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?

All depends on job security I'd say. Also will you be using the savings to move or; for stamp duty, conveyancing, estate agents etc? I'd save for these separately.

OP what interest rate is that with and can you afford an increase to say 6%? Ive just fixed ours at 1.71% for 5 years! This is exceptionally low and I'm well aware that the rates can only go up so we're overpaying now.

OP you don't need to apologise and no one should be offended. If it's a big jump compared to what you're used to then it's perfectly reasonable to think twice, and in fact to be commended.

Will other costs go up? Council tax and bills? How about maintenance? We did a similar move, went from paying around £500 to £1200 and to be honest the first couple of months were a bit of a surprise! It's entirely affordable, no doubt about it, but that doesn't mean it's not a big change.

It's more then fine. I'm clearly in the minority as my disposable spending is the hundreds not thousands each month!!

Is this a stealth boast thread?!

That sounds very easy to manage. Can't think why it would be a problem.

@tentative3 a pleasant surprise or more of a struggle than you imagined?

More of a struggle than we imagined. Frankly, we'd got used to spending without really thinking on food, shopping, days out etc and were wasting money plus the house we moved to needed a few things doing to it and the boiler died a week after we moved in. So instead of never having to check the bank balance, we had to start thinking about it. It's not a sad tale of woe or anything, it's just that we'd got used to living a certain way. The council tax increase was massive as well.

Calculate an increase In mortgage interest rates by 5% and a reduction in pension value by 10% and that will give you a view of the future risk and whether you can afford it. You will need to save more towards your pension than you likely do now. And how many years is the mortgage over versus your actual planned working years remaining....How many years without any mortgage will you have?

If all that seems ok, do it.

@stealthmama all good points. My pension should be fine. I'm not saying too much about how much I'm putting in as I don't want to upset anyone further but I'm putting money away each month.

Interest rates rise could be catastrophic. There's headroom but it would obviously make things very tight if interest rates rose to 6%. That being said, interest rates rise when the economy is doing well, which I can't see happening for some time.

The mortgage would be paid off when I was 54.

So worst case, If that’s a 25 year mortgage you could push it to 30 years to reduce the pressure and over pay when you can?

I just remortgage and fixed at 1.64% for 5yrs because paying a £1k fee for a 1.25% rate in 2 yrs only saved me £170 after cost of fee taken into account and I know interest rates in 5 yrs will go up.

Quite frankly what I've learnt from this situation is to build up my savings I want better financial security so out goes 6months worth of savings I'm aiming for a year!

Literally reduced my spending down to less than £100 a month so I can put aside £1.2k in savings and that's after my outgoings. I'm only earning £2.7k per month.

I look back and realise how much I took earning money for granted I should have more savings if I'd been a but more prudent but still enjoy life .
Christ in your position you should be able to save hella lot more than you are.

And when I mean fesucwd mg spending that's on other stuff not mortgage and Bill's.

Depends on your other outgoings etc.

Our mortgage is £650 and take home pay £3000 per month.

I wouldn't do tbh...but that's just me! We have a combined income of over 4K and I still wouldn't do it. Our mortgage payment before we paid it off was just over 700! And that stressed me out enough! We don't pay council tax either here?

What would your council tax payment be? Electricity and water bills??

@nowaitaminute are you anxious in general?

@saverssavedsavanak then I would go ahead in your shoes. Any interest rate increase would come from anime away and you'd have time to plan and it wouldn't be a single hike to 5%.

Paying off by 54 - you have several working years left after that if no mortgage to switch to high savings, and presumable child at uni/future help etc.

Go for it and live happily ever after :)

(Also you partner would contribute something if he moves in)

Sadly dream home has now sold to someone else so looks like fate has taken care of this one for me!

@mapsie no why?? In just don't like to owe or be tied up in money payments. I don't have a car loan or a credit card either.

Because most people who are spending 18% of their income on their mortgage & no council tax wouldn't be stressed out

@mapsie that's great and may suit a lot of people but when it comes to money I try to keep as little as I can in my fixed expenses category and I work on a necessary (bare bones/four walls) budget
My only fixed bills are

• Insurances, which are;

house (annual) Car (annual) Health (monthly) Life (monthly

• phone bills
• Netflix
• electricity (which I can still control technically)

-car tax (which I pay annually)

Then everything else is a variable spend which I can control. It works for me.

Not sure why you're telling me how you budget....

Hi nowwaitaminute it does sound kind of anxious to have more than 3k after mortgage and bill's and for that to make you anxious tbh. How would you cope if you had a more average family income?

stress would be off the charts I assume

The old are you anxious in general? comment. Classic MN put down 🙄

I'm pretty risk adverse. I wouldn't have been comfortable in the OPs shoes as it seems like dream home was for DP too...so they should be paying towards it.

Do what's right for your DC and you now. Especially with what's going on in the world.