Mortgage payment £1100 on take home of £3700?

[saverssavedsavanak]

Is this bonkers?

Mortgage company says it's fine, I feel a bit nervous about it. Have had a small mortgage for years but found dream home. Payment would be £1100 pcm. My take home is £3700. Feels too high or have I just been used to a small mortgage for too long?

It's all relative and depends on your other outgoings, surely? Also do you have enough left to save for a rainy lockdown day.

My mortgage is only 20% of my take home and I can save the same amount per month.

I think it is doable but depends on your other outgoings. You wouldn't want to be having much other debt on top.

If you can afford it and have plenty left over for birthdays, clothes, socialising, etc then it's fine. If however you've got a family and childcare that's a different matter. Our mortgage is only 12% of our income and I wouldn't personally choose to go that high unless I had a pay rise due. I want to clear my mortgage, not be tied to it until retirement.

Jesus do people live in the real world on MN- you have a left over of £2600 a month, how much are your bills. Even with a grand of bills you have £1600 left, unless you spending a fortune on leasing a Bentley or paying two sets of private nursery fees what’s the issue?!

We sold our very low mortgage house to invest in our business and rented a house that was a third of our income. There were various reasons why we had to choose that one.

I’m not going to lie it was a bit scary as if the business were to tank we would have been in a bad position as our outgoings are actually quite high. It’s a huge liability. Business is doing fine now so it’s not such risk but going forward I don’t think I’d put myself under so much pressure.

I think for you it depends if you out goings are low, you can afford to save, you can afford holidays, Christmas and all the other trappings that comes with enjoying life. I don’t think I’d like to own an amazing house but be constantly skint with no savings.

The numbers sound fine, it's job stability, my health and any plans to have kids would be things I'd need to think about.

I have some emergency savings and no debt. No childcare expenses and no more children planned so there won't ever be any.

Think I'm very used to having a good amount of discretionary spending money and not having to think about money too much so perhaps this is why it feels so scary.

I'm used to my repayments being 1/4 of my wage, so I can see how it feels steep.

Are you living alone, so all outgoings are coming from the £3700?

That sounds perfectly manageable, just make sure you create a spreadsheet so you allow for everything you need to spend monthly, e.g car maintenance, food, birthdays etc

Yes living alone so that's probably another reason why it's scary. That payment is entirely reliant on me to pay it.

My mortgage payment at the moment is £570 a month so basically half.

Do you normally spend all your discretionary income or can you save quite a bit?

It's a third. Mortgages cannot get any cheaper, it's only going one way. If you want it, get the longest fix you can.

I save a bit and spend a fair amount on clothes for myself and presents for other people tbh. My income hasn't been this high for very long. I've saved probably £7.5k in the last 6 months so I guess I have saved quite a bit.

Ours is £900 mortgage against a £2900 take home during maternity leave.
It will be tight but manageable. I should imagine I’d feel fine with £1100 against £3700 if job was secure and I had a bit of savings behind me

We were told years ago to have a mortgage of a third or less of your income. Your repayment seems fine to me. It allows a bit for higher interest rates too.

Keep the 7:5 as a cushion and buy if you really want the property.

What does the property offer you that you don’t already have?

If it’s big enough and you thought things were tight you could always take in a lodger or rent a room mon - fri
That would probably cover the difference in your present mortgage to the new one
My friend bought a 4 bed house with 2 bedrooms that are en-suite
She often does short term Mon - Fri lodging and gets around £120 a week for this normally it would be a bit less but because it’s a large room with en- suite and Wi-fi people have been happy to pay this

Meant to say once AirNB get back then it could be a short or long term option
My friends house is near a MOD base so she get a lot of staff that are from there. Out all day and literally just shower & sleep there

There's loads left a month, is this a brag?

We pay more in rent on a slightly lower salary (we can save money towards a deposit each month) and we have a decent enough lifestyle but I appreciate that there are two of us and it may be more worrying for you as the sole earner.

That’s fine.

What does the property offer you that you don’t already have?

Current home is small. I couldn't ever live here with my partner as there isn't room. New place is bigger, room for my partner to move in down the line, and has a place to charge an electric car which I would like. It's in a different town which has a bit more going on. Most importantly of all it's not next door to my very annoying neighbours.

Am I reading this right? You will have £2600 left over every month after paying the mortgage, and that will just be to support yourself and you're worried that it won't be enough? Am I missing something? How on earth do you think you will spend all £2600 and then still need more?

@saverssavedsavanak
I save a bit and spend a fair amount on clothes for myself and presents for other people tbh.
Hi OP. The percentage of mortgage payment to take home pay sounds five, but in your place I'd switch the above so that you are spending less on presents and clothes and focus on more saving for a while. It's great that you've saved £7.5K in the last six months but nobody really knows how the economy will be did the next few years (except that there will be a general downward trend to pay fir the government bailouts, etc) so perhaps best to be an even better saver than you are now.

Also I'm sure you've already considered this but I'm assuming you will be keeping your finances completely separate from those of your partner when they move in? So not on the mortgage/deeds and clarity on what financial contribution they will be making.