as you are talking net and after pension contributions.
The average mortgage is just over £132k, a fairly meaningless figure as the average house price figure. At one point we had a £1.2m mortgage, but the rate we had was less than 1%. I think that is where you have to be cautious - the rates are good now but I do remember when they were 14%! Rates are unlikely to go up anywhere near that soon, but you should factor in a small increase over then next 5-10 years. But you can also factor pay rises.
Only you know what level of debt you are comfortable with, but if I were you I’d go for it.

Gosh! Our mortgage is 16% of our joint income but we still struggle financially at the end of the month due to poor planning. I’d feel very uneasy with that % going on a mortgage but it depends on other outgoings I guess.

Don’t forget your monthly payment could increase when it comes time to renegotiate, or I’d you have an unexpected emergency that takes a chunk of money. It’s always prudent to have more wiggle room - 38% is a pretty high percentage

Huge mortgage but huge salary - plus you have £160k equity. Plus you've already taken into account large pension contributions. Plus you will always have work - and of you don't, you have IP and CI insurance

Go for it

@Derbee - it's just a comment on an open forum. Well off people feeling hard done by is a bugbear of mine.

OP, we have a slightly smaller joint income (and we consider ourselves comfortable and fortunate to have it) and our mortgage is £170,000 but we are overpaying quite a bit at the moment to catch up on about 8 years interest free. So, yes. £375,000 does seem like an enormous amount. We would not have stretched ourselves too far and we've been glad of that in lean times.

The pp with a £320,000 mortgage paying £1400 pcm - that must be interest only, surely?

I think it’s affordable for you and there are some good fixed mortgage deals around to give you peace of mind for two or five years. During that time you can overpay where possible. We’ve recently taken out a mortgage on the basis of working until retirement age (67) but I plan to retire early and use a chunk of my company pension to pay it off. It’s no big deal if you change your plans or things change beyond your control as you could downsize after living in a lovely house. Good luck!

@Isawthesignanditopenedupmyeyes

A £350K mortgage sounds bonkers to me, and especially if you are 'maxing yourself out.' Our house was £75K in the late 1990s, (now worth around £375K,) and I thought THAT was a lot. Actually it was for where I live. Also the interest rates were very high then, so the mortgage did take about 33% of our combined salary at the time.

About 5 years after taking on the 20 year mortgage (which was £70K as we put down £5K,) it dropped to about 25% of our income, then 20% after about 8-9 years...

It was a struggle for a few years, but we got to a point where we were able to pay more than we needed to. We did this for for several years (about 10-11 years after taking on the £70K mortgage,) So we paid the mortgage off 4 years early, and were mortgage free by our mid 40s.

But I would never take on such a high mortgage, if it was dependent on overtime!

Our mortgage of £70K (in the late 1990s) is around £140K in today's money, which isn't bad IMO. But the thought of a £350K mortgage is horrendous IMO.

Also, we were in our late 20s when we took our £70K mortgage on (in the late 1990s.). No way would I take on a £350K mortgage in my mid 40s. No way.

@eeksville I’m not saying that we can’t afford it. I’m just saying that borrowing a large amount of money will usually make people nervous. Whether a mortgage is “big” or “small” is subjective. Clearly by London standards, the fact that we are buying a house for £400k ish sounds like a snip. But it’s all relevant to where you live.

To commit to a property, at any price, I would want to know that we wouldn’t have to make big lifestyle compromises/adjustments for the sake of the mortgage. If OP and her family need to do this, I don’t think I’d feel ok about it. But that doesn’t make me right. Everyone has to do what they are comfortable with.

You're not that crazy. We only earn £40k combined and our mortgage is £200k.

That's big. We earn 100000 euro pa and have a 200000 euro mortgage. I find ours not too bad. I wouldn't have wanted to borrow more.

The pp with a £320,000 mortgage paying £1400 pcm - that must be interest only, surely?

No? We pay about £1100 on £325k, repayment.

I reckon that’s fine, you’ve secure employment and enough leftover - you do have to have a good think about the utility trade off between the house and the holidays though

@Nextphonewontbesamsung I don’t think the OP is saying she’s hard done by. She said her salary is pretty good. Which it is. She’s asking about whether her mortgage plans are too big.

I live in Cornwall and it's not uncommon to spend 50% of your income on your rent or mortgage and 350000 ball park doesn't go too far in a lot of villages.

having 68% left after the mortgage is one things on 20k and another issue on 100k.

how much do you have left after paying the mortgage. how much are your other outgoings. how secure is your job?

The pp with a £320,000 mortgage paying £1400 pcm - that must be interest only, surely?

Ours is similar. We have a very low interest rate.

Ours was certainly 50% of net income at various stages actually (and at one point £1.3m interest only which cost £90k a year interest, mortgage). We were paying 15% + by the way at one point although on smaller sums than people borrow now.

Important question: is this is fixed interest loan or a variable rate? If the former, then I think it's fine if a stretch--you seem sensible in your job, and it looks like income would only be increasing, not decreasing. If the latter, then it's too much.

I do think making a big plan like this before Brexit is hashed out is a big risk, though.

Spending 38% of your pay on a mortgage per month with interest rates at an all time low is not a wise decision. Mortgage rates will undoubtedly go up, probably by a lot, in the years to come. Your mortgage could double.

What will you do if interest rates go up? Can you still afford it?

Mortgage rates will undoubtedly go up, probably by a lot, in the years to come. Your mortgage could double.

Depends on her deal - I’m on a 10 year fixed rate.

I wouldn't be worrying about a £350k mortgage on your salary especially if your dh will soon be earning. But of course depends on job security, other outgoings, age of your kids etc, stuff wd don't know the answer to.

Everything is relative, so with the figures you state it would be a no-brainer to me.

You've got a good profession.

Renting (not sure if you are or not) can be extortionate in some parts of the country and is totally dead money.

My only advise would be to Not get an interest only mortgage. A friend of mine had one and could have had a cheaper yes cheaper repayment mortgage! So in effect she has wasted 10+ years when she could have been paying it off.

That’s plenty left! Our mortgage is 40% of our take home salary and we earn significantly less than you. Jus budget well and you’ll be fine.