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Original poster

If you are a homeowner with young kids in your mid 30s....

48 replies

bakeitup · 09/08/2017 10:01

What proportion of your household monthly income goes on your mortgage?

We are a family of 4 (DCs are 6 and 3) and 20% of our monthly (net) income goes on our mortgage, we have 23 years left on it. DH and I are both 35 have pretty well paid jobs (although both freelance) and a decent house.

We are considering moving and I am wondering on average what people normally pay out in terms of mortgage compared to monthly income for a family at this sort of life stage. I think we could pay out a lot more but not sure if that is a sensible thing to do when we don't 'really need' to.

OP posts:
ChilliMum · 09/08/2017 10:13

I think we were paying slightly more at that age, nearer 30% put it was doable confortably.

We havé since moved (with work) and cost of living is higher here so still paying around the 30% mark but finding it a bit more of a stretch.

Looking forward to a drop in childcare costs next year as eldest is off to secondary which should ease things a bit.

Only you know if your finances will stretch to it and it's importance vs holidays, days out, hobbies etc. There is no house in the world I would sacrifice my ski holiday for, it's all about priorities Grin

bettybyebye · 09/08/2017 10:58

We are in those circumstances and our mortgage is currently 20% of our take home pay, which is manageable. Childcare is significantly higher! Angry . We have 21 years left on the mortgage currently. I wouldn't be happier taking on a higher mortgage right now as we are paying so much in childcare (DCs are 4 and 2) but perhaps would when the youngest starts school. Do you need to move? Also consider other increases with a (presumably?) bigger house - higher council tax and utilities

wobblywonderwoman · 09/08/2017 11:03

A quarter of our net income goes on the mortgage. One weeks wage a month - actually slightly more. We don't have bug childcare costs though.

squishysquirmy · 09/08/2017 11:04

If you are not sure if you really need to move or not, could you put off moving for a while, and in the meantime increase your mortgage repayments to what they would be (plus extra to represent increased council tax etc) if you moved to a bigger house?

See how much you really miss that money, and in the meantime reduce the amount you owe on your current house (and the future interest you will be paying), and increase the equity you hold. Then whatever you decide, you are in a better financial position.

IheartCaptainHolt · 09/08/2017 11:06

Ours is 25% of our wages. Our child care bill is less than the mortgage

Youcanttaketheskyfromme · 09/08/2017 11:08

My mortgage is about 1/5 of my total salary.

TallulahBetty · 09/08/2017 11:16

About 20%. We can, and have in the past, paid more.

moggle · 09/08/2017 13:21

35% of take home (but take home is net of childcare vouchers as well as tax). It was 28% when we got it but I've since gone part time. Things are tight at the moment while we have small kids, but it is manageable. We should be able to remortgage at a lower rate in 2 years. We won't ever need to move for more space; if we need to move to another area it will be cheaper, we live in a stupidly expensive part of the UK.

Passthecake30 · 09/08/2017 13:26

Mortgage is about 15%, childcare is about the same. Holiday is about 7%. A lot of our money goes on house renovations and we don't feel very well off atm, though our household income isn't too bad (£60k?). I wouldn't overstretch yourself at the moment, you have years and years left of paying childcare (something I am beginning to realise!)

Skittlesss · 09/08/2017 13:28

15%. We are early 30s with 2 children.

We only bought our house last year after renting other houses. At first I hated renting for so long, but now I'm glad we did it that way round as our house will last us now til we kick the kids out Grin a lot of my friends bought small 2 bed houses when they were much younger and are now going through having to move as they don't have room for more than one child.

We could have borrowed more but we didn't need to as our house is fine, plus it's nice not paying too much out on a mortgage. Watch me come back in 5 years saying I want a mansion. Lol.

Original poster
bakeitup · 09/08/2017 14:45

Thank you this is very interesting and some good tips here.

We definitely don't 'need' to move it would only be for a preference of having a larger garden and to be away from what is a semi-busy road in a big ish village. We actually live in a lovely 4 bed semi in a desirable village with nice garden but long term we would both like to live more remotely I think. I think if we did it now we would need to increase our mortgage by an additional 200k and just wondering if I should even consider it. When we moved here we moved from a huge city and didn't want to live somewhere too remote but now we have gotten used to it that quite appeals to us!

