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Original poster

Amount of income on mortgage?

31 replies

catnip1990 · 09/11/2022 20:51

Hi everyone,

My husband and I are keen to move to a larger property and are trying to work out what a sensible amount of our income would be to spend on a monthly mortgage. Pre the change in interest rates, we were obviously able to buy at a much better mortgage rate, and now wondering how far to stretch ourselves without tipping ourselves over the edge in the current climate!

For context, our combined income after tax, pension, student loans is £7100 (which I very much appreciate we are very lucky to have!). We are in our early 30s, children not on the horizon. My husband has pretty much peaked on his income, but I still have scope to increase mine.

I have a car on finance at £230per month and we are paying down a loan of around £9000 from a new bathroom this year.

We are keen to try and stretch to a forever home to prevent having to pay high stamp duty twice over.

We don't go out for food/drinks etc. much and pre-pandemic and since, haven't been ones to spend thousands of pounds on holidays and things.

I know it's a very subjective question! But I really would appreciate opinions.

Thank you! :)

OP posts:
SandysMam · 09/11/2022 20:56

How much is the property you are looking at?

Lcb123 · 09/11/2022 21:00

our mortgage payment is 25% of our combined take home, plus we pay £125 a month service charge for the block of flats. We always wanted to ensure that if one of us wasn’t working we could afford the bare essentials on one income

gogohmm · 09/11/2022 21:00

As a general rule I wouldn't want to pay more than 25% of income on my mortgage now, this gives you a decent margin in case interest rates rise and/or you need a loan for unplanned repairs etc.

finallydones · 09/11/2022 21:05

You could easily go to 30% or 35% as 25% of 4k is very different to 30% of 7k plus you aren't planning dc.

SweetPetrichor · 09/11/2022 21:05

My ‘mortgage’ payment goes to family as I have a loan from them rather than the bank, it so it is not subject to interest rates or economic climate, but it works out at approx 15% of our take home earnings. We don’t spend much on luxuries, outings, etc, and own our (aging 13 yr old) car outright. At 15% of take home it is very easy to pay and still allows us to save. It’s all so subjective though. We have no kids, a cheap life style and are savers by nature.

Original poster
catnip1990 · 09/11/2022 21:08

SandysMam · 09/11/2022 20:56

How much is the property you are looking at?

We were wondering if we could stretch to £600,000? But mortgage payments at 6%+ are rather huge! Our plan would be to go onto a tracker and weather the truly bad rates and hope they come down and settle at around 4/5%, at which point we'd fix in. But I'm unsure if this is unrealistic. We'd be looking at a 10% deposit after land tax (Wales), estate agent fees, solicitor fees, moving etc.

OP posts:
Cuddlywuddlies · 09/11/2022 21:08

Well it depends on lots of things? What do you spend on it now? How much are you saving per month? Do you want to be able to save as well? Do you want to have dc?

finallydones · 09/11/2022 21:09

@catnip1990 where are you living now?
I would try & save up a bigger deposit & get a lower LTV.

Original poster
catnip1990 · 09/11/2022 21:12

finallydones · 09/11/2022 21:09

@catnip1990 where are you living now?
I would try & save up a bigger deposit & get a lower LTV.

We live in a semi-detached 3 bed which is quickly becoming too small due to hobbies and the likes! Husband is feeing really low about it all currently and is desperate to move, whilst I'm more of a realist and more cautious about things in the current climate. Our current mortgage is £240,000ish, with approximately £100,000 equity .

OP posts:
BackOnTheBandWagon · 09/11/2022 21:15

Ummmm... I'm going to get all Kirsty Allsop on you.

You want to spend £350,000 on space for some hobby stuff??

Get better storage.

Seriously.

Wait until it's more affordable to move.

finallydones · 09/11/2022 21:17

@catnip1990 so you have a very low mortgage now, how much could you save in a year?

Original poster
catnip1990 · 09/11/2022 21:19

BackOnTheBandWagon · 09/11/2022 21:15

Ummmm... I'm going to get all Kirsty Allsop on you.

You want to spend £350,000 on space for some hobby stuff??

Get better storage.

Seriously.

Wait until it's more affordable to move.

I do love Kirsty!

It's a rather unique hobby that really is requiring us to move somewhere detached and with some land.

Trying to convince husband it isn't forever (current situation!), and that a year is a good shout, but I also hate to see him unhappy :(.

OP posts:
Yoyooo · 09/11/2022 21:24

Why do you need a loan for a bathroom when your monthly income is so high?

