To think we can manage this mortgage

[Whistlere]

House: 490k
Mortgage: 290k - 5 yr fixed at 3.86%
Net pay: 3400 per month
Mortgage monthly repayment: 1500

Savings: 90k
ISA stocks and shares: £60k

Looking to overpay the mortgage by 10% a year.

Early 40s with 2 kids in primary school.

I know it’s not sensible but I think it’s manageable, although I am worried what will happen if one of us loses their job.

I think it’s ok - presumably if the shit hit the fan you’d use your savings to pay half your mortgage off and lower the payment?

Would you actually qualify for a mortgage that size?

£3400 suggests you earn around £50k, so nearly 6 times joint income.

How about putting most of the £90k at the start and taking out a smaller mortgage.

Without your savings as a safety net, it would worry me.

If you are accustomed to budgeting it should be doable, I think.

I'm surprised that would pass affordability tbh. I think that is pretty tight.

Yes, we hope to exchange very soon….
We have both overpaying into our pensions and the bank took our gross salary when deciding the mortgage.

nope. We earn £6k a month and £1800 a month is just about ok.

That is what I should have done but it’s too late now. We’ll try and make as many of the repayments as early as possible

I would use 50k of savings and take out a smaller mortgage.

I wouldn’t be happy with that, no. Our take home is over £2k more than yours, our mortgage is about the same and I think it’s a lot.

Missed that you had £90k in savings! Why not put some of that towards the deposit?!

I think you should use half your savings as a deposit and lower your mortgage costs. £1500+ a month just on the mortgage sounds insane to me.

I don’t really understand why you’d take out such a big mortgage with all those savings. What are the savings for?

I think that will be tight and you’ll regularly dip into your savings to live comfortably. Are your salaries likely to increase much?

Agree with others about using a chunk of your savings to bring your mortgage down if poss.

You can probably overpay 10 or 20% a year so do the first overpayment the day after completion,

DH thought we’d be better off saving and investing the £90k.

It's 44% of your gross pay. The recommendation is 33% max.

Are your savings set aside for a reason?

If it were me, I would put £60k of the savings into the mortgage which would bring the repayments to just under £1.2k.

Then it would be more manageable and ceasing the pension overpayment would be the back up plan rather than the savings if needed.

Our rate is 3.86% and we thought we’d be better off saving or investing the money.

Your mortgage costs are nearly 50% of your take home pay. Are you really going to have much left over once you've paid all your bills and essentials? It sounds very, very tight.

Too much for me.

As long as you are happy to use some savings to subsidise living/mortgage payments until salaries increase id say it's fine / totally doable.

But I think the idea a family of four will pay bills insurance food and live well on less than 2k pm is very optimistic.

where are you getting the 3.86% rate please?

I think it’s really tight on that income, and surprised they are willing to lend - how much is gross pay?

any significant childcare costs on top would make it a no from me

I would say that's the best LTV you'll get (no benefit over less than 40%). Time to work out whether your £90k will earn you more in savings than on a lower mortgage. It will be tight on that interest rate but manageable.

We have significant savings and have in a higher interest account (5% plus, some stocks and shares investments have yielded 20% last year) as compared with 2% interest we pay on the 10 year fixed mortgage.

Some IFAs will advise interest only mortgages with payments in investments overseas (think it's called an Offset mortgage).

Best thing to do is speak to someone qualified.

Would using some savings put you in a better LTV situation?

I would use some of the 90k savings to reduce the mortgage. You still have 60k in stocks and shares.

I would probably use about 60K of it towards the mortgage and keep the rest incase of emergencies.

What length of term have they offered you, we moved around our 40's with a 200K mortgage and they insisted we take a 27 year mortgage not 25. I wasn't all that happy with it but they wouldn't give it to us otherwise. We are saving to have a lump sum to pay it off, and yes our investment is earning more then we would save on just overpaying.

We wouldn’t get a better rate than this so we didn’t think it was worth putting more towards the mortgage.