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Original poster

Monthly mortgage on single salary WWYD

23 replies

ArtOfTheImpossible · 09/02/2022 16:20

First time buyer here, looking at 2 options

House 1
Monthly take home pay is about £2400
Monthly mortgage payment about £830
(according to mortgage advisor, the lowest they can find)
Which I think is about 35% of salary

£60k deposit with £12k for fees/still in savings or
£65k deposit with £7k for fees/still in savings

This is 30 years (age 40 to 70), 5 year term
On A Victorian detached in good condition (I would get a full survey). Massive garden. Loads storage space.

House 2
£530 monthly mortgage payment
On a newer build, about 15 years old

In terms of our outgoings (me plus a child under 10):
Currently spending £560/month on rent for tiny property.
No debt
Monthly outgoings are nothing lavish - the usual household bills.
Paying for school dinners and few clubs for child
Mostly buying clothes second hand
We go camping for holidays, £400-500 twice a year
So a pretty frugal lifestyle

At the moment I save £500+every month, sometimes £800

Looking back in MN advice I can see people being advised back in 2018 that 1) interest rates can and will only go up and 2) housing prices are at their peak and about to crash, you will sell at a loss don't do it etc. When the opposite happened.

WWYD.. appreciate any advice here I've never bought a house before!

OP posts:
Bringsexyback · 09/02/2022 16:28

This is not a popular opinion however I think that you should buy the biggest best property that you can possibly afford today. Once you have the keys it is very difficult for a mortgage lender To repossess a house, they have to jump through all sorts of hoops which is why it’s harder to get Mortgage now as well of course. As an example I don’t want to give too much away personally I didn’t pay a penny towards my mortgage for a year once and repossession proceedings hadn’t even started, so with that in mind what are the chances of your position changing so badly that you could not pay a single penny towards the mortgage ?

I fully intend to max myself out in two years time when I will be 50 on the basis that as long as I make some sort of contribution towards that property I will not be repossessed and I will always be in a better position than I am renting and when I pop my cloggs, they can have back whatever arrears are on that Mortgage then cant they.

coodawoodashooda · 09/02/2022 16:28

Id get the second one. The big garden puts me off the first.

anothersmahedmug · 09/02/2022 17:01

Which do you prefer
Location?

SollaSollew · 09/02/2022 17:14

I would go with property 1 for two reasons:

  1. Because I suspect that if you actually really liked the second house it would be a no-brainer so you wouldn't even need to ask
  2. (with the standard disclaimers that I'm not a FA and no one knows what will happen in the future) History would show that property is a very solid long term investment so you may as well maximise that investment.
Maestrog · 09/02/2022 17:46

House 1 sounds affordable on the mortgage alone but the upkeep costs, heating costs and time you'd need to spend on the garden & maintenance would all be significantly more. You might find yourself obliged to spend many thousands on very boring things like floors and roofs. But I am very risk averse and I've just spent a lot on a new roof!

I'd prefer a house in a similar budget to House 1 but more modern.

PearPickingPorky · 09/02/2022 17:49

House 1.

If you can save 500-800 a month, then you can easily absorb the extra per month of the bigger mortgage, and still have enough of a cushion for any unexpected bills.

INeedNewShoes · 09/02/2022 17:53

Option 1 sounds affordable to me and I agree with the pp who said a little stretch is worth it.

pencilsdance · 09/02/2022 18:10

House 1 if you can afford it factoring bills and interest rates

Champagneforeveryone · 09/02/2022 18:21

We've been in a slightly similar position, the difference in house price for us is because we are currently living in a very expensive area.

We've agonised over the situation and eventually decided to move away (all of about 15 miles!) and have the lower payments. I have to say, once the decision was made I realised how much the financial strain of the higher mortgage had been preying on my mind. This way we can go away on holiday, go out for meals / drinks, still save comfortably and even overpay on the mortgage.

When written down like that it seems inconceivable that we were so undecided Hmm

TrueBuys · 09/02/2022 18:46

House 1 sounds better. You sound sensible with money and hopefully may also get payrises over the years, if you get a 5 year fixed rate mortgage then you know your cost is fixed?

TheNoonBell · 09/02/2022 19:21

House 1, although keep in mind bigger place means more bills and higher council tax.

It does not look likely house prices will crash in relative terms if inflation keeps going. There are a lot more £££ sloshing around than ever before and more being printed every day so the price of everything is not to going down for long.

Original poster
ArtOfTheImpossible · 09/02/2022 19:22

Thank you. A pp is right in guessing I do like House 1 more because it has more space. However on the downside I've never had a house so low on DIY skills and there would be more to do.

OP posts:
Starseeking · 09/02/2022 19:33

In your shoes, I'd go for House 1.