BackOnTheBandWagon · 09/11/2022 21:28

Ok. That's a bit better ;)

If he really really wants to move and can't stomach staying, then I guess you could set out a timetable. Spring is the best time to list and look for a house, so you could spend the next few months prepping your house to sell, then start looking over next spring and summer, and by the time you get to exchange / completion it'll be at least 9 months from now.

Is that a compromise you could handle? It means you're not starting everything right away, but you are on the journey towards it

Original poster
catnip1990 · 09/11/2022 21:30

Yoyooo · 09/11/2022 21:24

Why do you need a loan for a bathroom when your monthly income is so high?

Our income was about half what we are now earning, due to husband passing some exams which significantly increased his pay (very proud of him!), and a promotion has just given me a jump in pay this month :).

OP posts:
Ringbling85 · 09/11/2022 21:30

Yoyooo · 09/11/2022 21:24

Why do you need a loan for a bathroom when your monthly income is so high?

This!!

Gloschick · 09/11/2022 21:31

Work out the cost of the new mortgage/ additional running costs and put the difference in a savings account for the next few months (you need to give the market time to adjust). That way you get a feel of what you are taking on, and also end up with more savings.

Ringbling85 · 09/11/2022 21:32

catnip1990 · 09/11/2022 21:30

Our income was about half what we are now earning, due to husband passing some exams which significantly increased his pay (very proud of him!), and a promotion has just given me a jump in pay this month :).

Show quote history

If this is the case I think you are both getting ahead of yourselves and doing the classic move of oh I’m earning more so I must spend more!

my suggestion…sit tight and save save save !! Invest in more storage for hobby stuff and tell dh he needs to relax!

Original poster
catnip1990 · 09/11/2022 21:32

BackOnTheBandWagon · 09/11/2022 21:28

Ok. That's a bit better ;)

If he really really wants to move and can't stomach staying, then I guess you could set out a timetable. Spring is the best time to list and look for a house, so you could spend the next few months prepping your house to sell, then start looking over next spring and summer, and by the time you get to exchange / completion it'll be at least 9 months from now.

Is that a compromise you could handle? It means you're not starting everything right away, but you are on the journey towards it

Thank you for your suggestion! That's certainly something I'd be comfortable with and husband is happy to wait until after Christmas to get the ball moving. Would give us opportunity to save a bit extra/pay down the loan! I am busy trying to finish our house off (one room left to paint and we need to re carpet the two staircases!) and then looking to declutter/move some things into storage/my parents' garage to give the house its best shot.

OP posts:
NCFT0922 · 09/11/2022 21:33

In the nicest way OP, judging by the fact you have 60k saved and had to take a loan for a bathroom, I’m going to assume neither of you are great with money. I would wait. There’s 2 of you in a 3 bed semi so I’m sure you can hold out for now.

Original poster
catnip1990 · 09/11/2022 21:35

Gloschick · 09/11/2022 21:31

Work out the cost of the new mortgage/ additional running costs and put the difference in a savings account for the next few months (you need to give the market time to adjust). That way you get a feel of what you are taking on, and also end up with more savings.

That's a really good idea! I think that would be something really sensible to do to help figure out if it's workable.

OP posts:
Original poster
catnip1990 · 09/11/2022 22:04

Thank you everyone. I really appreciate the unbiased opinions :). Food for thought! Will go back to husband and try to help him see through the lens of realism.

OP posts:
cosypeppermint · 09/11/2022 22:08

NCFT0922 · 09/11/2022 21:33

In the nicest way OP, judging by the fact you have 60k saved and had to take a loan for a bathroom, I’m going to assume neither of you are great with money. I would wait. There’s 2 of you in a 3 bed semi so I’m sure you can hold out for now.

Was coming here to say this. You should also pay off that loan before buying another house!

IsItaCowIsItaPlane · 09/11/2022 22:54

cosypeppermint · 09/11/2022 22:08

Was coming here to say this. You should also pay off that loan before buying another house!

Show quote history

This! What ever you owe in loan's will be taken off the mortgage you are allowed to take.

I personally think you are crazy. I have a big house with some land and my mortgage is only £300k and my payments are 1700 a month.

Original poster
catnip1990 · 09/11/2022 22:59

Yes, plan is definitely to pay off the loan! I hate the idea of living somewhere different but paying for something belonging to a previous house.

We'd love to buy somewhere for £300k with land, but unfortunately it just isn't possible here :(

OP posts: