Am I out of touch with reality?

[Dreamhols]

Basically I can’t work out what’s affordable or maybe I should say acceptable (as in personally acceptable) to pay as a mortgage. Hands up, I’m used to and accustomed to my low rate of 2% meaning my current mortgage is £700 for a 4 bed house. My fix is coming to an end and rates are, well not 2% anymore, so despite being in the 60% LTV bracket payments are, in my eyes, huge.

so I’d like to hear from other people, given our circumstances (which I’ll list below) what they think would be an acceptable amount to pay on a mortgage. Atm I’m having moments of panic and then thinking it will all be ok, and I’m just out of touch with how much people pay on rent/ mortgages and was lucky with such a low cost for so long.

so both dh and I work. Combined income of 95k (before tax) take home after tax and deductions 5.4k. Childcare costs about £800per month. Protection is part of deductions. Energy is £150 a month. Food about £500. No debts. Car owned outright, petrol £100, Netflix and phones £50 a month. Internet £50, council tax £145.

how much would you consider acceptable or ok to pay? What would your ceiling be?

Well it doesn't really matter what anyone else thinks is an acceptable amount to pay, if your mortgage is too high for you to pay or if you think it's unacceptable amount to pay then you'll have to move to a smaller/cheaper house.

So bills are £2k ish with some wiggle room, I'd say mortgage (for me!) max would be £1.5k on that, so then you're at £3.5 overall on bills, leaving almost 2k to half save half spend? That's probably where I'd feel comfortable on that income, wiggle room for any future changes and then when (or if) childcare drops off you'll be able to up spending or saving?

700 a month - dd was being charged that for a room in a house share and she's a postgrad so that was a huge part of her income ( although did include most bills )

Id expect mortgage/rent to be about 25% of take home, although it really depends what you earn - if you earn more you can take it up higher because your other fixed bills like food & energy are likely to be a smaller proportion of your income.

On take home of 5,400 id have thought £1.4k on mortgage is fine.

https://www.landc.co.uk/

Check London and Country, online mortgage broker, for a range of rates from the whole market. I got a decent rate from them previously and will use them again next time we move.

We have, roughly, a similar income and childcare costs. Our mortgage is 35% of take home and we have no other debts. I wouldn't want to go higher tbh.

Energy of 150 is low for a 4 bed house - are you on some kind of price fix thats likely to go up soon?

We’re on a very similar salary and pay the same in childcare costs each month. We pay £1500 a month mortgage and we are comfortable. So that would be my limit in your circumstances.

Our take home is about £6kpcm and our mortgage is £1200 (for a 2 bed terrace) but we overpay so that we actually pay £2.5k pcm.

The idea was this would be a nice buffer pre childcare years and we could drop down to about about £2k when we buy a family house, but for the house we want to buy (a 3 bed semi) looks like we’ll be stuck at least £2.5k pcm forever 😩.

I find that manageable though and we save on top of that both long term and a decent annual budget for holidays.

£700pcm is what people are paying for a room in a house share round here!

It does if I’m being unrealistic or overly cautious because we’re well within our limit on affordability bank wide.

we’ve got an offer for the moment based on draining our savings to bring to the balance but I’m having second thoughts

I pay more than double that and our joint income is £110k ish

Currently have 65% equity and on a 1.2% fix so we’re prepared for a big hike when it ends in 3 years.

I pay more to rent a 3 bed, I earn half what you do.

That’s who we’re with right now, we’ve got an offer based on draining our savings to bring down the balance (still have a 3 month buffer) but pretty much draining) I’m having second thoughts now

I’d sit down with the MSE budget brain spreadsheet and do a really honest budget for yourself then see what’s affordable for the mortgage.

it’s a fix and won’t go up or change until july/ august next year

Ok so it’s looking like £1200 /£1280 to not bring my balance down.

it’s really comforting to know other people pay this and it’s working out ok for them. For me I had 1k in my head as my line in the sand

I'm unsure what/why exactly you're asking. Are you and your OH in disagreement about what is over committing? We can't really help here can we though it's helpful to get an idea of what's 'normal'.
£700pcm sounds exceedingly low for a 4 bed home.id expect thst to double and still feel I was OK. Broke is relative though. A friend said to me once that after she had paid everything she only had £500pcm spending money which seemed fine to me...then I was shocked to learn she'd included huge pension contributions, dental plans, holiday fund, Xmas fund and £200 savings! She still considered herself 'pretty much broke'.
With a mortgaged home I'd whether the storm for a couple of yearscand cut back on luxuries. If after 2 years I had no quality of life I'd consider downsizing.

I think there is some costs missing, don’t you habe insurance, car, buildings, contents for example? Do either of you pay for lunches at work or lunch for your child? What about servicing or mot for your car.

i think id work it out properly and decide what you’re comfortable with.

£700pcm sounds exceedingly low for a 4 bed home

not really. Many parts of the country you can get a 4 bed v cheaply.

How on earth is your energy and council tax that low! We are in a very small 3bed semi and our energy is £200 and council tax £225.

As for mortgage nowadays prices add together all your bills and it will be slightly less so approx £1600.

Same here. apart from we ‘luckily’ managed to go from renting for decades to mortgage a few years ago thinking that might help.

Our income in exactly the same as yours and outgoings similar apart from we don't pay childcare but pay for one car and a loan (about £600 a month in this tal) other car owned outright. Our mortgage has £155k left on it and our monthly mortgage repayments are £900. Rate is 4% overall (we have two products as ported our last mortgage). My line in the sand is 1k. We'd struggle above that I think?

@Tbry it's called living in the north lol. My council tax is £130 a month. Think we are a band C property. Our energy is £90 in summer £180 in winter.

£700 is cheap for a mortgage - I paid that for a 1 bed (nice) flat before I met DH. I'm in 4 bed house with 50% equity. Mortgage was £1100, now £1400 with some equity taken out recently. We earn a bit more.