Mortgages

[CIng]

Looking for some guidance. Pls don't bite my head off as I'm aware that we're privileged. What proportion of net income do high earners here spend on their (newish) mortgages? We're looking at spending 41% of our joint net income on a mortgage 🤢 we'd be left with 9.5k each month (which feels more than enough) and it's for a house that we could stay in forever. Alternative is a house in London that we could stay in for a few years.

Obviously the market (house prices and borrowing rates) are crazy and in an ideal world we'd spend much less on a mortgage but trying to be realistic given that we live in an expensive area and don't have the option (due to work) of relocating far away. So any realistic guidance would be appreciated.

I think if you are left with that much money a month it honestly isn't a problem to have a larger mortgage. What i would recommend though is taking it very seriously, even those of us in the most privileged of positions need to prepare for changes in life that can happen to all of us, so i would make sure your associated insurance policies are thorough, up to date and watertight.

It must be a very big mortgage, so rather than focussing on what you have left per month (which is a lot) I'd be focussing on the security of your roles, savings, insurance, it's more the catastrophising of what could go wrong and how you'd cope if one or both of you lost your job.

Stress test yourselves for mortgage rate rises, and lifestyle changes like childcare, private school.

I agree with this.

Could you manage for a while if one of you lost a job or hit burnout and needed to take a step back? Will you need expensive childcare such as a nanny?

Thank you for not biting my head off! I agree with all of this. We'd take out insurances and career prospects are fine. No kids yet and tbh if we did have them it would be a blessing so I wouldn't mind if we had to sell the house!

Honestly having that amount of income left over you will be fine

Years ago when prices lower it used to be 1/3 for rent /mortgage - bills - own money

Now days rare to be 33%. Many are nearer 50 with rates

So you at 41% sound fine

With £9.5k leftover, surely you'd be able to overpay as well as having a luxurious lifestyle. You could earmark the £2/3k that childcare is likely to cost you and use that to overpay or save if you used up the allowance you can overpay without penalty and still have plenty leftover for living on.

With such a large surplus, guideline percentages don't really apply as your 59% leftover is such a large amount compared with someone who has 75% of £2k leftover.

Yes I agree stress test needed.
Kids cost a lot as does childcare
How secure are your jobs? How old are you?
And lastly I am gonna be a nosey cow and ask what yours jobs are for that left over! ( not at all a dig, you have obviously both worked hard )

Security is a massive factor, the numbers aren't really important at all. Assuming that comes from the income of working, the fact that it's 41% is definitely a worry. I agree with all previous posts, make sure it's doable if the worst happens.

Thanks for the pleasant responses everyone, I really appreciate them. I agree that security is key. I work in advertising and my husband works in finance. Despite those silly career choices we're not big spenders and really just looking to find a long-term home and not waste crazy amounts of money on several rounds of stamp duty with multiple moves.