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 don’t think this is a huge mortgage based on London prices but I wouldn’t like to be taking sole responsibility for repaying it.

How many years is the mortgage for? Will it still be the same, what I think is high , percentage when you are 50/60?

I absolutely skinned myself each month and took a large 30 year mortgage 10 years ago. Since then I’ve overpaid and saved as much as I could. I even went on the standard rate for a month when my deal ended so I didn’t have a limit of what I could overpay before I changed deals

I’m now looking for a new mortgage deal and have sliced 10 years off the term and am planning to overpay and save again. Is this an option for you?

@Derbee I just don’t think it’s helpful in discussions like this to simply say “big” etc without any context because as you say it’s subjective. It’s important to consider all factors, the OP has a good income, a secure job & a hefty deposit. Yes it’s a high percentage of her take home but it still leaves her with a good amount because she has a good income.

Average london property costs 460k & in many parts that wouldn’t get you a 2 bed flat so many people in London do have to spend a lot of their income on mortgage & in many cases it’s more expensive to rent. I don’t think it’s particularly constructive for posters to say I would be terrified of anything more than 10%, etc. In the same vein I would never go onto a thread & not understand why someone can’t afford a 300k house because I have 350k of equity.

I'd look less at what % it is and more at what I'd actually have left after. You earn a lot of money, so 'only' 62% left is probably more than 75% of people are living off anyway. I guess it depends on whether you want this more than the other stuff you could buy with the cash.

@Isawthesignanditopenedupmyeyes We’re in a similar position to you -at least we were about 6 years ago. Both medical, one FT, one PT. It is do-able but things I would suggest:

1. Think very carefully if the house needs a lot of renovation. You don’t want a large proportion of your salary going on both your mortgage and an ongoing programme of renovation/decoration/restoration. (Expensive houses have expensive costs). It can start to feel like your house owns you rather than vice versa. And having little money for leisure really starts to grind you down when you have a demanding job.

1. If you go for it, make a small overpayment from day 1, even £50 a month. You won’t miss a small bit extra right from the start and the best deal you get might be as a new customer. When you remortgage after the introductory deal you’ll be glad to have seen good progress and hopefully a reduction in your payments.

1. Get a good medical/dental specialist financial planner to arrange your mortgage. They will get you a better deal as they understand the stability of medical salaries including overtime payments and how to ensure lenders get it too.

1. With such a large mortgage it is probably worth getting your house formally revalued every 5 years or so (if you know the trend is upward) to ensure you are always on the best deal at the the lowest LTV.

I love my house, and it has the feeling of being a great asset and legacy for the future, but I can’t say there haven’t been times I’ve wished we bought smaller and cheaper so that we could be just a little bit more hedonistic. But after 6 years of payments in the region your are describing, with a £50-100 over payment, it is looking like at our next remortgage we can half our repayments by ditching the overpayment and extending the term till the eldest of us is 65 (we’d always aimed to have it paid by 60). We are definitely going to do this so we can live life a little bigger, safer in the knowledge that we’ve put some serious equity into the house, and like you we are insured to the max against the unexpected.

@eeksville I think you’re nitpicking tbh. Let’s agree to disagree. OP asked for advice on whether her mortgage will be too high. I wouldn’t be comfortable with a mortgage that high when it meant having to change my lifestyle to afford it. I’m well within my rights to say that on a public forum. OP can consider that, or ignore it.

Depends on your earnings I guess.

Mine is much much more than that that-can you afford it?

I think it's worth doing some calculations on the effect of interest rate changes to your monthly repayments - interest rates are currently very low so must be expected to rise at least a little in the coming years. What's comfortable now might not be if interest rates are 7-8%.

Looking at buying a new house, ours will be around £700k.

Totally irrelevant question, dependent on your income and outgoings and general affordability.

Dh earns the same as you and our mortgage is 412500 and still only 25% of his take home pay and that's only 100k as 15k is bonuses. Have you got a very high interest rate?

Actually that's a lie it's 25% when the bonus amounts are included but either way you seem to be paying a lot

You can get mortgages behind the traditional retirement age now in fact.

My ex aged 45 got a 25 year mortgage to buy me out (idiot).

If you're planning to downsize when the kids leave home in fifteen years it actually doesn't matter how long the mortgage is for as you'll end it before then - except of course the longer it is, the more it costs in interest, though the more affordable it is day to day.

