To ask about mortgages?

[BFwoes]

Not quite sure how to frame this. We bought in October of 2023, with an interest rate of 4.54%. Our mortgage payment is £2,700 on a £625k house, and we overpay by £600, every month.

Whenever I read posts/comments on here, everyone seems to have a much lower mortgage than us. Did you all buy ages ago, when interest rates were much lower? Do you all have much more inexpensive houses? Or have we missed a trick, somewhere?

I’m not offended, terminally or otherwise.

However the factors which dictate how much a mortgage is are universal

Amount you borrow
The term
Interest rate
LTV

If people are paying significantly less than you they have probably borrowed less at a lower interest rate. Possibly over a longer term.

In a fairly ordinary suburb of SW London prices have increased a lot in the last 6/7 years and interest rates and shot up in the last year so you paying more than many (most) is not surprising, is it?

It’s almost like posting ‘how come some people have a different amount of money from me?’

Exactly. When you live up North and can get a house for less than 150k it’s easy to think someone spending 625k is getting a mansion. I live in the South East and earn over 65k, but can only afford to buy a 2 bed flat. So I’m renting until I can move back up north and buy myself a house for less than 150k! But I’ve had to wait 12yrs to return until my youngest child goes to Uni (split with their dad 12yrs ago). It’s not easy living in expensive areas

You're paying for the area, lots of other people are getting more house for their money because they didn't choose London.

Ouch! 🙁

I don’t think you’ve really understood the question (possibly because I phrased it poorly). I’m fine with the price of our house.

We live in London. We bought our house about 12 years ago. It has tripled in value. Anyone buying in our area in the last few years will probably have a considerably more expensive mortgage than us irrespective of interest rates.

It’s a very normal price around here. We put down 15%. We went for £625K, specifically, as we’re first time buyers and FTB get a stamp duty break up to that amount.

Its down to the purchase price of your house, how much mortgage you have versus equity, and interest rates.
We are in a £450k house and pay £500 a month.
We bought small flat in 2010, with a 10% deposit, for £116k. Our interest rate was very low (it started with a '1').
We did it up and sold that for £155k four years later. We bought the next house for £189k, did it up and sold it three years later for £285k.
We bought the one we're in now for £310k and have again done it up.
So we've climbed the housing ladder by entering it during a time of low interest rates for a low purchase price of £116k (byt it was only a flat) and have barely increased our mortgage, but are now in a £450k house - approx £340k of which is equity.

Our interest rate is lower and I would guess we may have borrowed less. House cost £820k, our mortgage was for £490k at 1.25% and we pay about £1600 ish a month.

How much is your mortgage though? Is it £500k or £100k?

Our mortgage is £900 per month, 2.6%, was £253k. The rest is equity.

Fair enough now you’ve said SW london it seems about right (used to live around there).

I pay 1645 on mortgage of 150k @ 7.25% .. tis a lifetime tracker , 9 years left for full repayment

I dont think you really understood my answer.

Do you all have much more inexpensive house

Yes probably, for the people who didn't choose London. I wasn't suggesting you had an issue with the price of your house.

We were 1st time buyers nearly 6 years ago - and we probably won't buy again.

Bought for 199,000 and currently have a mortgage of £922 a month at 2.66% for 3 more years.

We could only afford a 5% deposit.

Live in a super expensive place - most houses around us are £650,000 + - but in a teeny house.

Please tell me you don’t work in finance!

surely you are able to google average house prices, average mortgage payments and average incomes to understand why your mortgage payment is higher than most people posting on mumsnet.

you must also understand how interest rates have moved in recent years?

OP, wait until you hear that 30-40% of UK housing is bought with cash.

My house was worth 1/10 of yours when I remortgaged around 3 years ago following my divorce. My payment is proportionally lower too, it's how I can afford a house.

Ah, fair enough! My apologies.

Is it really?! toddles off to Google

The fact it’s a “normal price” in your area doesn’t negate the fact many, many people couldn’t afford that. I live in London, I know exactly what normal prices are here. I couldn’t afford £2700 a month or qualify for a 500k+ mortgage so I bought a one bed flat. The reason people have cheaper mortgages is that they have cheaper houses, bigger deposits, financial help, they don’t live in London, they bought in 1982 when houses were 50p. I’m not sure what other secret reasons you think there might be?

I got a 15 year mortgage, fixed for 5 years, in January 2021 and the interest rate is 1.42%.

We will pay as much off as possible when January 2026 rolls around and will also pray that interest rates fall again 😆

Edited to add that I went straight to a high street bank with my mortgage request, couldn't be bothered to find/pay for a mortgage broker.

Sounds like you got a bad deal. Did you have a mortgage broker? Worth investing in next time!

Well, you’ve purchased a house at twice the average cost, and at double the interest rate a lot of people are on so it’s not really rocket science, is it?

(And it’s not sour grapes, I’m paying more than double what you are for my mortgage at a 2% interest rate- very short time left though, thankfully).

Tone deaf

Wow that's good going. I was happy with my 1.9 something for 10 years (the broker recommended 5 years but i overrode it). That was just before the Liz Truss fiasco.
Good for you! 🙌🏻