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Original poster

To think we could manage a £2200 mortgage payment

388 replies

Dyr · 03/08/2023 09:58

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)

OP posts:
BreehyHinnyBrinnyHoohyHah · 03/08/2023 11:42

We did a mortgage renewal recently and were told that the calculation for a family like us, two adults, two primary DC, is £1800 a month needed for all living expenses after the mortgage cost. So that is all bills, all food, insurances, clothes etc etc.

So you would have very little to spare, and if something breaks or someone gets ill and can't work etc then you be in trouble.

Tahitiansummer · 03/08/2023 11:43

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

This post should tell you all you need to know- it would be madness. You're both on low incomes with no prospects of any meaningful increases and you'll be up to your neck in debt for years.

MotherEarthisaTerf · 03/08/2023 11:43

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

This is far too narrow and you're definitely going to use your rainy day fund. The less LTV you have in your mortgage the more interest you're paying off each month.

Can you extend the length of the mortgage? I would consider 20k in savings and seeing how adding £30k to your deposit improves monthly payments.

DeedlessIndeed · 03/08/2023 11:44

£63 left... is this after savings/holiday/xmas and birthdays/ haircuts/ dental/ days out with kids etc?

I guess regardless, I think you'll be so stressed regarding any small potential increase which could so easily wipe out your £63 surplus, that however nice your new home was, you'd be miserable. I'd really advise against this.

mummymeister · 03/08/2023 11:44

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

so, no holidays, no days out? what about birthdays, weddings, visiting friends and family, what happens when the cooker breaks and the fridge at the same time. seriously, its bonkers to be even thinking that this is a good idea. buy a smaller house or buy in a cheaper area but dont sell your tomorrows for the sake of bricks and mortar. just not worth it. do your think your kids will remember the kind of naice house they lived in or the things that you did together

TogetherInEclecticDreams · 03/08/2023 11:45

This has to be a windup. £63 a month left over?

Onlyonedog · 03/08/2023 11:45

bubbleaf · 03/08/2023 11:41

People saying it’s too much … where do you think you can rent for less than 1k a month for two adults and two children?

Newsflash, you can’t. 1k is actually cheap for a two child family in the rental market. Other people cope and if OP wants the house she should have it. It’s tight but doable.

But OP is taking about £2200 not £1k. £1k would be fine, can't imagine anyone saying otherwise.

ivykaty44 · 03/08/2023 11:45

but thats "keeping savings for a rain day" is going to cost you money, can you make as much on compound interest on the £50,000 which is going to cost £50k in extra repayments on a mortgage

If you put the money in a high interest account 6% and don't touch it until you have a raining day - then you'd see a return of 356% of 25 years and by year 25 you'd have £223000 - that'd take you until you were 63 ish

Obviously if you did have a rain day and touched the money, then that figure would change.

By year 6 the £50k would be earning in interest the same as the difference between placing the extra £50k down on your mortgage/house - so if you were struggling you could use the interest to pay the interest. By year 25 you'd be seeing £13000, or £1,083 per month in interest payments

Alternatively you could pay the £50k down on the mortgage and you'd save £50k and if you put the £337 (thats the figure on a £50k loan at 6.5 %) into a high interest savings account for 25 years you'd have a £235000 a return of 346%
by year 9 you'd have £48000

By paying the £50k down and saving the extra mortgage repayments you'd make an extra £55k which is £2,200 a year with the added bonus of having £337 cheaper/lower mortgage repayments

EnterFunnyNameHere · 03/08/2023 11:45

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

That would be swallowed up almost immediately by any one bill changing! Unless that already allows for a lot of discretionary spending I think you'd be taking a hell of a risk.

How long could you fix at that repayment level, and what is the likely (conservative) salary increase over the same time period? If you are able to fix for a reasonably length and at 99% sure of reasonable pay rises across the same time period, then it's a hard maybe. I'd probably be too risk averse to ever have mortgage > 2x income though.

wonderstuff · 03/08/2023 11:49

If interest rates go up, which they are likely to today you’ll be stuffed. I’d be looking for far more wriggle room.

