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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask what % of income you pay on your mortgage?

112 replies

ErinAndTonic · 08/04/2022 09:29

Particularly dual income homes who can still afford holidays each year. Currently we have a smallish mortgage and I only pay 10% of my income on it, my partner earns more so covers the rest and all bills etc.

We're considering moving to a bigger house and our mortgage would treble. He can afford his portion and with my recent pay rise I would pay a third while he pays two thirds and the bills etc (he earns significantly more than me). At the moment we have several holidays per year and I'm trying to figure out what the average people are paying mortgage wise against their salaries whilst still affording holidays.

We tend to do two long haul trips a year and two short haul for example. We don't have to budget at the moment but would need to be a bit more careful if we moved, which I'm looking at but thought I'd ask here too. We don't have children so there are no nursery fees, childcare expenses etc to worry about so that does give us more disposable income. This house is incredible but I don't want to be bogged down in bills so that we can't enjoy our lives anymore, especially after the past few years!

OP posts:
Original poster
ErinAndTonic · 08/04/2022 12:05

Also for context we are early thirties so don't have a ton of equity behind us, the 100k profit for this house will be less once the hefty stamp duty cuts into it too.

OP posts:
whoatealltheeggs · 08/04/2022 12:19

On paper it looks affordable

whoatealltheeggs · 08/04/2022 12:20

don't rely on a BTL to make lots of equity in a short time period plus you will have to pay capital gains.

AlexandraPeppernose · 08/04/2022 12:25

27% and we find this difficult with all the other costs of living

whoatealltheeggs · 08/04/2022 12:27

you have 6k coming in (after pensions), 1.9k is fine particularly with no dc.

TheSpanishApartment · 08/04/2022 12:28

23% of joint after tax income. We can still afford holidays at the moment. Normally one abroad and 2 UK a year. But the UK ones are cheap!

Original poster
ErinAndTonic · 08/04/2022 12:29

Yeah it'll be around £6400 combined with my latest pay rise but should be over £7k once I complete my training.

I think it's achievable and don't see the need for spending on things like clothes and alcohol, I have plenty of that at home but I would still like to afford experiences so trips, meals out and activities etc.

OP posts:
CrowAndABut · 08/04/2022 12:29

12.5% after tax. Single income.

Moody123 · 08/04/2022 12:35

We pay around 25% after tax

Myownpapillon · 08/04/2022 12:37

Dual income, 15% before tax

whoatealltheeggs · 08/04/2022 12:53

@ErinAndTonic I think that's plenty. Just fix for a bit, save what you can & ideally buy something that is future proofed so you don't have to sell at a bad time.

NoSquirrels · 08/04/2022 12:54

@ErinAndTonic

Also for context we are early thirties so don't have a ton of equity behind us, the 100k profit for this house will be less once the hefty stamp duty cuts into it too.
Might you plan children in the next 10 years? If so, think extremely carefully if a £1,900pcm mortgage is a good idea.

To be honest, if I wasn’t married to my partner I wouldn’t want a joint mortgage of that commitment. I’d rather the BTL plan and keep that in my name.

Mushrooms0up · 08/04/2022 12:58

20% of net on mortgage. We also budget 8% for holidays which gives us a healthy budget for a few trips each year

NoSquirrels · 08/04/2022 13:00

Sorry, just seen you don’t plan children.

Why won’t you be paying household bills, though? In your scenario I’d think you should both be contributing relative to your incomes so if DP earns 2x what you do then you pay proportionately to that.

If your DP is happy with the split though guess that’s good for you!

Mouldyfeet · 08/04/2022 13:00

Sole income and its 40%!

It's shit and I have to work loads of overtime to pay for any fun stuff. When my fixed term ends next year I expect it will more like 50%.

Original poster
ErinAndTonic · 08/04/2022 13:08

My partner would cover all household bills but I would cover all of my own bills ie phone bill, food shopping, gym membership and i'd probably pay for us to have a cleaner.

Then once I get my pay up above 40k I'd contribute either further into the mortgage or against the bills.

OP posts:
NoSquirrels · 08/04/2022 13:12

@ErinAndTonic

My partner would cover all household bills but I would cover all of my own bills ie phone bill, food shopping, gym membership and i'd probably pay for us to have a cleaner.