350k is a huge mortgage, and another problem is that they won't lend past retirement age.

Completely incorrect, loads of lenders will lend past the state pension age, just require you to show your plan for why you are doing it. My current mortgage is based on me being 75 before I pay it off to keep the monthly cost lower. The low interest rates mean it is more sense to dump money into pensions to obtain tax relief and then use those to pay off the mortgage in due course. Quite a common tactic for many currently whilst the pension relief is still available and mortgage rates relatively low.

As to the OP plan, as long as you are comfortable then it seems a valid plan, if there is a chance of a second income at some point even more so

Yes you can get a mortgage after retiring. My husband did for investment property, he said he'd be paying the mortgage until he was 75 (if he'd lived that long).

I think it’s a lot. I’m 40, as is hubby. We took a £385k mortgage 16years ago, and were able to pay it off earlier this year. We both bring in decent salaries, but it was still a real noose. I’m so glad to be shot of it, and now we are enjoying some fun times that were much harder with the big mortgage to pay. I’m glad we did it when we did, but I wouldn’t willingly enter into that situation again. Look for something cheaper and have fun. It’s just a building, and it will most likely still be standing when you are long gone.

Our mortgage is about 30% if our income . I didn’t think that was too bad until I’ve seen others posts here! I try to think of it as an investment

My DD and her new husband are looking for a forever home in which to have children. On a similar amount earned to the OP they are looking at houses which will require a £400,000 mortgage as the area is one of the dearest in the country. However, they are both earning so would have money still coming in if one were made redundant.

When I bought in 1979 the loan to earnings ration was about a third and my DH and I paid nearly 40 per cent of our joint income to buy our first house when the mortgage rate was 14 per cent.

Sometimes, to get what you want, you have to grit your teeth and go for it.

How would the OP feel if she and her family were still living in rented accommodation when she was 50?

Of course, if the Marxist, Jeremy Corbyn, gets in he will asset tax her property away from her and take it drip by drip for the state where he will let his friends and supporters have it. That’s a new factor in house buying that no one hitherto had to take account of.

Think your over stretching problem is interest rates are at an all time low. How could you cope WHEN they go up .

I think looking at percentage of income is meaningless. 25% of a 30k salary is a very different prospect to 25% of a 150k salary because what matters is available income to pay fixed costs.

In the OPs case it wouldn’t be the size that would bother me but age.

Your salary is at that really irritating point where you’ve just lost your nil rate band at one end and have 45% at the other.
However - you have excellent overtime prospects to use for overpayments, and what about a private clinic at some point?
More to the point, what is your husband’s earning potential? What childcare cost would you incur to cover him working?
I’m v cautious and would ramp up the earnings a little before taking on a 38% mortgage but it sounds like you can, and it sounds like you can make overpayments which are the very best way to reduce the cost of a mortgage atthe start when the higher % of each payment is interest

Teacher - similar here. We even had a 10 year fix at the bargain 15% (less than our variable mortgage) - great deal (not) that turned out to be when interest rates went below 15%.

So you'll have £3k (up to £4.5k some months) left after mortgage and significant pension contributions? I think you'll be fine OP

38% of a great salary like that is far more do-able than 38% of a normal salary. My DH earns (what I would consider) well above the national average and brings home £2.2k after pension. At 38% we'd have £1.4k left after mortgage, which could be tight (but again, to others might seem like a fortune).

@Teacher22
"Of course, if the Marxist, Jeremy Corbyn, gets in he will asset tax her property away from her and take it drip by drip for the state where he will let his friends and supporters have it. That’s a new factor in house buying that no one hitherto had to take account of."

Sorry to derail your thread OP (won't make any further comment on this) but completely fed up with reading absolute twaddle about Jeremy Corbyn which has been fed to us in spades by the likes of the Express and Telegraph. A study by the LSE showed that only 11% of newspaper articles bother to accurately state a single one of his actual policies, falling to 0% in the Mail and Express. In terms of property and actual Labour policy as it stands in 2019, if you have rental properties of second homes then yes there could be additional taxes (which i 'm not sure I'd wrong personally). That's it, along with a commitment to increase housebuilding.

I think quite a bit of the criticism of Corbyn as a leader is fair and justified but fed up of living in a world where so much fiction becomes undisputed fact. Will go away now and have a coffee - apologies OP!