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Original poster

9k income - how much mortgage would be too risky?

36 replies

twinkie100 · 08/05/2023 19:17

Inspired by another thread...

We have 9k monthly net income. No debt, decent savings.

Two young DCs but by the time we move we will be out of the expensive nursery years - so just after school and holiday clubs.

How much would you be comfortable spending on a mortgage?

Currently £1.1k monthly mortgage, which we appreciate leaves us in a comfortable position but for the last 6 years much has been swallowed up by childcare - which is (finally) almost over.

Jobs are safe and one salary in particular should rise... would £2.5k mortgage be too risky? Mortgage advisor said even 3k fine, but that feels so high...! Do people take out such large mortgages?
Many thanks

OP posts:
Original poster
twinkie100 · 08/05/2023 19:21

Should add, we are early / mid 40s

OP posts:
Ladysquamy · 08/05/2023 19:28

I wouldn't go for a high mortgage but then I'm very risk averse.

prawnring · 08/05/2023 19:30

Mortgages aren't usually dealt with by stating a monthly repayment figure and your take home pay.

As a rule of thumb you may be able to borrow up to 5 times your pre-tax income. So if you were on £100k, you'd be able to borrow up to c£500k. On top of this you need your deposit. You are offered less money if you have dependents or loans or financial commitments or poor credit rating.

It is more normal to borrow 3.5-4 times salary, especially if combining two salaries (so £100k a year would mean about £375k mortgage).

As a general guide 30% of your income is about the most people would usually be able to balance being rent or mortgage, but this varies person to person and if you're on a high income more of a % might be ok as you're still left with plenty of £££ for discretionary spend.

GoneTillNovember · 08/05/2023 19:35

On a 9k net income yes I'd have a mortgage of up to £3k. MN is generally very risk averse though and most people tend to have much smaller repayments on their mortgages I've noticed.

Ours is £2.2k on a net of £8.5k and it's very affordable for us. Our spending all in every month is about £6k so absolutely fine. We put bonuses and other income into savings.

MintyIguana · 08/05/2023 19:36

Are you already contributing to ISAs and pensions? Sounds like a good take home but hopefully you're also saving for the future via salary sacrifice?

Nightmanagerfan · 08/05/2023 19:36

Well we take home £6k between us net and our mortgage is £2250, and it feels very high.

We do have two in nursery tho, so will have some respite from September.

ShinyAppleDreamingOfTheSea · 08/05/2023 19:41

We always made sure that we could afford our basic living costs on one person's salary - if that helps ? Your figures are way higher than ours but I would guess the principle is the same ?

AllIwantforChristmas22 · 08/05/2023 19:41

Are you in secure jobs? Are you going to pay for private schools? Does one person earn most of the 9k or fairly evenly split?
if you are in fairly secure roles, it doesn’t seem too risky to go for 3k.

TheFlis12345 · 08/05/2023 19:42

We have a combined monthly take home of around £7k and our mortgage is £2200 per month which is very manageable plus we overpay. Fixed bills are around £500 a month each then we save around £1k a month each and spend about £1k each including travel and food shopping.

overitunderit · 08/05/2023 19:45

We've got a similar income and our mortgage is 2.2k a month and we have nearly 1.5k in nursery fees too.

arethereanyleftatall · 08/05/2023 19:46

Our monthly outgoings didn't change particularly after nursery costs were gone. Full time nursery costs were replaced like for like almost with wrap around care plus this is when their extra curricular (dance/music/swimming lessons etc start) plus extra food/clothes/school expenses start. It was a bit cheaper but don't make the mistake of thinking it's all the same minus nursery now.

shivawn · 08/05/2023 19:51

I just came here from your inspiration thread I think.

If I include bonuses, child benefit and RSU's then we have a similar monthly income. Our current mortgage repayments are 550 a month but when we upsize we'll be looking around 1500 a month maximum, we will have a big deposit though. We're looking at 5 bedroom houses with big gardens in a city suburb that we like and that's the mortgage we'll need to afford them.

How did you choose the 2.5k figure? Is it just the maximum you want to pay or is it that the houses you want cost that amount? If that's what you need for the house you want and you're comfortable paying it then there's no reason not to.