I'd also be thinking of ways to increase/maximise my income to put more distance between the mortgage payments and the amount you have to put into savings. I'd also put the deposit of £60k rather than £65k, so you've good a good buffer to start off with.

Regarding DIY, buy a decent toolkit and drill, and watch lots of YouTube! I previously had a useless DP who refused to do any DIY (I did the majority of everything else in the house), so in the end, I started doing basic jobs myself. It's very very satisfying once you get into it and complete the work.

Kite22 · 09/02/2022 19:34

@SollaSollew makes an excellent point.

If you liked the two houses equally, then it would be a no brainer but to go for the cheaper one.
So what you are really asking is "Can I afford House one?"

M0RVEN · 09/02/2022 19:37

How many bedrooms in house 1 ? Could you take in a lodger if you needed help to pay the mortgage?

You can get up to £7,500 without paying any tax.

turnitonandoffagain · 09/02/2022 19:45

If your job is relatively secure I'd go for the first one. You've got to live somewhere. Living where you want to be is a nice feeling.

Single parent here with a £1300 pm mortgage payment which is roughly the same % of monthly salary as you.

Buy the one you would like to live in the most. I consider my house my biggest luxury, in that I could downsize/live somewhere that would cost me half as much. It is also an investment as I see my mortgage balance reduce every month. Balance reduces by about 75% of my mortgage payment which means that I see it as saving up for the future/downsizing.

Fix your mortgage for as long as you can. It doesn't matter if it takes you a few years to get it where you want it to be inside if you are planning on being there long term.

coodawoodashooda · 09/02/2022 19:51

@Bringsexyback

This is not a popular opinion however I think that you should buy the biggest best property that you can possibly afford today. Once you have the keys it is very difficult for a mortgage lender To repossess a house, they have to jump through all sorts of hoops which is why it’s harder to get Mortgage now as well of course. As an example I don’t want to give too much away personally I didn’t pay a penny towards my mortgage for a year once and repossession proceedings hadn’t even started, so with that in mind what are the chances of your position changing so badly that you could not pay a single penny towards the mortgage ? I fully intend to max myself out in two years time when I will be 50 on the basis that as long as I make some sort of contribution towards that property I will not be repossessed and I will always be in a better position than I am renting and when I pop my cloggs, they can have back whatever arrears are on that Mortgage then cant they.
Is that not an incredibly stressful lifestyle?
coodawoodashooda · 09/02/2022 19:53

@ArtOfTheImpossible

Thank you. A pp is right in guessing I do like House 1 more because it has more space. However on the downside I've never had a house so low on DIY skills and there would be more to do.
I've had loads of help to do up my house but even with the maintenance it is very frustrating and lonely to do these jobs at times anyway.
Didiusfalco · 09/02/2022 19:56

Is there a house 3 that is somewhere between these two options. I wouldn’t want to do house one at the moment, it’s old, will be expensive to heat and interest rates are only going one way. I don’t think it gives you enough breathing room.

MakingProgress2022 · 09/02/2022 19:57

I am you. I went for House 1 at the same stage of life.

Every day I think at some point how much I love my house. Despite thr DIY frustrations etc. I have given my kids some happy years in a house we all love. It’s been worth it for that.

Kite22 · 09/02/2022 20:08

I do advocate going for the biggest and the best when buying BUT I wouldn't want to be taking on a mortgage that won't be paid off until I am 70.

I'm not quite 60 yet and counting doen / working out when I can afford to retire.
I mean, I realise it will depend on your job, but physically and mentally a lot of jobs are hard once you get into your 60s.
OTOH - maybe you are on a career structure that means you know you will get some decent salary increases in the next few years and be able to pay it off early ?
If it were just you, then you could keep the lodger route as a possibility, but I think it is quite different with your dc in the house.

As a pp said, is there an 'in between' option?
Needing to be paying a mortgage at 69 isn't an appealing thought, when you have the option not to.

tresleches · 09/02/2022 20:08

I was a single income first time buyer a year ago, salary similar to yours and mortgage £720 a month. It's a cliche but I don't know where my salary goes - great at scrimping due to saving up deposit, similar frugal lifestyle, basic bills, etc. There's always something to sort or improve (and I mean basic things - coat hooks, fixing tiles, decorating) and perhaps being single parent puts extra pressure on to make it "nice" now it's a proper home.

Agree with PP about whether there is an in-between? And if it's likely your salary will increase in the next few years? And would (for example) your holiday preferences change if you had more disposable income, as your child gets older?

But if it's between these two, I err on the side of "buy the one you actually want", esp as an older first time buyer as you'll probably stay there for a while and not play the property ladder game.

shouldhavewouldhave · 09/02/2022 23:55

Buy the first house you haven't mentioned square meters but I assume it's much bigger.
You can always get a lodger if you need too as some stage - don't forget inflation eats away at mortgage payments and your income is likely to increase with age.

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