Then once I get my pay up above 40k I'd contribute either further into the mortgage or against the bills.

Like I say, good for you if your DP is OK with that.

I suppose I’m just coming from the perspective that if it was me in the higher-earning person’s position, I wouldn’t be happy with that as household bills are unavoidable and a big chunk of living expenses. I’d rather subsidise holidays and discretionary spending.

And from my POV if I was the lower earner I’d expect to pay household bills for my own sake.

But you’ll be better off the way you’re doing it if everyone is happy so crack on.

gwenneh · 08/04/2022 13:16

14% of our post-tax (dual) income.

LaWench · 08/04/2022 13:36

10% of joint income after tax. We could have traded up and stretched our finances but we are very cautious after a previous redundancy to ensure that either one of us could pay the bills should the worst happen.

Original poster
ErinAndTonic · 08/04/2022 15:53

That is a good point, redundancy would mean we were in a sticky spot I'd imagine. We would both get a healthy payout but there would be more pressure to find something sooner Vs in this house where my contribution is so minimal that it wouldn't be too noticeable to him if i was out of work for a short while. He is lucky that his redundancy package would likely clear our mortgage so it's a good barrier for him.

Agree with what others say re. The bills, I have asked before if he would want me to contribute more to our living expenses in general but he's always said he is comfortable as we are, and means I have the disposable income for holidays etc. i do spend a lot of my money in the interiors for the house, furniture, cleaner, garden furniture, general sprucing etc so I do spend on us not just myself. But equally so does he, he covered half my share of the Maldives trip for example.

Once I earn more it will balance out fairer, but we have been together almost 17 years and has been working for both of us with us sharing similar level of disposable income.

Another option is for us to stay put and convert our loft and extend. We already had a large kitchen extension when we moved in, but converting the loft would give me an office (one of the main issues I have is working and then subsequently trying to relax in essentially the same room!)

It's not like we need more space for the two of us anyway, some things are just nice to haves Vs essential.

OP posts:
Winenight · 09/04/2022 07:56

We have a similar income to you. I only work pt but we have some income from BTLs. However I wouldn’t recommend the BTL route. IMO the returns aren’t worth the risk & tying up masses of capital. The government squeezes every last drop out of private landlords, and then adds in new taxation and regulations. Once we’re able to get a reasonable price for ours we will sell. Any surplus we save we will put in a S&S isa- probably index tracker funds.

In basic figures, our mortgage repayments cost £850 a month. Childcare for 3 children is a bit more, maybe £900-£1000. (That will go down in time). Then we have food shopping, bills, clothes for the kids, fuel & insurance for the cars and so on. We own our cars outright and have no credit card debt or personal loans. Holidays are just a few nights away in a cottage a few times a year. I would guess that we save around £1500 a month between us - I’m going to monitor this going forward as we’re also looking at moving up in the future.

However, unless an absolutely amazing and unmissable house comes on the market we’re not going to buy at the moment. House prices are bubbling, the market is crazy and there’s a looming threat of interest rate rises and inflation. So worst case scenario is you overpay for a house and then your mortgage payments increase, just as everything else gets more expensive. I should caveat that I don’t own a crystal ball and prices may keep on rising!

So the questions I suppose to ask yourself are- can you withstand interest rate rises on your new mortgage payments? Have you savings or investments you can draw on if the worst happens? Will you regret overpaying now if prices fall in the future? Will you regret not buying now if they continue to rise? Do you have to increase your mortgage by so much or is there a cheaper house option? How old are you, and how long do you want to be paying a mortgage for? What pay increases are you expecting?

Good luck with deciding!

Cultureclub · 09/04/2022 08:14

I've always been happy with around 20% although I went from only about 8% until I built an extension.
Car finance and fuelling has become shockingly expensive and when multiplied for two cars has really started to impact.
Both our cars are paid for at present but if we were to enter new finance arrangements in the next few years the percentage costs would certainly pact how high we could go on the mortgage.

Onlyrainbows · 09/04/2022 08:26

10% before tax, 15% after tax. 5 bedroom house. One high earner, one average earner

hamstersarse · 09/04/2022 08:29

I pay 10% of my income, single earner house

MissyB1 · 09/04/2022 08:31

After tax 30% of our dual income. And school fees for our ds on top of that 😱