would this size mortgage scare you?

[lucykate]

we have to move with dh's job to a different part of the country. to get a house the size we would like (4 bed, so we have a spare room for visitors as we're moving away from family), would need to spend about 250k. will have 90k from sale of current house, so would have to borrow about 160k but it scares me borrowing that much.

Depends if you can afford it! It's irrelevant to me the size of the borrowing - 100k, 150k, 200k, as long as I could afford the repayments. No issue if you can afford it - what's the problem?

Plus, not like you are borrowing 100%.

See it's all relative - Sackache has a current mortgage payment of £200 odd - I'd feel like I'd won the bloody lottery! Also depends what your other outgoings are.

Plus, it all depends on circumstances - if you see yourself getting realistically better off in the future and if you plan to stay in a house a while then it's a short term struggle for long term gain.

Our mortgage here is massive but we've only just moved to this house but we probably won't move now for 25 odd years! By then, the mortgage that now is hugely significant, will be much less so in 5, 10, 15 yrs time.

ALSO, depends whether you can cut back if things are tight. If you mortgage up to the hilt but have no luxuries you can get rid of adn little opportunity to earn extra if you need to then it's not good. Our mortgage is large but there are plenty of things we could live without if it became necessary (get rid of 1 car, sky plus, gym....)

We increased our mortgage massively last time and on paper it looked like we could easily afford it and although we can it involves being quite strict with other things which we are not used to and so we are selling up to buy a smaller property with no mortgage and have a bit more of a life.Unexpected things crop up all the time and so it is hard to do a realistic budget I think if you expect your circumstances to improve with salaries etc then its fine but any uncertainty is a big no no

250k sounds ok if you can afford it. Round here, if we want to move from our very small 3 bed to a 4 bed with 2 receptions and stay in same village/or next village along, we need to increase our mortgage by 200k. I am not kidding you. Ours would sell for about 180k and the 4 beds down the road are about 380-400k (2 on market at the minute) Nothing really in between.
Ours is one of 8 very small terraced 3 beds - 4 either side of street and the smallest houses in the area. Anything bigger is either very old wooden beams and so very expensive and only 2-3 bed or large and too expensive.
I am hoping for a market crash as our way of staying in location and being able to upgrade..

Got to admit that would petrify me to owe that much money. I have a 50k mortgage and a lovely house but sometimes even though my mortgage is very managable I worry if dh lost his job or was seriously ill how we would manage.
With a mortgage that size I know I wouldn'e be able to sleep at night.

I don't really think it's down to the bottom line of £, it's more whether it's right for you.
Are you the kind of people who are good at tight budgeting? Would your dh feel a lot of pressure as the main breadwinner? would you feel resentful if finances meant you had to go back to work? Do you both like freedom to buy little treats (books, gifts for the kids, nice b-day pressies, expensive chocolate, flowers etc) without having to check with the other? Are holidays important to you? is saving for a pension important to you? will you be wanting to decorate the house? when the family comes to stay will you be wanting to go out for meals etc? do you tend to play with the kids at home (or at friends) rather than going out to soft play areas etc?

Personally I wouldn't choose to try and live on approx £900/month for everything except mortgage because I'm just not that kind of person and I'd get really resentful. But it is perfectly possible.

I can't believe that all your mortgages are so low.
Only 5 % or 10 % of income ?

We pay over £1000 a month.
On a £130,000 mortgage.
£1000 = just under 30 % of our income.

I wonder what kind of mortgage you all have ?

philippa is right - you have to work out what your priorities are. You mention an interest only mortgage. What are plans wrt saving to pay it off at the end?

I see gdg's point as well. What seems huge now will seem less in a few years. We bought our house 5 years ago and had a 99K mortgage on a 110K property. We now owe about 94K (because we extended the mortgage once) and the house is worth about 250K. That makes me feel better because the market has a long way to crash before our house is worth less than 94K. We moved when I was pregnant with DS so despite our income going down (I went part time) and our expenses going up - feeding and clothing two children and 3 days of childcare fees a week we managed.

Our mortgage is lesss than 25% of income. But when DS was still at nursery the childcare fees were more - so mortgage and childcare together came to 50%. I think a lot depends on whether you have one earner or two earners and a large childcare bill.

RachD - I will be paying £600 per month on a £118k repayment mortgage with the Halifax. Don't think thats out of the ordinary!

I wish we only had a mortgage of that size! So no, it wouldn't scare me so long as i knew I could actually afford to repay it every month.

I think it depends on your other outgoings. Also if you were struggling you have the option of going back to work.
Just worked ours out and it is 14% of earnings - so why does it feel we never have any money

I think it depends on your income but also where you live..in this area rent for a two bedroom house is about £575, cheapest houses are about 165,000 that would probably be a small terrace needing renovation. A typical 3 bed semi detached would be around 260,000 probably needing updating and to rent that would be about £950..so renting or buying in this area a lot of people are paying a high percentage of income.

Just remember it's not only the mortgage you have to pay it's the council tax, water, elec, gas, and everyday things like food.
A friend of mine was told her and her dh could borrow 250k, so they did and the house was amazing, but within 6 months they were in arrears and finally had to declare bankrupcy and had the house repocessed all because they over stretched and borrowed the max.

Agree with everyone else who said it would scare them if they were stretched to the limit by it.

Our mortgage is about 25% of our net monthly income. Personally I think that while you are earning you should leverage like mad and make the mortgage co earn you money!

i'm being quite realistic about it all, i hope!, and have found out how much council tax for new area will be. dh however is not. he thinks we should be borrowing more than 160k!!!. one building society has told us we could potentially borrow 200k, but no way would i want to go that high.

i want to stick to a purchase price of 250k or less, mainly because above that, the rate of stamp duty increases, and thats another expense to take into account. i've come to the conclusion that the main factors are to find a house we would be happy in, and find a good mortgage deal that keeps the monthly repayments as low as possible.

I think I would feel nervous too, even if I knew I could afford it really. I think what scares me is what happens if interest rates go up. So yes, the absolute size of a mortgage and not just its current affordability do affect my views.
I think I have read in various money articles that around 20-25% of net income is reckoned to be a 'safe' measure of affordability for a mortgage. I'm sure though that in the current climate lots of people are more stretched than that.