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Original poster

Rent/Mortgage - What % of take home income do you spend?

77 replies

escape · 01/08/2013 22:45

I am driving myself crazy deciding weather to rent a house that would cost £400 pcm more than I pay currently.
I believe can afford it, and for various reasons it will make me so mch more happier ( lifestyle/sanity!)

Can I ask what % of your households take home income do you spend on rent or mortgage - I want to know if I am being frivolous even contemplating this... TIA.

OP posts:
Pascha · 02/08/2013 08:17

Approx 35%.

Envy of 5%

Notyetthere · 02/08/2013 08:19

Take home combined income £3k after tax, 40% towards mortgage payments. Our payments jumped from 30% when we bought our 1st home.

Original poster
escape · 02/08/2013 08:48

I agree that there is no formula - i think I was 'looking' for one!
I have savings fora deposit to buy - obviously that pot can never be too small and savings are a good thing.
Living here has become pretty unbearable for me, I have been actively looking for over a year - they are just SO far and few between what I live in now and the next 'step' up - detached/4 bed etc. This 400 pcm difference is the 'average' price for the upgraded space etc, and I do like this particular house.

Quite vulnerable these past couple of years and am sole earner/breadwinner - and petrified of making the wrong decision!

OP posts:
bigkidsdidit · 02/08/2013 08:52

5%! Wow!

fanjoforthemammaries7850 · 02/08/2013 08:55

15%

OneLittleToddleTerror · 02/08/2013 08:56

I'm exactly the same as sleephoglet! £4k net and £800 on mortgage. But we were paying £1k a month before at a higher rate.

Damnautocorrect · 02/08/2013 08:58

50-75% oh is self employed so it varies

delilahbelle · 02/08/2013 08:59

25%, but DH sometimes overpays as well.

HappyAsASandboy · 02/08/2013 09:00

I don't think the percentage on rent/mortgage is really a goo guide to affordability. The evening standard had a great article on this on Wednesday; basically saying I you live outside of London, with half the rent, it actually costs you more because of travel. I think it makes more sense to look at the actual figures, or at least the percentage spent on non-discretionary things (rent/mortgage, Childcare, commuting).

For what it's worth, we pay about 20% of our combined net salary as mortgage. Childcare (part time places) is anoth 20% and travel is about 15%. That leaves us with very little at the end of the month once bills, food etc are paid.

McFluffy · 02/08/2013 09:04

This reply has been deleted

Message withdrawn at poster's request.

MrsPear · 02/08/2013 09:09

50%

No that is not typo - half our income goes on rent. Not entitled to benefits or social housing as DH earns too much. I live in a 3 bed masionette [sp] on a council estate in SE London with 2 children, DH and BIL.

Very envious of the 0 people.

GrumpyKat · 02/08/2013 09:09

26% of a normal month (dh is self employed and it's variable). We save for one big holiday a year and live quite well the rest of the time. I wouldn't want to be paying anything higher than that, in fact we have abandoned our plans to move to a 'better area' as we sat down and worked it out and we would basically have to do nothing.

MrsPear · 02/08/2013 09:13

Oh and an estate agent said that the formula they use when working out if someone can afford to rent a property is to divide pre tax / NI income by 3 then by 12. So if you earn 26k (which I believe is national average) you would be able to rent a property at 722.22 which would get a studio and if you are lucky a one bed flat round here.

madamginger · 02/08/2013 09:14

20% but I only work part time. In a couple of years when ds2 starts school I'll go back to work full time and it will go down

Portofino · 02/08/2013 09:16

25%. We rent and are planning to downsize and save money to buy some for retirement.

3boys3dogshelp · 02/08/2013 09:19

About 25%, will jump to about 34% while I'm on mat leave - I'm dreading it.

Procrastinating · 02/08/2013 09:20

25%. We recently moved, it was about 10% before. I work from home and for me the move up was scary but worth it. We now have plenty of space, a big garden and I have a study.

OneLittleToddleTerror · 02/08/2013 09:23

3boys3dogshelp don't worry, maternity leave is temporary. Everyone goes through this. It gets very very tight towards the end!

bunjies · 02/08/2013 09:25

I am sole earner and rent is 45% of net income Sad.

IdaClair · 02/08/2013 09:33

At the moment it is 74% of our earnings as DH is out of work.

VivaLeBeaver · 02/08/2013 09:42

5% is nice but we live in a three bed semi as opposed to a bigger house like most of our friends.

I know a 3 bed semi is still nice and bigger than what some people have.

We could move to a bigger property and have more space but I prefer having more disposable income to be honest. And I always worry about redundancies, illness, etc.

specialsubject · 02/08/2013 11:03

your landlord should be nervous if the rent is more than 40% or so of your income.

WhispersOfWickedness · 02/08/2013 12:49

We are similar to Viva, ours is a small 3 bed semi that DH bought 10 years ago when single and on £15k less. We're in a rubbish area and the market is very slow, so will be hard to move once we're in a position to.

thehomesecretary · 02/08/2013 12:58

DH is sole earner at the moment and our rent is 44% of net income. We seem to manage ok...

LadyLapsang · 02/08/2013 14:19

3%, but we have enough savings to pay it off if we wanted - offset is great for us with interest rates so poor. DH would like to pay it off but I want to be able to take money out for a deposit for DS if he would like one.

Having said that, however, when we started out there were some months when we probably paid about 45%, so it can get much better. Also we both work full time now - I didn't anticipate I would return to full time work when DS started uni, but things are so uncertain and the option to increase hours, get promoted etc. may not have come along again so I think it's best to take the opportunities when they come along.

Like Viva, we could have bought a much bigger house but we didn't, partly because we needed to pay school fees. Now the school fees are finished, we feel a lot better off and can save more.