Mortgage: What % of your salary is your mortgage?

[Gansy]

We want a bigger house and need to stay in the same area.
The 3 beds cost are avg £520k.
This is also the max me and DH could achieve with borrowing, but would mean repayment of £2300/month which is just under half of our combined incomes - 47% of salaries. After bills and childcare, it would leave £1.2k which would could manage. But wouldn’t leave a lot of wriggle for saving.

This question is for people who have a similar income, don’t have a lot of equity or are not on the ladder for a long time: how big a your mortgage?
is this high a mortgage common?
Is this manageable?

Between 30 and 40 % of take home pay. If you don’t have much wriggle room, fix for a good length of time. We’ve always fixed for major life stages- out of nursery, and now we are fixed until the kids are out of 6th form. Pay rises and reduced costs should give you breathing room over a 5 or 10 year fix.

Net salary? 33%. Single parent. Mortgage £1500 a month.

50% is very high and not considered a ‘safe’ amount

Mine is 17% but I contribute more to my pension, reducing my net pay, so if needed I could lower those pension contributions and free up a bit more.

30% and it often feels a squeeze.

Currently 25% of combined post tax income, due to go up to 33% but as children will shortly be out of paid childcare which is a further 25% of income will feel far better off!

25% mortgage and 25% savings would generally considered good. 50% on other bills, food, holidays etc. It's hard to achieve nowadays this balance given the cost of living

11% .

Thanks everyone for your replies, so far. It’s a bloomin slog, isn’t it? My hat off particularly to single parents.
We’re not long on the ladder - 6 years - so not a lot of equity built up. No ‘help’ to get on the ladder. Not a lot of people have.

It seems like people who are currently or were starting out are in a similar boat. It does feel risky, but we really need more space. I feel we’ve waited for 2 years for interest rates and prices to come down, but they’ve just gone up. Some houses in our area have come back on the market for £100k more… I feel if we wait around, and house prices continue to rocket, we’ll be left in our teeny terrace forevermore.

@ForPearlViper @hamstersarse @Itsmyopinion Thanks for this Great points there. I share those concerns, tbh.

@southenglandartist Same! Ours went up by £500. We had the hard luck of our 5year fixed ending just after Liz Truss worked her magic… but do

@MidnightPatrol I could earn more in my field, but I think that would be at the expense of time/quality of life. I have a 1yo, and not a lot of energy reserves to step up in a new role in all honesty.

@Doggymummar We’ve got an AIP ourselves and we’ve also recently gone to a mortgage advisor who did all the maths for us. They were confident this is what we could get. They said they could try for more, but it would go into the high risk/unlikely category em with their lenders. So I feel confident enough with this.

Thanks @shockeditellyou great points/advice.

Mortgage is 8% of monthly joint net income. We have overpaid and chosen to stay in a modest home as have other financial pressures. We could have upsized but decided to be mortgage free by 50 instead (4 years to go).

@LaurieFairyCake was this remortgage? Do you have a hefty salary, where you have a fair amount left over for bills/living or is it tight?

@twistyizzy That sounds great. If I could manage in our modest space I would.

@loveyorkshiredales its so hard right now.

Thanks all for your comments advice so far.

@Gansy it is hard. We are bursting at the seams and had a 15K extension added but to be honest we don't want to leave our village and the next step up is from a 180K house to a 600K one and we just couldn't justify it

Gansy

Not a remortgage, just rates have gone up and our salaries have dramatically reduced

Yes, it's very tight

Ours is currently around 20% of our current net income but we are on a really low rate at the moment.

A third thanks to Liz Truss.

I have extra income per month so this offsets it to around a fifth. If I was just on PAYE it would be okay, but not easy

Prices in my area are similar.
What about renting? Houses that would be 2.5k in mortgage are about 2.2 to rent here. Plus you can get interest on your equity while you wait and look around.

Somewhere just under 15%, but I'm giving up work shortly to be a SAHM so soon will be much higher :(

Our monthly mortgage payment is 10% of our combined salary. That said the loan to value is only 6%.

Our monthly mortgage payment is 2600, 40% of our take home pay. However, there's a substantial overpayment included in there that we could cancel at any time with no penalty. No childcare costs.
We manage fine but I wouldn't set that high of a payment up without knowing that we can easily reduce it if need be.

Currently 18% of net pay but it started off around a third, but I don’t feel any better off due to the cost of everything else increasing so much! I’m in a position now where I can see the end in sight of it and can afford to over pay.

31% of combined take home pay.

Would be 50% of just my take home pay.

I wanted to make sure I could afford it on my own.

I think % of income is not a great comparison as it depends how much you bring home and therefore have spare. It also depends if you’d be depleting savings and if you have a safety net of 6-12 months salary, in case either of you lose your job or become ill. My friends daughter was seriously ill and despite being able to take sick leave, she eventually had to go into UC to care for her and almost lost her house after spending all her savings on bills. We all hope we never end up in a position like that but if you’re almost maxed out in the best case scenario, it can cause a lot of worry in an emergency.

Would you be happy to have the house over more days out/experiences/holidays? You only need costs to go up and your savings will be limited for making memories. If you’re a homebody, this may be fine but I wouldn’t bank on rates dropping or pay rises to be able to afford this kind of thing.

I think quite a few people are in a similar boat at your stage of life. Think at one point our mortgage was about 40% which didn't seem too bad but then childcare was about the same (another 40% - twins - not much we could do about that !!) so we were really stretched. It was temporary though - we knew childcare would stop (well, drastically reduce) in a couple of years and income would go up and our jobs were relatively secure.

You’re right @Namechanged4obviousreasons
In retrospect I didn’t really know how to ask the right question. I guess it’s can a family a couple with 1 kid live on £1.2k monthly comfortably.

And what you described is a nightmare scenario which would finish us. I know people are in far worse circumstances, but just boggles my mind that combined we earn over £100k and our living situ is so so modest. Sigh.

@Africa2go my hat off to you. I was thinking the same thing for Childcare. We’ll be £700/month better off when they go to school. And hopefully I’ll have moved to a higher salary. Still, it’s risky.

@Goldpanther well played. Always good to know you can do it by yourself.

@Blue278 I have thought about doing this. Especially to get the house we’re sold, because it so cluttered with us living in it. but feel afraid that we’ll get stuck renting for perpetuity. I’ll give that more thought.

Similar price differential here @twistyizzy

thank you all for taking the time.

Moved last year and have a huge mortgage. 37% of combined net pay. Really hoping in a few years a slight reduction in interest rates along with small pay increases will take the edge off. I wouldn't go above that usually however we do have a plan B in case of emergency.