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Original poster

If you've bought a house for circa £1.25Million in the last few years how big is your mortgage?

58 replies

Blankscreen · 07/04/2022 21:10

We've been in our current house for 11!years and we want to trade up.

The next jump is £1.25m ish.

The agents tells me that lots of people buying houses this level have £800k mortgages. Is this right?

We can borrow it but I just don't feel comfortable.

So just interested to know what others have borrowed.

Current mortgage is £380k and I think £600k is the max for me. Which gets us to £1.2m.

DH thinks we should go all out.

OP posts:
needmorethanthis · 07/04/2022 21:16

No mortgage. House worth about 1.2 million. Not sure I’d take on a 800k mortgage to be honest

Farmhouse1234 · 07/04/2022 21:40

For me it would depend on how secure your jobs are (as well as making sure had enough left over each month)

Cocoaone · 07/04/2022 22:10

Well, can you afford it? A £800k mortgage over 25 years at 2% interest is £3400 per month. If interest rates rise to 4% that takes the payments to £4200 per month.

If it's affordable, I'd lock in a 5-10 year fixed term if you're likely to stay that long, as interest rates are expected to increase.

NashvilleQueen · 07/04/2022 22:22

No mortgage. House worth about 1.2 million. Not sure I’d take on a 800k mortgage to be honest]

Not sure that's the most useful reply to an OP I've ever seen...

rubytubeytubes · 07/04/2022 22:31

It really depends on whether you can afford it or not. Only you can answer that.
Yes some people do have large mortgages if that’s size. Do what makes you feel comfortable

LeastofLeicester · 07/04/2022 22:33

They wouldn't lend it if it wasn't affordable for your circumstances!

It sounds a massive amount but what is it as a percentage of your income?

Obelisk · 07/04/2022 22:39

Well, ignore the agent, for one thing- they’re not impartial advisers, they want you to buy the house!

We have approx £950k in mortgages across two houses worth about £2.7m total. It’s a lot of debt but decent equity, we have enough income and good job security.

I think you need to look at things in the round- income, job security, attitude to risk, your other commitments, investments etc etc.

BarbaraofSeville · 07/04/2022 22:44

The most important factor is your income and the security of it. What other people have done isn't helpful because everyone has different deposits, other costs and income security. There will be people who bought a property of that value with a £100k mortgage and others with a £1M mortgage and everything in between.

If you're both employed on £250k each in secure recession proof professions and you have little else in essential costs it's a completely different scenario than if the majority of the household income is some sort of unstable freelance employment like a professional sports person and the other one earns little once childcare costs have been covered.

user1487194234 · 07/04/2022 23:12

£300 k

Original poster
Blankscreen · 07/04/2022 23:13

Sadly not both £250k.
Household income is about £300k a year.

We do pay £1600 a month in school fees but no debt it car payments.

Thanks for your input. It has been helpful.

OP posts:
Ilostit · 07/04/2022 23:42

Have you done an affordability analysis? Outgoings etc vs income? Enough to put into your pensions etc?

BasicDad · 08/04/2022 03:18

@Blankscreen

Sadly not both £250k. Household income is about £300k a year.

We do pay £1600 a month in school fees but no debt it car payments.

Thanks for your input. It has been helpful.

300k/year pre or post tax? If post, I don't think you have too much to worry about. If pre, an 800k mortgage is still a big chunk of money. It'll depend on your overall financial goals for years to retirement etc.
Darbs76 · 08/04/2022 08:23

Bear in mind the cost of heating it! I wouldn’t want to go all out in the current climate

HaggisBurger · 08/04/2022 08:27

@BasicDad I highly doubt it’s post tax! Never heard any one express their income as net in normal discussion / conversation. 600k a year would mean that an 800k mortgage would be pretty affordable and you’d be looking at a deal that allowed you to pay off the capital sum!

Babymamamama · 08/04/2022 08:28

Estate agents will do anything to sell a house. Including making you feel you need to keep up with the Joneses. I would take anything said by an estate agent with big pinch of salt. Round my way most sales like that going to cash only buyers. It’s a sellers market and those with big mortgages get dropped out of the process.

WombatChocolate · 08/04/2022 09:37

If you feel happy stretching to 1.2k, you might find the 1.25k people will accept your offer.

Depends too if it needs work. If you are willing and able to say to yourself that the property has to be absolutely perfect and need nothing spent on it for 5-10 years, that’s diffferent to something that still needs tens or hundreds of grand spent on it.

How old are you?

Often it’s worth pushing yourself, especially if it’s over £50k.

But do a detailed spending review and also work out if interest rates rise where the money will come from and if a crisis occurs, where the cuts will occur to keep you there. Once you have a plan for that, everything feels more manageable. If it’s impossible to make a plan and that price with that interest already involves beans on toast, it’s a stretch too far.

Do think too about how much you’re willing to cut back on holidays, other lifestyle stuff too….school trios can be expensive. School fees are increasing a lot and will do so…factor in up to 10% in the next couple of years, plus the increases at secondary level etc. Really look carefully at the websites for school fees and compound the j creases to see what you could be paying by Yr13. It can be scarily more than you might be paying in Prep.

Silverclocks · 08/04/2022 09:45

The agent wants to sell the house and probably get a % from the mortgage broker.

What would happen if one of you was unable to work? That's always been my barometer for what we can really afford. Is there a big enough cushion to cope with that for a while, while you make (any) necessary changes to your lifestyle?

Soringhaze · 08/04/2022 09:50

Too high. We have a combined income of roughly the same. We bought recently for 1.6 and have a mortgage of 450k and that was really my limit of feeling comfortable. If rates rise significantly, and that does look likely, your monthly payment would be huge.

Soringhaze · 08/04/2022 09:52

Other factors are how old you are, if more children are possible, how stable your job and industry are.

Nw22 · 08/04/2022 09:57

@Soringhaze how is 1.5 times joint income a high amount to borrow? Barely anyone would be able to buy a house if they borrowed that little

Silverclocks · 08/04/2022 10:01

It's worth nothing that the interest on a £850k mortgage at 1% is £8500 pa. At 2% It's £17000 , at 5%...

We've been so used to very low interest rates for so long that people don't realise the impact of increasing rates and all the forecasts are that base rate will go up. The difference between 1% and 2% isn't 1%, It's double.

When I bought my first house, I benefited from a preferential staff interest rate of 5%, which was a huge saving on the general market rate at the time. It really wouldn't be exceptional if rates went back there at a time of high inflation.

Obelisk · 08/04/2022 10:07

@Silverclocks very good point

Dragongirl10 · 08/04/2022 10:11

Depends on your circumstances, can you manage for 6 months on a single income should one of you lose your job? Assuming in most circumstances 6 months would allow for re employment.
What would be the plan in the case of illness? would employer cover income? for how long?
What increase in school fees are likely?
I have had that level of mortgage on a similar level of property, but it really depends on how comfortable you are with mortgage debt.
Look hard at mitigating the risks as above, then have a firm plan B should your circumstances dramatically change, mine was that l would be willing to sell and downsize should life events force me to.
Lastly forgo some holidays/non essentials and build a 6 month contingency fund, ring fence this.

SeasonFinale · 08/04/2022 10:13

@NashvilleQueen

No mortgage. House worth about 1.2 million. Not sure I’d take on a 800k mortgage to be honest]

Not sure that's the most useful reply to an OP I've ever seen...

Well it is isn't because the question was if you have what is your mortgage.
Bushkin · 08/04/2022 10:14

We’re on similar and took on a £500k ish mortgage (320k ish) left now. I wouldn’t have wanted anything over £600k incase one of us lost our job and because I really have one eye on early retirement