ThinWomansBrain · 03/08/2023 11:49

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

You're aware that interest rates can increase?

Just because someone on commission says that's what you could borrow (which as others have said, sounds doubtful), doesn't mean you have to.
What's the least you can borrow to get somewhere liveable?
Personally I wouldn't keep as much in savings - saying you need that much 'just in case' makes it sound as if you're risk averse, so considering going ahead with a monthly margin of £63 sounds bonkers.
What do you pay in rent currently?

Boomboom22 · 03/08/2023 11:50

It would be mad if you kept 50k savings, put at least 40 of that in and then overpay just a little maybe up to 2.2k and you'll save years of the mortgage instead which would be more than any interest in savings. Try the money supermarket overpayment calculator.

ihadamarveloustime · 03/08/2023 11:50

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

Madness.

Prices and insurance rates are going up everywhere, not down. And one broken appliance, broken car, school trip that everyone else is going on ... you'll be burning through your current savings funding these things.

Alwayswonderedwhy · 03/08/2023 11:51

I think you're crazy to consider it. None of my business but I don't understand how you even got offered a mortgage for that amount.
How will you pay the council tax bills etc? I think you'll find your savings soon start to dwindle.

MontyDontysLinenTrousers · 03/08/2023 11:53

Dyr · 03/08/2023 11:11

I've done a budget calculator, and excluding the mortgage our total expenses would have £63 quid left over each month.

I think you’re posting in hopes of getting people to reply saying that your proposed mortgage is fine, but it’s not.

Leaving just £63/month is insane.

You have zero buffer if interest rates rise, if council tax goes up, or any utilities. A parking find would put you into the red for the month. You’d have no ability to save, and no fun money.

Don’t do this, it’s a crazy thing to consider.

madamovaries · 03/08/2023 11:54

I did roughly this (as a proportion of my take home pay) when I was single and had bought a flat. But kids are really expensive and money was v tight just for me. Think it would be so hard with kids.

Zanatdy · 03/08/2023 11:54

No way too much

Zanatdy · 03/08/2023 11:56

Superher · 03/08/2023 10:00

Also, with a take home of £4000 pm then how on earth can you get such a big mortgage that the repayments are £2200?

I earn 61k - just me and I can borrow 283k and repayments are similar. I wouldn’t as it’s too much, 240k and my deposit will have to be max but in SE that doesn’t buy me much

oatmilk4breakfast · 03/08/2023 11:59

That doesn’t sound reasonable to me. I wouldn’t overstretch like that. It’s more than half your income!

fortheloveofflowers · 03/08/2023 11:59

My take home including CM and overtime is around £4k and a mortgage of £1000 and loans of £450.

I have to really watch where my money goes to be able to save any for fun stuff, school trips and cheap holidays.
That is just me and my DS.

You would be insane to take a mortgage on of this amount.

Crikeyalmighty · 03/08/2023 12:00

My own view is to be relatively comfortable as a couple/family you need £2500k a month after housing expenses but before bills, credit committments (unless you have enormous ones, food etc. maybe £1500 if single. Less than that, then it gets very tight indeed.

Newname211 · 03/08/2023 12:01

bubbleaf · 03/08/2023 11:41

People saying it’s too much … where do you think you can rent for less than 1k a month for two adults and two children?

Newsflash, you can’t. 1k is actually cheap for a two child family in the rental market. Other people cope and if OP wants the house she should have it. It’s tight but doable.

You absolutely can 😂

3 bed semi/terraced housing is widely available for £800-£900 where I am.

Plus children can share rooms so two bed would be doable.

arlequin · 03/08/2023 12:03

Our take home pay is 7.5k and our mortgage is 2.55k. It's a real struggle!

ifonly4 · 03/08/2023 12:04

Unless you know you can cut back a lot (ie at the moment you just spend what you want on food, heating, clothes, car, expensive holiday), I wouldn't risk leaving us with £63pm. If mortgage rates are higher in time, living costs go up, one of you can't work, you're stuffed.

Another thing I'd be looking at, is do you really need to take a mortgage out that high to buy a family home.

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