Could I ask what combined household salary....

[Imjustwonderingnow]

You have, gross per annum. Just out of interest, if you bought a house/living in your own home that cost between £1M and £1.2M? Know some factors will influence this like deposit.... But let's assume you've put down 20% to 30% deposit... and let's assume you nought it in the last 5 years and not decades ago for cheap and its NOW worth thst much....I'm asking as we can't agree snd DH thinks we'd over leverage ourselves but I think he's always risk averse. But maybe I should be too... please help me out if you wouldn't mind sharing??

There are far more variable outside household income when making decisions about how far you leverage yourself.

Your life stage, how well funded your pensioned and investments are, your industry, family position, location etc are all part of the formula.

Household income isn’t a good comparison here as lifestyle wants and other outgoings would influence the decision. How much disposable income would you have after mortgage, bills and other outgoings, and would that be enough for the lifestyle you want?

I appreciate that - I know its very individual but I'd just like some level of "oh wow I'm deluded" or opposite and the best starting point I think is income... from there I'm happy to adjust lifestyle and obviously we'd budget and work out beforehand but just curious. For context late 40s, no private school fees for DC heading off to college . No other major financial commitments such as nursery etc

Surely you need to

• estimate running costs
• work out how much you could afford to pay monthly
• see how that equates if interests rates are double now

So what is your combined household income? How much do you need to borrow and what are your outgoings? When are you planning to retire?

I don't get out of bed for a penny less than £11million a month.

What’s your net monthly income, what are your savings and pension looking like? Are you looking for a 25yr mortgage, or less as you're late 40s? What part of the country do you live in? What sort of lifestyle do you lead?

When we bought in that range our household income was around £350k. We put down a bigger deposit than 20-30% though.

We fit this bill.... what are your circs though?

The info you asked for isnt enough...

What is your income and what will your monthly payments be?
Running costs?

Got kids already? Or planning on them?

We have combined gross income of £250k-300k.
40% deposit on 1m house.
Monthly payments of 2.3k over 30 years.
No kids.

We are supreeeeemely fortunate that I insisted on 10 yr fix... without it we'd be fucked
Mortgsge would be 3.7k and with 2 kids on and our childcare is 5k pm !

because of the fix... basics to standstill are 8.5k-9.5k net depending on the month. Without it we wouldnt have a second child!!!

Theres no fat and few frills but we are fine.

Full context, we earn a bit less than this and have an accordingly cheaper property.

But - I think what you can borrow and what you should borrow are wildly different.

I wouldn’t be comfortable with a household income under 300k - assuming 50/50 split as salaried employees. More if salary is all coming from one person.

Why don’t you give us your situation then we can actually be helpful.

You're asking the wrong question, without providing enough information. I asked a similar question a couple of months ago, and posters advised against moving as we are mid 40s and have poor pensions, even though we have healthy investment portfolio.

By the laws of basic maths:
£1.2m purchase price
20% deposit = £240k
25year mortgage
Mortgage rate of just over 4% is a monthly repayment around £5150.
As a general rule your mortgage/rent shouldn't be more than a third of your net income, so at least £15k net per month.
Adjust calcs accordingly dependent on deposit/mortgage term in a basic mortgage calculator.

As PP have said, there are a lot of factors to consider. What my house is worth is irrelevant really, I think what you're asking is can you afford it?

The answer is to work out what your monthly mortgage payments will be then add up everything else you will have to pay for. The heating and electricity costs will be larger in a larger house and consider the insurance too. Our buildings insurance is over £200 a month for example.

Then look at your income and subtract one from the other.

Also consider whether you will want to pay school fees, whether you will be able to cope if you only have 1 salary, if interest rates rise etc.

Surely the house price is a red herring here? What matters is the mortgage cost vs your income. Our mortgage is about 20% of our combined net monthly income. Any more than 30-35% and I'd consider that too high, and buy a smaller house.

Also lifestyle expectations, is this £1M house small and in walking distance to work and other amenities or large and an expensive train ride away?

Also income security etc etc. Do you both earn a decent amount or is there one high earner.

If you're contractors or in sport or entertainment etc it's very different to something like NHS consultants.

I'd never take out a huge mortgage. Keep it manageable. I have a high value house but it's my third after a small flat to small house to big house and a little profit each time.

You’ve also got to consider your age im afraid. Taking on that size of mortgage at nearly fifty with potential ill health, longer tl get new jobs in redundancy, desire to retire etc. has to be considered.

id ensure you are factoring in really good income protection insurance, critical illness and life insurance and looking at all the exceptions.

This.

Please don't forget a larger house or a house in a more expensive area will come with additional costs on top of the huge mortgage.

Living well in a less expensive house is much more fun than living on constant panic in a big house.

Unless you are sure your circumstances will improve, in which case push it now if you can cover it easier later.

Thanks this is useful- I'll do some of these calculations and see....

OP I find your post confusing. What are you actually asking and what do you want to achieve?

I fear the reason you are so muddled is you don’t know. You want the big house without an understanding of what’s required. So in that basis I’m with DH.

However there are so many unknowns to be able to answer in any helpful way.

my question would always be, what happens if one of you looses your job or is unable to work?

Please also budget for maintenance and updates. As a general rule this is 2% annually if its value.

Don't think you will get a better answer than this.

It also depends how the income is split across two people. One person earning 300k a year vs 2 people earning 150k is different in terms of take home.

We bought a 1m property when we were both earning about 150k a year.

PPs are right though - you need to think about the mortgage affordability and also job security / back out plan if the shit hits the fan. We own other properties too so there is the option of selling one and paying off a big chunk of the mortgage, for example.

I paid the deposit on our £1.25m house and my DH took out a mortgage for the rest. But the actual figures aren’t going to really help you as everyone’s outgoings are different. For example, he was a high earner (£500k/year and paid £200k tax on that), but had four kids and paid alimony. Also as a partner in a law firm you have to buy in.
So just use the same affordability calculation whether it’s a £150k house or a £1.5m house.

Everyone I know in a million plus house is approaching retirement and have inherited over the years as well as been part of the property balloon. So effectively even if they boughe a million pound house now the cost of the 800k one they are selling probably didnt cost more than 400k.