To think we could manage a £2200 mortgage payment

[Dyr]

on a take home pay of £4k.
After purchasing the house we would have £40k - £50k left in savings / investments.
The repayments would be about £2.2k per month but our combined take home would be £4k, and due to the jobs we are in its unlikely to increase. late 30s/early40s with 2 kids (primary school age)

I'm not sure why anyone would do this to themselves.

More than 50% of your take home and unlikely to get big pay rises sounds unbelievably tight to me. I've been lucky enough to never pay a third more then but it's not been easy.

Have you seen a property? How long would you be paying that for? Personally I'd feel sick about it. Of my mortgage was more than 50 per cent of my income I'd struggle.

This is what the mortgage broker said we could get, i don't have a decision in principle yet

What is the loan amount and the loan to value %?

No bank or building society would give you that kind of mortgage. You would never pass the affordability check bit I think you already know this.

No way, over half your income?

For reference we bring in around 3500 at the moment as we are starting a business, and out mortgage is £635ish which we round up to £700. I wouldn't feel comfortable choosing to pay more unless we had to.

To be fait if they both own 38k thats a combined income of 76k.

X 4.5 is £342k

At 4.5 percent thats £1922 pcm

At
6 % thats 2.2k so could be possible on paper.

Pretty silly idea to max out atm.

Rates look like they are going closer to topping out, but still might have a few % further to go.

Then we have the possibility of a second wave of inflation.

You need to have plenty of contingency at the moment. Not to mention that house prices at the moment are not reflecting rates, there's a lag as the market will catch up and prices drop. It's happening slowly atm but a few more months should start to see real changes imo. Buying now at near max prices and leveraged up with a massive mortgage the probability for negative equity is high.

But the rainy day would be every month because you would be scraping to make ends meet.
You'd be better having less savings and a lower monthly mortgage. Savings are no good if you are up to your eyes in debt

I don't think that will pass affordability checks.

How much are you proposing to borrow and what are your salaries? The usual maximum income multiple is around 4x salary. There might be specialists that go beyond that, but the rate is usually higher, making it even less affordable.

But you say you want to 'keep some aside for a rainy day', £40/50k is rather a lot for that purpose. What do the numbers look like if you keep back £10k and put the rest into the house purchase, so you borrow less and your mortgage is lower?

Fair earn! Typos!

We have a take home of £7k and I am stressing that our mortgage is about to go up to £1,700. I would be very anxious of over half of my money going on a mortgage. You have £1,800 left to pay council tax, gas and elec, water, phones, cars, petrol, clothes, holidays, emergencies. You will soon start to eat in to your savings, especially with no payrises.

I think having £1800 a month for food and bills is doable and is more than a lot of people have.

That being said, is £2.2k a fixed rate until the end of the term? If not, what happens if rates go up? You also have no resilience if one of you loses your job.

Unless the term is really short, I think it's a risky choice.

I'd keep £10k max in savings as an emergency fund, put the rest towards the house, extend the term to as long as you can (reduce it later when DC are older) to reduce the monthly payments to less than 40% of your take-home.
£2k+ a month I'd want to be taking home £6k+

DH and I are looking at getting a mortgage next year with £4.5-5k take home and my absolute maximum mortgage payment would be £1600 as I know the rest of our expenses are about £3k if we count absolutely everything (Annual costs, birthdays, Christmas, holiday etc).

Wow. Maybe it is 'affordable'.

I suppose a lot of it depends on what your other costs are. If you don't have a car, live close to work and school and don't have high expectations about spending on food, hobbies, holidays etc, it might be OK. Otherwise, you're going to find yourself struggling to cover the cost of all your other costs as well as the mortgage taking over half your income.

There's no way you'd get a mortgage for that amount on your low income and you wouldn't cope with it either especially not with 2 dependents.
What has your age got to do with pay increase? You're on a low (ish) income so if your line of work isn't paying well then you need to change jobs. It's never too late to increase your income.

No, it's too risky IMO.
We also have about £4k take home between us and a mortgage of £1,300 and I feel we're over stretched. Admittedly at the moment we have £900 a month in nursery fees too,but when that drops next year we'll need to up our pensions and other savings to accommodate of lost early child years.
It's hard out there! Be very careful.
If it's the perfect house (and a forever home) can you borrow over a longer term and then choose to overpay a little instead, but keep more of your money liquid. Also means you can stop overpaying if times get too tough.

Why do you need £50k in savings? Surely keep back £10k pay £40k more off the house and then start saving again.

Without dipping into savings, not taking holidays, growing all your own food (go vegetarian or vegan), no new clothes, jewellery, make up, use basic and cheap toiletries, cut your own hair, no cinema, theatre or any other paid entry entertainment, no takeaways or dining out....

You might be able to live off it but realistically it's a big fat NO.

They might have a relatively low loan to value, or a short term mortgage due to older age. Lots of possibilities.

We've got a combined income of about £5.5k/month and a new mortgage that's increased from £923/month to £1300/month and we're okay but it'll be a squeeze until we pay off debts and my husband gets his guaranteed pay increase in Feb time. We've also got one soon to be in nursery so personally I think it's pushing it a bit!!

I think it would be difficult, but just about doable while your children are young, as long as you have a fairly basic lifestyle - no holidays, not much going out, low food costs, no car loans etc. People survive on less disposable income after all.

But as your children grow, so will the costs. Teenagers can be massively expensive. Clothes cost more, shoes, pocket money, clubs, phones, and just the sheer amount of food they can eat (it's staggering how much bigger our food bill is now the kids are teens).

I'd be very uncomfortable with this size of mortgage. I'd rather live in a smaller house with a better lifestyle, than be having to penny pinch every month to live with such a large mortgage. And what if interest rates go up again? You've got no contingency if your wages are unlikely to go up.

My rule has always been that I wanted us to be able to just about scrape by affording the mortgage on one salary if we had to.

That way we have always had plenty of headroom to enjoy life and have savings, and the comfort that if one of us lost our job or was ill for a prolonged time (we do get v good public sector sick pay) then we would still be ok even if it wasn't much fun

Paying that sort of proportion of your income on mortgage alone (the broker is trying to get your business, of course they're going to try and tempt you with 'you can get a bigger house if you do business with me') would mean that the rainy day would be more of a monsoon season very quickly.