is this too much for a mortgage

[holidaymama]

Moving house and really pushing ourselves, new mortgage is going to be over £500k, is this crazy or do other people have big mortgages too, ours has always been a lot less than this but approaching 40 and we feel we should go for it!

I think it makes most sense to really push yourselves when you are on a strong career path and can anticipate good income growth in the next 3 years or so. That is most likely to be true in your 20s. It might be true for you in late 30s too, but only you know that. If your incomes have flattened and you'll only get inflationary increases going forward, it can be extremely tough facing a 20 -25 year term of high mortgage payments. Yes, we have amazing interest rates right now and perhaps for the forseeable, but literally just paying back that amount of capital to one day own the house is exhausting. Maybe you have a mortgage exit plan, eg inheritance coming your way. If not, I hope you like working because you'll have to sustain working at your current workrate for a good 20 years or so, depending on the length of your mortgage term, when some of your peers are starting to look for greater work/life balance or early retirement.

As long as you factor in the payments against your take home pay and ensure that if interest rates rise you can afford the new payments

I've been looking at big mortgages in this ballpark recently and I can confirm that the figures given by the OP are plausible enough, though she won't be paying off very much capital at all. Depending on duration, length of fixed term etc. those are almost interest only numbers.

I agree it depends on how much you earn but I also believe it's not as simple as that and depends on your attitude to risk. We have considered moving house and taking out a larger mortgage than we currently have. On paper we can afford it but we're not comfortable with that level of debt and agreed that we'd spend a few more years trying to get our current mortgage down to a level that we'd only need to borrow a similar amount to our last mortgage (i.e. we always borrow a similar amount although the house cost will be much higher).

In these uncertain times how sure are you that your jobs are secure? Could you afford to enjoy life and have enough left to facilitate that? Are you prepared to approach retirement with a pretty high mortgage still?

wish I had this problem...

We took on a £477k mortgage when we were earning £135k which seemed huge, but worth it. I'd say if you can afford the capital repayments month on month and you're in secure jobs then go for it

Yes, it is. I have psychically extracted your salary and industry from your OP.

I wouldn’t be put off by the size of the mortgage. I’d be looking at the term of the mortgage (I wouldn’t go over 25 years), the monthly repayments as a % of your monthly income after tax including the changes after any fixed period is over and the value of the house (are you getting it for a good price, is it definitely going to increase in value each year.) I’d look at good life insurance too so that if one partner dies the mortgage is paid off or a huge chunk of it is, so the surviving partner isn’t forced to sell. It is debt, but it’s a secured debt so if in the future your circumstances radically change you can always sell the house and likely come out of it better off (increase in property price, mortgage payments often cheaper than rent etc).

Fucking pointless thread.

If you are the other half of Lionel Messi then rest assured it will be paid off completely in a week or two!!!

I agree it would boil down to your job security? Can you be sure you won’t be out of a job this time next year OP?

If one of you fell ill could you manage on one salary.

I would only go for a capital repayment mortgage.

The repayments weren't much as I thought they would be. It's not a question of being too much it's whether it's too much for you. Do you have childcare expenses. I don't think it's the best time to be taking on a large mortgage. But only you can decide.

Can you afford it? Can you pay it off before retirement? Is it a good investment

Interesting first post.

Can someone remind me when the Chancellers Autumn statement is due? I reckon he will be putting the focus on huge mortgages, maybe introducing a variable increased interest rate on mortgages over £450000, on the grounds that if you can afford that you have a few pips left to squeeze. What do the rest of you MN financial whizzes think?

I wouldn’t be able to sleep with a mortgage that size. It’s pointless asking other people though as it’s all relative to what you can afford I suppose if you’re in London it’s probably tiny. For me it’s important to be able to afford to live a nice lifestyle. It’s pointless having a lovely house if you end up being a prisoner in it because you can’t afford to do anything. Best of luck.

@Butchyrestingface

I preferred it when stealth boast threads actually involved a bit of actual stealth. 🙄

This.

Depends on total household income and security of jobs.

Personally I think for most middle class families to take on that debt at 40 isn't wise. Things happen, people get sick. There are some insurances you can get, but they alone can be very expensive, friends with a 550 mortgage pay over 1k a month in insurances in case of death or critical illness of one or both of them as they know they couldn't keep going on one salary.

Think careful. Why do you want so much of a house? Obviously there are regional differences and if you are trying to buy a 2/3 bed terrace in London it's different to a big country pad elsewhere. Would you be willing to either have a bit less of a house or move to a nearby area where a similar house may be 100k+ less? There are huge variations within 5-10 mile radius based on transit links, schools, prestige etc.

I will say friends who are consultants took on a mortgage of that size on a stunning property. She got cancer within a year of moving in and while she's recovered really well, the financial stress of having to rush back to work she says was the hardest part of her recovery. They couldn't keep house going with school fees without two full time wages. Something to ponder.

Obviously nobody can answer this OP, until you disclose your incomings and outgoings.

I think if you can't understand that no-one can answer this for you as we don't know your income/ budget/ security or situation, etc., then no you shouldn't.

Hate threads like this where the OP Doesn’t come back with essential details.

😶

I always think it's a good idea if you are a couple to try and ensure that if one of you lost your job, the other salary should cover bills and mortgage and food as a minimum.