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Original poster

First time buyers - Monthly payment seems huge!!

156 replies

Walterwhiteswifey · 14/03/2023 10:52

We currently rent a 3 bed for £1200 a month. We are in the south and trust me this is cheap! We have recently come into money, enough for a decent deposit but houses we want are around 500k.

Right move have mortgage calculators for properties we want, which estimate our monthly mortgage payments will be nearly 2k! Despite a sizeable deposit worth a quarter of the value of the house. Is this right? I'm so confused as I always thought renting was more expensive than owning but we would struggle to pay such a huge amount each month.

I find this all really daunting and annoying as we have such a large deposit but seems we can't afford the house we need.

OP posts:
bibbybox · 14/03/2023 17:22

with your income & deposit you will be able to afford that budget. Yes someone will say they earn 300k & have to budget for their £200 mortgage but let's be realistic prices are what they are.

bibbybox · 14/03/2023 17:23

I honestly don't know how people do it.

how did you get your 200k deposit?

Original poster
Walterwhiteswifey · 14/03/2023 17:29

Combination of savings, grandparents leaving me and my sister some money and the bank of mum and dad helping us. I appreciate we are lucky with that but we also worked hard to get good jobs. Well mostly my partner, but don't tell him that 😂

OP posts:
LookingOldTheseDays · 14/03/2023 17:37

Well there you go - that's how people do it.

Nowadays the vast majority of FTBs have at least some funding from inheritance and/or the BoM&D. These days, and particularly in the South East, a significant factor determining whether someone is able to buy property is whether their parents/grandparents owned property (and can therefore give them a financial leg up).

bibbybox · 14/03/2023 17:43

@Walterwhiteswifey but that's what most people who are buying too. I don't know anyone including myself in london who bought without help.

bibbybox · 14/03/2023 17:43

do

bibbybox · 14/03/2023 17:44

@LookingOldTheseDays it's shit for those who don't have help tbh.

Ineedaholidaynowplease · 14/03/2023 17:46

Appreciate renovations are expensive these days but depends on level of work you can do yourselves and if prepared to live in less than ideal situations. I agree at your age it makes sense to get a house rather than a flat but just saying if you're prepared to do some work may be able to get something cheaper.

I'm only 3 years older than you OP and bought Mt first house in my 30s too (just) so not someone who benefitted from previous housing booms nor am I that old that things have changed considerably. But we definitely got something cheaper because it hadn't been decorated for 25 years - we knew nothing about DIY but taught ourselves. As a result we're in a great position with our new house that we wouldn't have been in.

That being said, with a 40% deposit I wouldn't be too concerned about your affordability. It sounds like you're in a great position . Good luck.

bibbybox · 14/03/2023 17:51

do you want dc @Walterwhiteswifey ? think about the cost of those childcare, reduced hours

Bunnycat101 · 14/03/2023 17:53

Your numbers don’t seem quite right. Assuming you could get it re affordability, a 300k mortgage over 30 years at 5% would be £1600 a month and you could most likely get a lower interest with the deposit you have. Have you been getting quotes for short terms? At 34 you could probably go until 70 with some lenders, 65 with others. Yes you end up paying more with a long term but the monthly payments seem less daunting. We’ve always gone for as long a term as possible knowing we’d likely overpay (either through investing or directly to mortgage depending on interest rate).

RagzRebooted · 14/03/2023 18:18

Our affordability has gone down massively with the interest rate increase. We are hoping to be FTB next year, started looking middle of last year at how much we could afford. On a joint income of 70k, we could have easily paid a mortgage on a house that cost up to £280k (roughly £250k mortgage), now we're looking at only borrowing £200k. I have a spreadsheet with monthly payments on for different interest rates and different mortgage amounts, it's shocking how much difference a few % more interest makes. It doesn't sound like a lot when you look at 2%, 4%, 6% you think it will be a tiny difference, but it's hundreds.

Original poster
Walterwhiteswifey · 14/03/2023 18:21

Ineedaholidaynowplease · 14/03/2023 17:46

Appreciate renovations are expensive these days but depends on level of work you can do yourselves and if prepared to live in less than ideal situations. I agree at your age it makes sense to get a house rather than a flat but just saying if you're prepared to do some work may be able to get something cheaper.

I'm only 3 years older than you OP and bought Mt first house in my 30s too (just) so not someone who benefitted from previous housing booms nor am I that old that things have changed considerably. But we definitely got something cheaper because it hadn't been decorated for 25 years - we knew nothing about DIY but taught ourselves. As a result we're in a great position with our new house that we wouldn't have been in.

