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

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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.

Definitely think about the size or your house. Our fuel bills are now as much as the (interest only) mortgage!

Yes, do consider the implications for things like retirement. If it means you have to work an extra 10 years, is it worth it? For some people it will be, but not for others.

Moving is so expensive that I’d imagine you’ll want this to be the last move. So it’s probably worth it if you can crunch the numbers and feel secure with them, than going for a £1-1.1m place and then Wanting to move again in 5 years.

Do the spreadsheets with all your costs and different interest rates and based on only having 1 income to see what the reality of it all looks like. Look at that with your DH and be realistic about security, furtive prospects and what kind of cover and back-up you have in place in case something goes wrong. Sometimes you just have to accept it’s not affordable. That’s okay.

We're going all out with our next house, although we have very different numbers to yours (more expensive house and also higher salary). Our reasoning is that we plan to stay there for 20+ years (have 2 preschoolers so we'd expect to downsize once they've finished school), and the house price rises over that period will be worth more for a large family size home than a smaller home. We have other assets and a large deposit so although running costs will be higher and interest rates are likely to rise, we aren't concerned about affording it.

It sounds like you both have good professional jobs and you will always have other options if necessary, so it doesn't feel like too much of a risk to me.

@Nw22 The absolute numbers here matter because it gets out of hand quite quickly with interest rises. It's not as if they can't afford a house.

500k. Feels like will never pay it off.

I know of family & friends with mortgages in that ball park, some interest only it at least part & part. I guess it just depends on earnings & job security & disposable income.

I wouldn't be banking on making lots of profit on it though in the current economic climate.

I agree that examples like my inlaws who's house is 2m but paid 60k for it is not applicable in these circumstances. Or even people who bought 20 years ago, it's a different time now.

We bought recently for 1.6 and have a mortgage of 450k and that was really my limit of feeling comfortable

Yeah that's not normal to borrow 1.5 x your salary. No one would buy a house at all 😆

My personal rule is that as long as I own 50%, it’s fine. Our house is worth about £1.2/£1.3 and our mortgage is about £450k. We’re thinking of moving and I’d look up to £1.5m ish so we’d still own half.

Our income is about £300k before tax but we have no other big financial commitments. Cars are average and paid for, no big debts, no school fees.

Most people on 50k or whatever are borrowing 4.5-5 x their salaries.

@whoatealltheeggs

We bought recently for 1.6 and have a mortgage of 450k and that was really my limit of feeling comfortable

Yeah that's not normal to borrow 1.5 x your salary. No one would buy a house at all 😆

I'm sure that poster meant they bought for £1.6m...

and the house price rises over that period will be worth more for a large family size home than a smaller home

Not sure about that if interest rates do crank up & higher energy bills will likely see more older people downsizing earlier.

What will the repayment be and for how long. If you want to retire at 60 for example then dont take a big mortgage that goes beyond that

We have a similar value house and a similar income (we earn a bit more) and we almost always get a large annual bonus as well

Mortgage repayments are £4000 a month (short term- our mortgage is sub £400k) , gas and electric was £450 a month before rise, council tax is £3,500 a year, water is £1500. We did overpay the mortgage by 10% a month but stopped that until I see how the utilities pan out.

We dont pay any school fees.

Big houses have big costs. £4,000 a month mortgage plus expenses of the house is too tight for me to really feel comfortable. We rely on bonus for holidays, car insurance hours insurance etc

I'm sure that poster meant they bought for £1.6m..

They said 450k on an income of 300k was the limit of feeling comfortable. I think that's unusual.

@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...

This appears to be quite common, £2 million house in our village was recently bought by cash buyers - they moved from a very average terrace in a decent London postcode where they'd lived for years and originally was a cheap run down area but those properties are now worth millions, so they had masses of equity.

Assuming wages are an equal split and you are paying a decent chicken into pension then you take home about £13k a month

Bought for £1.15m last year, mortgage of £830k. Household income of approx £450k (pre tax). Used cash we had in the bank to work on the house and now it’s worth £1.3-1.4m.

Borrowing is still relatively cheap. Keep your term as low as possible and fix your rate for either 3 or 5 years. People have different risk profiles and circumstances, as long as you have a good handle on your finances and are both decent earners you would be fine.

what the agent thinks or what other people do is beside the point.

You know your own income, finances and spending so ONLY YOU know what mortgage you could comfortable pay (and whether any mortgage lender would lend you that much).

@MySecretHistory

Is this one of the mythical MN chickens?

We have a large mortgage which is 2.35 times our combined gross salaries. We also have 2 children in private school.

We can do it, but there isn’t much slack. Old car, holidays but not fancy, work being out off on the house.

We will get relief when the first child finishes school and inflation will eat away at the real value of the mortgage. Unfortunately, wages lag interest rate rises.

[quote izzywizzywont]@MySecretHistory

Is this one of the mythical MN chickens?[/quote]
Chunk not chicken

We have a large mortgage, but budgeted based on higher interest rates and set a regular overpayment to this amount. Figured if we couldn't afford to do that, we couldn't afford the house in the first place and with the added advantage of chipping away at the capital before rates do (inevitably!) go up.

We had a 606k mortgage on a 260k income (850k house). It’s dropped now to 500k but looking to move soon and upsize and so it will go back up. Have a recent (portable) five year fix at 1.39% so the payments of just over 2k are comfortable, even with nursery fees. But I’m not looking to go up too much to be honest, given the current climate. Feels riskier than when we purchased 4 years ago. 800k mortgage feels a lot…

What rate are you being offered?

Stamp duty will take a chunk out of any deposit for the new property. Factor in interest rates increasing and school fees going up by 5-10% pa.

OP from my very limited knowledge of your situation, I would stick with a mortgage of max £700k in your situation. Don't go to £800k.
Speaking from similar circumstances, I still feel poor everything month, (all relative I am aware); servicing a £700k mortgage is expensive enough, especially with BoE bound to raise rates in the medium term; the cost of living is spiraling which even in your circumstances is noticable.
But that said, I'm quite risk averse; your risk appetite could be entirely different to mine.