Childcare costs are (relatively) low for us, half of what the mortgage is and will end in a year (mostly) so that is perhaps a good time to consider it. Having said that we may want to fork out for private secondary school which would obviously be a big additional expense!

OP posts:
Original poster
bakeitup · 09/08/2017 14:47

Also this is our first house, we have had it 4 years but before that rented for years because we were in London and couldn't buy. I think the house we are in now is not our 'forever home' hence I am always wondering when a good time to move would be (financially). We would stay local for schools / friends etc.

OP posts:
unlimiteddilutingjuice · 09/08/2017 14:52

Your all going to hate me for this but.....
..Just under 6%
Joint income is £25,000
Mortgage is £120 per month on an ex council maisonette bought atthe bottom of the market for £50,000.

BewareOfTheToddler · 09/08/2017 14:54

We have one DC aged 2 and have just bought; our mortgage is 25% of take-home pay, and about £10k less than the max available to us to borrow. About 25% also goes on childcare and commuting costs, with the remaining 50% for bills and fun money.

In the last place, our mortgage was 15% of take-home and travel costs were way less, so things are much tighter now but it feels affordable. I wouldn't be happy with more but that's more about the amounts than the percentage, if you see what I mean?

HeyMicky · 09/08/2017 14:59

15% - DH and I are both 37 and work full time. Childcare costs are the same. BUT we have massively benefited from rising prices in our area - when we bought 3 and a half years ago it was higher, but when our initial 2 year mortgage came to an end the value had shot up without us doing anything and we owned a bigger percentage of the property.

We are very fortunate - I don't think 20-25% is unusual for people at this stage of life

LML83 · 09/08/2017 15:01

When we moved from 1st house to current mortgage required increased by more than double.

We knew what we wanted but were nervous about affording increase. We shortened term on our first house to 5 years. This increased our mortgage payment to what the new one would be and the interest we saved was huge. Was a good way of reducing the debt to increase equity when selling 2 years later. What I am suggesting is overpay ur mortgage and see what the reality feels like. Remember council tax will increase too.

Our current mortgage is about 15% of our income. As nursery fees reduce we plan to overpay/shorten term. Means if rates increase we will have a better ltv and qualify for best interest rates.

EezerGoode · 09/08/2017 15:04

Wow...our mortgage is half of our income..I assumed most people's were too

Macarena1990 · 09/08/2017 15:06

About a third ShockShock

That said we are in London and are reasonably fortunate in that are mortgage is around £160k and our house is worth around £550k. I'm sahm so no childcare costs.

EezerGoode · 09/08/2017 15:06

Ours will be paid off in 5 yrs....with 25 left before retirement to get some savings ...

EezerGoode · 09/08/2017 15:08

15 not 25.. stupid I pad

BackforGood · 09/08/2017 15:18

I'm quite surprised by the low %s on here too.
I guess it depends how important the things are to you, that you might then have to cut back on if you extend, and then interest rates rise. Not knowing anything about your lifestyle I don't know if that's cars or holidays or clothes or eating out or whatever else.

I was going to suggest the same as / similar to Squishy (it's what we did before moving) - save the amount you would be paying on a new mortgage (well, the difference between the 2 mortgages) for a year or so and see how it feels living off what is left. You also end up with the bonus of a few £K extra saved, come moving time).

The other thing to think about is where you are on the career path - is your income likely to rise steadily over the next 10 - 15 years, or have you reached the top of your likely earning power. Also, how secure are the jobs ?

ChampagneTastes · 09/08/2017 15:31

I think ours is about 15% now I come to think about it. I thought it was much more in my head! We are very lucky though, we live in the sticks and got an inheritance which has helped things.

Skittlesss · 09/08/2017 15:36

I guess it depends where you live as to the %. If you picked my house up and put it somewhere down south it'd be worth 3 or 4 times more.

Youcanttaketheskyfromme · 09/08/2017 15:39

Mine is low because it's help to buy and it was the only one they offered. It's a 30 year with 28 years to go. I intend it to be much higher soon so that I can pay it off much much quicker.

Youcanttaketheskyfromme · 09/08/2017 15:39

Fixed for first 5 years.

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