What mortgage payment would you be happy with?

[movinghousequestion]

Hey all, I've name changed for this one. Hoping to get some outside opinions please! I've rounded these figures a little but it's roughly accurate.

Take home pay £4320 (single income family, I'm a SAHM mum so no childcare costs, 2 young kids)

Current mortgage of £879.

Our bills, subscriptions, fuel and food bill comes to £1560.

We have about £700-£750 spending money per month.

We put £100 into a family fund to pay for kids clothes and things

We save £1000 although this money has been going towards home improvements as of late but this is the amount we can save from now on.

We have an emergency fund.

In our shoes what's the max mortgage payment you'd be comfortable with?

We are looking to move house and very cautious with money so wondering what's realistic in terms of how much we stretch ourselves.

Thank you!

If you are able to save £1000, it's how much of that would you be prepared to divert to mortgage payment. Maybe half of that? So £1300 - £1400 ? But really depends how much you need to spend to get the property you want, and multiple possible factors that might mean you would spend more or less.

Prob £1500 after reviewing subscriptions and reducing savings. The costs of kid's activities dramatically increases as they get older, but assuming you're heading back to work that'd be a very safe amount.

They say that around max 20% of net take home pay is about right for a mortgage and you're at that already with your existing mortgage. That said, I think in recent times that has pushed up a bit but that's not a good thing really.
Are you funding a pension? That's an important thing to consider.
If that £1000 is genuinely 'spare' and going into savings after all necessary spends then you could probably push your mortgage up to £1000-£1200.

Around £1000 from that take home pay. Life is expensive!

Single income I would not risk a higher mortgage.

Will you be going back to work?

How much is your emergency fund? 12 x monthly wage so 50k?

Were looking at increasing but have a joint income of £7k a month but have childcare fees. We’re comfortable to double our mortgage to £2k but with that all the other bills will increase by £300 a month. That’s the max we’d like (at the same time we have a DC starting school so have some childcare fee savings on the horizon)

Things to ask yourself
If the worker lost their job do you have a 6month fund to cover / anticipate can get another job within this time frame
With a bigger house other bills will increase, how would that impact

I try to follow the 50/30/20 rule so no more than 50% on all bills / non negotiables.

if you could do an extra £3/400 that would be doable on paper if you took the saves out.

would be interesting to hear others.

You’d have to take into account increases in other expenses as well (assuming you’re moving to a bigger/more expensive house). Council tax increase. Possible increase in utility bills. Increase in life/critical illness cover with a bigger mortgage. Really it depends how much of the savings you’d sacrifice, and if you’re planning to return to work.

Everything goes up with a bigger house remember!

We have 4300 coming in so very similar
Mortgage is1200 but all bills come to around 2500 including 3 days' nursery for two kids. Pretty sure the mortgage will go up this year as we're due to renew half of it in October

It feels tight to me - holidays are sparse, we try putting money aside but it's usually short term savings like car repairs rather than long term. We do have pensions going out pre tax so not included in that take home

I think on that take home income I wouldn’t go higher than about £1000. Your current savings amount is good but as you know it can get swallowed easily with home improvements and anything big that needs doing. What about savings for your DCs and pension for yourself, are they sorted every month? Also money for holidays, children’s extracurricular activities as they get older, school trips.

I wouldn't go much higher than you have now - maybe by £1-200 at a push.

When we last moved I was also still a sahm so there would be no dropping costs like nursery fees. Clothes and shoes for children become more expensive as they age. They also eat more food and once school starts there are things like swimming lessons, dance, ballet, football or any other clubs or sports so all these budgets would have to increase and I wouldn't be returning to work due to disability. Generally speaking everything goes up in cost too, Council Tax, gas and electric, water in terms of just price but also in a larger house more rooms to heat etc.

What we did was reset our mortgage term back to 25 years but this does depend on your partner's age. We also spent no where near what the bank was willing to lend us, instead we looked for a house with the number of bedrooms we wanted within a certain distance to primary and secondary schools in the area. My children were already in the primary so we had to factor in that daily school run by me. We reversed Rightmove search results to low to high rather than look at what was at the top end of the budget.

In all honesty? It is better to have a good amount of disposable income so given your figure I would say no more than £1200 and I would aim for less. There is nothing more miserable than having a house you need or want to do work to and not having the money because it is meant to be your sanctuary from the world.

We always did 1/3 rd of take home.

1/3 is the norm but MNs is very conservative in general on these questions but presumably lots of people are older & things are different now in terms of costs both mortgages & rents. Plus you’ll get a few we earn 10k but feel stretched with a 1k mortgage responses. I would be cautious as you only have one salary coming in unless you can easily get back into a career asap should circumstances arise.

25-30% of take home imo. My mortgage is 27% of take home pay. Single parent to two young adult DC. I’m fairly comfortable financially with that.

Again I’m quite cautious and I think on that income £1000/£1100 would be as much as I’d want to pay.
Much better to have a buffer for home improvements/holidays/ illness/ uni costs.
Id love a bigger house than we have but ours is sufficient and it means we don’t have to worry if something breaks or there’s a school trip etc. It also means we can have a comfortable lifestyle and enjoy theatre trips or a meal out without leaving us short.
As pp’s have said children do become more expensive clothes, food etc. It’s also nice not panicking as the electric/ gas prices rise. It’s annoying but at least we know we will still be comfortable just back on other things slightly .

Our joint income is just under £4900 a month, with a mortgage at £1218 and it feels tight. There's four of us, but DSS is 16 and spending a lot more time at his mum lately so really closer to working out utilities as a 3 person household (he takes very long showers so the water and heating bill has gone down a lot lately - he lived full time with us until recently 😂) we do have three cats who seem to cost us a lot of money on a monthly basis just to maintain them.
Cars fully paid off for now, no childcare fees as DD started school and is at the same school DH works at.
It feels tight, we never seem to have enough money to save for the future, only short term things, we need a new car and a new bathroom and I'm struggling to see how we afford both as we need to borrow the money 😫.
We were super cautious too, our mortgage is less than 2.5 our annual income, loads of equity, but we had to remortgage last year at the peak of the interest rates and despite all our planning we didn't expect them to rise by quite so much.
Our mortgage was initially under £1k and that was so much more manageable but sadly those days are probably gone forever now. I wouldn't change anything (I love our house and it's perfect for us) but I do wish our mortgage was lower.

We have your income and have stretched ourselves to a £1450 mortgage, bills are more expensive too as our council tax and utilities are more since we went from a small 3 bed semi to a 4 bed detatched. It's tight but doable.

I also only work 2 days a week but my only child started reception in Sept so I'm currently looking for a job with more hours.

Will you go back to work when the kids start school? If that's the case you can factor that in, we felt well it may be tight short term but our incomes will probably increase in the medium term. We have no other debt, a decent safety net of savings, also over 50% equity.

Personally wouldn't want it much more than £1000 tbh to have a comfortable lifestyle, but if there's scope for you to go back to work in future and/or your DH's wages to go up it's worth taking a bit of a risk for the right house.

Thanks for all responses, given us a lot to think about! We want this to be a long term house, potentially forever home so lots to consider and makes me feel stretching ourselves a bit for a couple of years may be worth it.

I will go back to work at least part time when both kids in school which is in about 2.5 years. It would hopefully be a job that fitted around the kids. My husband gets a 3-5% pay rise every year too and is hoping to progress further in his career in the future.