Dressertv · 08/05/2023 19:53

For me it depends on how uncomfortable you are in your current house then:

  1. a suitable house but maybe not dream how much would this increase the mortgage by?
  2. dream house how much would this increase the mortgage by?

I would maybe go upto 2k but triple check if the rated increased by x amount what would your payment increase too. As it all depends on total loan and time frame. 2k over 10 years isn’t crazy but 2.5k over 35 years is too much for me.

Do you have any lump sums due to pay out in the near future to help take a chunk off the mortgage?

Then the other question would you be happy in your current house and doing some amazing holidays instead?

shivawn · 08/05/2023 19:54

Just saw that you're early-mid 40's. Do you plan to retire early? Will you have the mortgage paid off in time if you do decide to retire early?

Anybridget · 08/05/2023 19:54

Yes, net income 10k
Our mortgage is about 3k a month (2 properties). After bills, school fees etc we have about 2k remaining so it's do-able.

HowcanIhelp123 · 08/05/2023 20:11

For me it would depend on the long term plan. If you're in your 40s when do you want to be mortgage free?

I'm very risk adverse, so I would get something that would be affordable, albeit with difficulty, if one of us lost our jobs. E.g if you both earn £4.5K, could you afford to pay mortgage and live on that? Chilcare bills could be excluded as you'd have a parent at home.

If you think you could stretch to £2.5K a month but don't want to have to commit to the risk, why not go for a mortgage at £2K a month then see if £2.5K a month would be within the acceptable overpay limit (often 10% of remaining balance each year). Then you could get a £2K mortgage, overpay to the £2.5K and pay off quicker which will save you interest, but have the option to drop back to £2K if you need to for a few months if you have any big expenditures?

Blibbleflibble · 08/05/2023 20:15

£5k net with 1k mortgage and a child part time in nursery and feel like we have a comfortable lifestyle and still save every month so don't think the figures you're talking about are risky at all. :)

SleepingStandingUp · 08/05/2023 20:46

Surely impossible to comment without knowing your other outgoings.

You aren't looking at private for primary but what about secondary?

How much on bills and maintaining the standard of life you enjoy?
How long do you want to be paying it off, early retirement etc?
How much is the actual homes you're looking at?

We could live comfortably in 6k a month if our mortgage was 3k but that doesn't mean someone looking at private school living on the south coast would

CatOnTheChair · 08/05/2023 21:08

Generally, spending 1/3 of gross income on rent/mortgage is classed as reasonable. I'd also say the more you earn, the easier it is to stretch that (unless you are thinking private school).

So, yes, on paper it looks reasonable.
It's one pretty hefty mortgage in some places tho (and nothing exceptional in other places!).

CuriousGeorge80 · 08/05/2023 21:50

We are net 9.5k with a mortgage of 2.5k and it’s totally fine - plus we have nursery fees over that too. We manage to overpay a bit, but to be fair I get a big bonus as well which we use for emergencies, overpaying etc.

Heatherbell1978 · 08/05/2023 22:20

Yes I'd do it - our mortgage is same as yours (£1.1k) and we're on net £6.5k after hefty pension contributions. Ours feels comfortable and also planning on private school for two DC.

Heretomakeadiff · 08/05/2023 22:21

10k income 700 mortgage payment and 700 in childcare costs.

DanceMonster · 08/05/2023 22:26

Yes people do take out such high mortgages. The average is apparently around 30% of take him pay. Many people on £3k a month have £1k mortgage costs per month, leaving far less to spend than you would have with a £3k mortgage.
No one can tell you how much to spend. It depends on what your other expenses are.

JimJamJo · 09/05/2023 09:08

Does it not depend on what your other outgoings/priorities are and if you need a bigger mortgage? We paid a large mortgage on lower take home but there wasn't much choice! We had an interest only offset though so we could vary the mortgage payments as and when it suited us which I felt minimised the risk of losing jobs etc

Moneypanicker · 09/05/2023 16:53

No more than 25% of take home pay so £2250. Mine currently is 11.9% but we are massively overpaying as want to pay off in 4 years so we are currently paying 30% we are able to manage this comfortably at the moment but if anything happened we could easily just pay our standard mortgage amount.

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