What % of your income is your mortgage?

[DeerMyDear]

I realised I have no idea what other people do. For transparency, ours is 10% (household income £5000, mortgage £500. But think we might move house and up the % but then that feels scary. But maybe I’m being a wuss.

Just interested in what others do x

You don’t need to add the arrangement fee to the loan either. Unless you are overpaying significant amounts every month (like, paying of 25 year mortgage in 10 years or less) I think for most people investing is likely to provide better returns over the period. I’d certainly always recommend pension contributions at least to the amount your employer will match, over overpaying the mortgage.

@SmorgasBorb

How are all of these so low? I actually thought 70% of my income/50% of joint was actually pretty good!

We still manage to live very nicely and save around £3000 a month despite the huge mortgage.

Cannot get my head around the maths on this, seems like such a huge risk. What if one of you loses your job?

[quote FTEngineerM]@Quincythequince you have access to Google, right? Don’t tick the filter for ‘only show no fees’ on comparison sites though because some are £17 like HSBC (1.76%@

@PattyPan

You don’t need to add the arrangement fee to the loan either. Unless you are overpaying significant amounts every month (like, paying of 25 year mortgage in 10 years or less) I think for most people investing is likely to provide better returns over the period. I’d certainly always recommend pension contributions at least to the amount your employer will match, over overpaying the mortgage.

I agree completely re pensions.

I think people are forgetting what the median household income is in the UK.

And yes investing is good, but S&S can (and do) go down as well as up!

House prices can too, but you need to live somewhere and will always need a home!

I get what you’re saying but your advice will be applicable to a very small percentage of people with mortgages!

@felulageller

I'm amazed how low these are!!

Mines been 45% and I think anything under 35% is very affordable.

What are people spending the rest of their money on??

Surely paying off the mortgage is the top priority in spending?

Ours is low because we are 17 years into paying it off. It was a much higher percentage when we first got a mortgage but we've paid a lot off and our wages have risen considerably over the same time period.

We save a lot and put a lot into pensions and have a comfortable life with the rest.

@Quincythequince you will always need a home but you’ll have that whether you overpay or not, as repossessions are rare. And unless you downsize or remortgage you have no way of accessing housing wealth. So it’s good to diversify rather than throwing everything at the house. Plus house prices go down too. We bought our house for less than our vendor bought it for.

If you can’t pay your mortgage, a repossession is very likely patty! Where do you live?

There are too many ifs in your advice for it to be broadly applicable.

Your advice is fine, if you earn well and have a lot of spare cash, otherwise it’s dubious.

Plenty of people do downsize and the point being is that if you aren’t paying a mortgage for 25 years, and only paying it for 15 instead, you save a lot of interest!

A lot!

What kind of base investment would you need to have to make that same amount in the markets for? I’m sure you’ll have a calculation ready, I can’t wait to see it.

But paying a mortgage off over 25 years (or more as is the case nowadays) has more downfalls than paying it off earlier, if you can avoid it!

@felulageller

I'm amazed how low these are!!

Mines been 45% and I think anything under 35% is very affordable.

What are people spending the rest of their money on??

Surely paying off the mortgage is the top priority in spending?

Paying the mortgage is A priority but not a top priority for us.

We deliberately bought a cheap house with a low mortgage so that we could easily afford repayments (and our other needs like bills) and still have a good quality of life without having to compromise on our wants.

Ours is less than 10% of our joint income. We earn 3-4k per month (varies as we're self employed) between us and the mortgage is just over £300.

We spent probably £400 on general household bills, £500 on food/household stuff for us and four animals, then we have 2x car insurance, 2x phone bills, 4x pet insurance, 2x private pensions...it all adds up.

We have a good amount left each month though and that goes to general savings (for things like MOT, a new washing machine etc.) and the rest is for us to do what we like with. Some will go to personal savings, some will get spent on "stuff", some goes towards a holiday or meals out or hobbies.

I'd rather enjoy my life now than focus on paying off my mortgage super early - especially when our payments are so affordable.

Ours is about 20-25% but we're overpaying and hope to be paid off in 8-10 years (we're early 40s).

They have 95% LTV mortgage schemes now

In 2006 my friend got a 110% mortgage on a flat in Edinburgh and used the 10% to do it up!

25% of take home pay. This doesn't include our dividends as that can vary.

@ToykotoLosAngeles

They have 95% LTV mortgage schemes now

In 2006 my friend got a 110% mortgage on a flat in Edinburgh and used the 10% to do it up!

My first property - a one bed flat was on a 110% mortgage which paid for all my furniture. That was in 2000.

About 45% at the moment but we do have a very long term fix so it won’t go up any time soon…

Ours is 30% with overpayment, 20% without. We've gotten used to paying the overpayment now so hope to keep it up and get the mortgage paid off sooner rather than later. We can still afford to do what we want to do, we don't really have expensive hobbies:tastes and I'm a bit of a natural spendthrift.

@ToykotoLosAngeles

They have 95% LTV mortgage schemes now

In 2006 my friend got a 110% mortgage on a flat in Edinburgh and used the 10% to do it up!

I remember them. Crazy really. Never had one, but my goodness borrowing more than the value of the home in a very volatile market is a risk indeed. Weren’t these mortgages and other seriously ill-thought out practices, partially why Northern Rock went under?

10%.

@felulageller

I'm amazed how low these are!!

Mines been 45% and I think anything under 35% is very affordable.

What are people spending the rest of their money on??

Surely paying off the mortgage is the top priority in spending?

Single income of £1600 ish after tax/pension/NI Mortgage is £385 So £1200 left for council tax, house repairs, water, gas, electric, food, Netflix, fuel, car insurance, car tax, service/MOT, content insurance, cat insurance, cat food, denplan... nothing left to overpay with!

30% of gross earnings and am single parent household

About 50%

About 20% on a full time & part time wage, but we're overpaying so that mortgage paid off in about 2 years, a few years ahead of my husband retiring.

Around 30-35% but we live in Holland and the house prices are insane.

I wish we had a mortgage.
Ours is renting and is 52% of dh take home pay. It's bloody hard. Rent here is extortionate. And this is in average £100 a month less than similar properties as it needed work. Which the landlord has done now

25%

Just under 20% of our joint income. We got it at the low interest rate end of last year at 0.9% fixed for 5 years.

For those wanting the maths on my mortgage which is 70% my income 50% of joint. Firstly we don't live in the UK and we rented for many many years. Houses here are extortionately priced and our lending was £1m at 90% LVR. Our mortgage is broadly the same monthly outlay as our rent used to be...
Joint income is around £8500pm net
Mortgage is £4500 per month (30 years, only 29 to go)
We get income of £1800 pm Airbnbing a portion of it, this gets saved and will be paid to mortgage as a lump sum at end of the year after we have paid the tax due on it.
£1000 -£2000 for bills, food etc. The rest (£2000/3000) is saved and will either be lump sum paid into mortgage or used for home improvements.
Mortgage lenders had no problem with the affordability.