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Original poster

Mortgage/Rent as a % of household income

59 replies

Truestorypeeps · 26/04/2023 22:14

Financial experts think your rent/mortgage including mortgage insurance should not exceed 28% of your gross pay.

My mortgage was 20% of my net pay (after deductions), currently overpaying and it's 23.7% which feels manageable. For reference, I'm not including child support in my income figures (two children in Ireland, €280 per month).

What are your percentages, do you find your rent/mortgage affordable or a burden?

OP posts:
BluebellBlueballs · 26/04/2023 22:16

About 10% of mine and DH net pay, so a bit less of gross pay

Wellhellother · 26/04/2023 22:19

Mortgage is about 11% of net pay

PlanningQuestions · 26/04/2023 22:25

I'm more worried about my young adult DC. One has just had a rent increase to 33% of net income - this for one room in a small shared flat. No separate living room, just a sofa in the kitchen. Small damp bathroom, no windows. Shared between three £1000pcm EACH!

Original poster
Truestorypeeps · 26/04/2023 22:37

PlanningQuestions · 26/04/2023 22:25

I'm more worried about my young adult DC. One has just had a rent increase to 33% of net income - this for one room in a small shared flat. No separate living room, just a sofa in the kitchen. Small damp bathroom, no windows. Shared between three £1000pcm EACH!

That really is shocking. I can see why you would be concerned.

OP posts:
Haleso · 26/04/2023 22:39

18% including overpayment

Haleso · 26/04/2023 22:40

15% without

BarbaraofSeville · 27/04/2023 05:38

Ours is about 2% (not rushing to pay it off/overpay because the interest rate is lower than savings rates, it's effectively paid off in a self offset sort of arrangement) but I wouldn't get hung up on percentages and 28% is strangely specific.

If your income was £2k per month and your mortgage was £500, that would be less comfortable than if you had a £2k mortgage and a £6k income despite the percentage being higher.

You also need to consider your other costs. Do you have high childcare/commuting costs. Is the house cheap or expensive to run? Do you have a good workplace pension or do you need to save more separately? How much do you need/like to spend on food? What's your lifestyle expectations? Any of those costs could have a bigger impact on your financial wellbeing than the percentage of your income that your mortgage takes up.

HappilyContentTheseDays · 27/04/2023 06:06

My rent is 39.5% of my pay. Do able though, despite low pay currently, as the rent is also low and my outgoings on bills is extremely low.

OhSmitty · 27/04/2023 06:06

Our mortgage is just under 11% of joint net pay. This suits us as we are risk averse and we are comfortable knowing we could afford the mortgage on 1 wage (21%), as we've previously been through redundancy which was really tough.

JamNittyGritty · 27/04/2023 06:15

30% of my net pay, I am divorced so all on me, 2 kids. It’s manageable day to day but hardly anything left for extras so no holidays, take away or meal out just once a month etc. Worried because I got a fixed rate when rates were low which is due to end in a year and I am not sure how I will cope with much of a rise. Also currently my mortgage runs until I am early 70s 😮
The downside of divorce and starting over…

Dozycuntlaters · 27/04/2023 06:37

@JamNittyGritty yep I'm the same. Mortgage is 32% of my net pay. Started again at the age of 43, am now 52 and have another 14 years of the mortgage. I'm already worrying about whether I can ever afford to retire . Depressing!!

ScribblingAlways · 27/04/2023 06:42

Single and 23% of net, not including tax credits/maintenance ect, which is loads more than it was last time I answered one of these threads. Hopefully will reduce to 21% if/when pending pay rise is accepted

daisydaisy21 · 27/04/2023 06:48

Our is currently 8.5%. We bought a fixer upper in 2016 at 21. We got very very lucky as a lot of our friends are struggling to save enough for deposits now and the repayments being so high.

We'd like to move so will be paying a lot more in the future but hopefully things settle down a little bit first 🤞🏻

GiltEdges · 27/04/2023 07:14

9% of our combined net pay. We currently overpay bringing it to around 17%.

popsickle555 · 27/04/2023 07:21

Currently 19% of our combined net pay however I’ve just swapped us to a better deal so until this month for the last 8 months it’s been more like 22% and has been quite tough! I’ve fixed us for 5 years at the new rate and later into that deal we will try to overpay a bit if we can do.

Eudaimonia5 · 27/04/2023 07:24

My rent is 48% of my income. Rent has increased but my wages haven't. Single parent household. I'm doing everything I possibly can to earn more money but apparently working 2 jobs still means it's unaffordable. I live off credit cards. I'm also retraining and hoping that will improve my situation but that's unlikely as the landlord will probably just put the rent up again in December.

Eudaimonia5 · 27/04/2023 07:25

Sorry, I should have said 48 percent of my net income

shivawn · 27/04/2023 08:27

6.3% of net monthly income or 5.2% if I average out annual bonuses monthly. I assume by child support you mean child benefit, I haven't included that either (also in Ireland).

It's extremely affordable because we bought in 2016 when house prices were a lot lower and our wages were also a lot lower so we bought within our means. We plan to up size in the next 1-2 years but we plan to keep monthly repayments less than 20% (depends how crazy interest rates get). Having such a low mortgage for the last few years allows us to save a lot for our next deposit and we've been very lucky that our current house has actually doubled in value since we bought it so we won't need a very big mortgage.

CaptainSeven · 27/04/2023 11:24

Mortgage only and my net salary only - 42%

With overpayment and insurance still just me 63%

When I add DHs net to the balance

Mortgage only 16% of our joint net pay

With overpayment and insurance 24% of our joint net pay.

flipent · 27/04/2023 11:30

30% of net pay on rent.

ChildOfBabylon · 27/04/2023 11:59

30% of net joint income. In the 90s it was over 50% for a much smaller place.

HackettGreen · 27/04/2023 15:26

This reply has been withdrawn

This has been withdrawn by MNHQ at the user's request.

MillicentTrilbyHiggins · 27/04/2023 15:28

My rent is about 49% of my income.

MyBloodyMaryneedsmoreTabasco · 27/04/2023 15:28

My rent is about 60% income.

andymary · 27/04/2023 15:48

Just under 33% of our joint income for Mortgage and Home/Buildings Insurance.