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?

When we bought our previous house we were spending around 70% of our combined net pay on the mortgage. It was a struggle and we lived frugally for a few years, but it was worth it. Interest rates were at their very peak when we first bought the house and we thought it was very unlikely they would rise further; we also knew that our salaries would rise as well as the value of the house !

20% ish. My pay has gone up a bit in the few years since so would have been a bit higher to start off. But am also a single buyer buying a 1 bed flat with relatively total loan amount (relative to the likes of 2/3+ bed houses obviously!) and was able to lock in a fixed rate for 5 years before things went really crazy which kept it quite affordable and could only be approved for a long mortgage term length all of which would have made the monthly payments a bit less relative to salary.

@Growlybear83 please just say no if TMI. But what was your household budget after mortgage/bills?

Less than 10% of our combined nett income, though will go up when favourable rate ends next year.

25% of our combined net, we overpay another 5% so commit 30% monthly. We’ve never borrowed more than the old 3.5 times combined gross income calculation, although I appreciate that’s a lot harder to do now.

Agree that the percent is a bit meaningless, as I'd rather be earning £10k a month and spending 50% of that on a mortgage than earning £2k and spending 20%! It also really depends on other fixed costs like cars, childcare etc, and whether your salary is likely to rise much.

Ours is currently 20% and I wouldn't want to go much higher but we're paying a lot in childcare and neither of us is likely to get much of a pay rise ever now as we're pretty much at the top of likely salary bands.

0% now, but previously 25-37% .

Ours is about 26% and it feels hard sometimes if a lot of other things happen at once. We upgraded a few years ago so this was a bit of a stretch for us so we didn't have much left in savings. We have been trying to catch back up but the interest rates plus lots of extra house expenses with a bigger space plus kids getting bigger means we aren't there yet.

We are in a fortunate position of both working full time so we can afford the mortgage on either of our salaries for a little while if something happens. We didn't take out anywhere near what we were approved for as that felt like way too much each month.

17% of take home pay

I'd only take that on if I thought my salary would grow a lot in the next few years.

With new job expecting it to be 50%. Seems mad

Does bills include good, school meals etc. 1.2k does not go very far when you have unforeseen costs ie boiler breaks, roof leaks.

It includes food and childcare, but not school meals. They’re not old enough. But defs take your point. It wouldn’t be enough.

Thanks all for your help thinking this through. I think we’re going to be staying put for some time…

I don’t think knowing the % everyone else pays for their mortgage is very helpful. If someone spends 50% of their £6,000 income on their mortgage this leaves them wirh £3,000 which is plenty for bills, non-essentials and savings. But if someone pays 50% of a £1,600 income then this only leaves them wirh £800 for bills, food etc which is not enough.

the decision has to be made based on a simple budget sheet. From your salaries deduct:

• mortgage
• all bills
• food (realistic costs, check your bank statement for the past few months for actual costs)
• travel (including irregular travel)
• any other expenses that are incurred in a the course of a year (haircuts, hygienist, gifts, clothes etc)
• something left for emergencies

A budget sheet has to be sustainable and people tend to underestimate what they spent.

To be honest, it was a number of years ago and I really can't remember the amount we had left. But we were fairly skint for a long time - we hardly went out for two or three years, didn't have holidays, and did almost all of the renovations that were needed to the house ourselves. But we didn't have a car when we first moved to that house and also didn't have children until we moved to our current house, so didn't have some of the expenses that many other people have on this thread. We also had an endowment mortgage, which at the time was more expensive than a repayment mortgage.

Mine is 44%. It's tough.

Ours is a lot lower but it's a pointless comparable as we're older, been on property ladder for years and we're passed the childcare years
The percentage of income thing shocks people but that's how it is now. High property prices, high COL, high childcare costs, stagnant wages. It does sound a lot but you have a good joint income and seem to have a good amount left.
Like you say, once the childcare costs end and you are earning more things will be easier.
In the past 3 years our monthly disposable income has increased by about £1500 poss more due to no more childcare, husband starting a better paid job and me increasing my hours.
Things are now far more comfortable for us and we allow more money for our annual holiday and we save quite a lot too.
It all depends on what sort of life you lead. I don't spend much on myself as in hair, clothes etc and just not into it.
We aren't ones to eat out a lot or spend money on coffees etc.
Most of our cash goes on food and the kids, clothes, clubs etc.
What exactly does your disposable income need to cover?

Other things to think about are, do you plan to have more children?
In terms of what your mortgage is now and what it will be, are you saving this sort of amount or is it getting spent?
This is a good indication of whether it is doable or not

Ours is about 35% since the interest rate increase, it would be manageable but the house needs alot of work so saving a large chunk each month for that ontop and supporting DD through university. Definitely manable however feels tight most months

Ours is 8%. We're 40 and 42. I know that's unusually low. We refurbished 3 houses in a row and relocated to somewhere where we knew noone to ensure we could have a mortgage that small.
Nearly 50% would be too much for me. I've always believed 30% to be a sensible upper limit.
Although I know with house prices being what they are now, it's not always possible to choose.

25% of joint. Our house is far too small but a higher percentage would be too scary for me. We can't seem to save as it is (that's a whole other thread)

Just before we paid ours off, it was about 5% of our take home pay-we were lucky and managed to buy ages ago when things were so much cheaper. I totally empathise and really worry for my kids though :(

Can you do some stress testing to see what things would look like if the interest rates went up or one of you lost your job?

Have a pretty much identical income and our mortgage is about 18%. (In the South-east).

I wouldn't feel comfortable stretching ourselves that much and we are prioritising saving to pay off our mortgage in the next eight years rather than extending ourselves further.

10% of joint income. But we have high school fees to pay on top of this.

Currently 19%, moving in a month and will become 29%.