To think we CAN live on the mortgage

[JaneEyre40]

Advice please -

Couple - Earn £10,500 a month
Mortgage - 3,700 a month
Nursery - 1,000 a month

Considering all other possible outgoings, do you think we can afford this and not feel pressured each month. What am I not considering? We've done the spreadsheet but I'm still unsure.

We will have about £65,000 in savings at the beginning of this venture.

Thanks in advance. House of a lifetime.

Croydon? I worked there for many years and a friend is a social worker there currently. I agree, I didn't think they would give a shit about my complaint (Lambeth).

That must have been bloody hard. Having just had a child, I constantly think about how hard it must be for single parents, it's hard enough whilst having a partner. You are responding with your life experiences which I appreciate but Judy because I earn a certain salary (right now) doesn't mean I don't have some life experiences of my own.

Agreed

I'm not sure why I added that to be honest, I guess to give a view of outgoings (not too much on food/wine on the other hand.....)

You are exactly right. My OH corrected me, we can over pay up to 80k a year (not bloody likely but good to know the option is there).

You aren’t including interest payments in that calculation…

Sorry, haven't read whole thread, but with those figures I'm assuming house is in region of 1.1-1.2 million?
I would double check the council tax, ours is about 350 a month on a property worth around 750k.

I'm also interested in what public sector role brings in 5k net? That must be significantly over 100k.
Many public sector roles aren't as safe as they used to be anymore, there are significant cuts coming to counterbalance public sector payrises without any actual additional spending.
Do you have life insurance, income protection etc? As I think you would struggle to cover those costs on 1 salary.

Also, opinions may change on schooling once actually in state system, huge cuts are creating significant issues, as a school governor at my daughters school (state primary) I'm shocked to see the deterioration even within the last 12 months. I was very firmly in state camp, but the state system is really struggling for multiple reasons, through no fault of the teachers. Im going full time and potentially moving into private sector from nhs in preparation for potentially paying private fees if either child fails 11+, and the savings for our extension are now in high interest amount for this.

When the mortgage is so large, I like the safety blanket of the longer term bringing monthly payments down in case someone loses a job. Do make sure you set the overpayments up as a dd though x

One or both are going to need a 2nd job i just cannot see how you will manage ! Looks like sacrifices will need to be made drop the avocado toast , daily Starbucks and I'm afraid those louboutin shoes and matching clutch will have to wait then you may just scrape by 🙄

Sheep

@JaneEyre40 I like you more, the more you post.

A quick look at historic rates (prior to the low since 2008 crash):

If the rate goes up here is roughly what you would be repaying on 30 year for 700k:

5% : 3757
6% : 4196
7% : 4657
8% : 5136
9% : 5632
10% : 6143

These scenarios are possible (!) although they may not seem it due to recent history - so it's worth thinking about it
Also how you would manage on one wage in case of redundancy.
30 years is a very long term.
And, get married!

https://www.economicshelp.org/blog/1485/interest-rates/historical-real-interest-rate/

Try to reduce the term if possible - it reduces the overall cost of the loan in interest and it also means you'll start paying back the principal sooner.

I’m so tired of these types of responses. I don’t set the wages, I do my job, earn my money, pay my taxes and I’m the bad guy because others don’t earn as much? One person who is better off shouldn’t have the ‘read the room’ for the sake of other people’s self-perceived failings because they earn less.

There are so many people out there who do incredible work and should get paid better for it, but one shouldn’t have to constantly be afraid of how these STRANGERS feel for one simply existing in their own space.

Comments like ‘get in the real world’ are so pathetic, as this is the real world, there are haves and have nots, it’s always been that way, and it always will be.

Are you sure you want 5yr fixed when the rates are coming down?

I fixed for 5 years when I bought in a peak, then came the crash, ended up in negative equity so couldn't sell when I had to relocate for work. Anyway, I digress. Depending on mortgage fees (if there are any), if no fees, I'd probably only fix for 2 yrs. Or if there are fees then leave it at 5yrs but overpay as much as you can.

I’d feel a bit uncomfortable if half our income was mortgage and nursery fees. If it’s a big house too they’ll be bigger bills. But then I'm
super cautious! Still in my tiny single mum
mid-terrace house, a decade on now with joint income of £7k and a mortgage of £300. But it has seen us nicely through Covid redundancy and when the heating bill tripled from £30 a month, well…it was all affordable.

are you new to earning this amount of money? My household income is similar we bring in in £10,750 net a month. Our mortgage is £991 and to be fair I wouldn’t want to go above that. Depends on your other outgoings too and commitments. Are you still able to save and continue living the lifestyle you want? You’re in a fortunate position, and it’s easy when you have this money for lifestyle creep to start. We only started earning this amount of money from Jan, so it’s new to me and my husband. I also know it’s not guaranteed forever so I’d rather keep my costs low pay off the mortgage quicker and be prepared for if my husband ever lost his job. We’re in our 30’s, no kids (yet).

Yes you can afford it. Get some good insurance in place if you haven’t already - critical illness, income protection etc

You have 6 months of earnings in savings so that’s good.

A mortgage that is >10% of your monthly income is v low, and the OP is in London where that level of mortgage wouldn’t stretch to a studio flat unfortunately.

We had this exact conversation....it's too uncertain. Yes rates are dropping but it won't be a continuous trend for the next 5 years....how can it?

HOW is your mortgage so low? Large deposit? Well done in any case.

They must live in a cheap area?

This.
I live alone, I earn £5k per month after tax. My mortgage is £551. Threes bed smallish semi in an ok area in a cheapish town

Nah cheap(ish) house & area, we paid £268k with a £34k deposit, fixed in at 2.4% three years ago. We live up north so it’s not overly expensive. When we bought our house our joint monthly income was £3,650 so it was the house we could afford at the time.

A house for 268k I really need to move !!

Mumsnetters always give a roasting. It is not a safe space in that sense 😂Some helpful replies though so worth asking.