That being said, with a 40% deposit I wouldn't be too concerned about your affordability. It sounds like you're in a great position . Good luck.

That's very kind of you thank you. And very commendable teaching yourselves. I certainly think it's worth us looking into x

OP posts:
Original poster
Walterwhiteswifey · 14/03/2023 18:25

Bunnycat101 · 14/03/2023 17:53

Your numbers don’t seem quite right. Assuming you could get it re affordability, a 300k mortgage over 30 years at 5% would be £1600 a month and you could most likely get a lower interest with the deposit you have. Have you been getting quotes for short terms? At 34 you could probably go until 70 with some lenders, 65 with others. Yes you end up paying more with a long term but the monthly payments seem less daunting. We’ve always gone for as long a term as possible knowing we’d likely overpay (either through investing or directly to mortgage depending on interest rate).

On Rightmove.co.uk I did the repayment calculator. I did it over 25 years as that's what the default was. I need to do more homework I think!

OP posts:
Bunnycat101 · 14/03/2023 19:33

Look at the calculators on money saving expert. They are really good and you can plug in lots of variables including comparisons between different mortgages, overpayment calculators etc. The Rightmove one isn’t that helpful.

Original poster
Walterwhiteswifey · 14/03/2023 19:41

Bunnycat101 · 14/03/2023 19:33

Look at the calculators on money saving expert. They are really good and you can plug in lots of variables including comparisons between different mortgages, overpayment calculators etc. The Rightmove one isn’t that helpful.

I will definitely do that, thank you for your helpful reply 😊

OP posts:
Babooshka1990 · 14/03/2023 22:17

@LookingOldTheseDays do they? We had £0 help or inheritance and I’ve never felt that we were unusual. Miffed if everyone else is getting tens of thousands gifted to them! (Or hundreds in OP’s case 😦).

Designhelp · 14/03/2023 22:23

200k deposit (inheritance/BoM&D/high earning husband/good wages)
a golden position to be in but needs MN advice
500k + first home
It is like another universe on here

Some of us do it with zero help and I say that buying my second home 550k, no high earning dh (though he is currently pt/studying to increase earnings), no inheritance in sight except dh likely to get in the future.

LookingOldTheseDays · 14/03/2023 22:25

Babooshka1990 · 14/03/2023 22:17

@LookingOldTheseDays do they? We had £0 help or inheritance and I’ve never felt that we were unusual. Miffed if everyone else is getting tens of thousands gifted to them! (Or hundreds in OP’s case 😦).

These days it is very, very common, particularly in the south east, less so elsewhere. If you live in an area where an entry level flat/house is £400k plus, the deposit you need is enormous.

I saved my deposit myself, but that was years ago, and prices weren't as bad then (and I'm up north)

Babooshka1990 · 14/03/2023 22:36

@LookingOldTheseDays average 3 bed semi where I am in NW is 300-350 so not as high but it wasn’t easy to save that deposit! And stamp it’s (before reduction).

I suspect some of our friends have had gifted money but kept quiet about it as their finances don’t make sense otherwise.
I find it wrong that you can work so hard now, but security and lifestyle very much depends on inheritance/ wealthy parents!

Babooshka1990 · 14/03/2023 22:36

*duty

LookingOldTheseDays · 14/03/2023 22:42

I suspect some of our friends have had gifted money but kept quiet about it as their finances don’t make sense otherwise

I think a lot of people aren't upfront with their peers about exactly where their deposit came from!

ChilliBandit · 14/03/2023 22:51

We are millennials in the SE and didn’t have any financial help. We did have a whole heap of luck with buying and selling at the right time and it was sheer dumb luck with the timings rather than any foresight. Even then our current house which is about 900sq ft will likely be the home we stay in now. We can’t afford to go any further up the ladder without cutting back everything fun, despite bringing home just less than OPs household. We are happy in our house though.

bibbybox · 15/03/2023 01:41

do they? We had £0 help or inheritance and I’ve never felt that we were unusual. Miffed if everyone else is getting tens of thousands gifted to them! (Or hundreds in OP’s case 😦).

As I said I don't know anyone who did it without help. I also know plenty who had big help to move up the ladder too.

caringcarer · 15/03/2023 01:59

I'd definitely get a fixed rate mortgage because I think interest rates are still going to rise until inflation is more under control.

Myusernamehasgone13 · 15/03/2023 03:33

So you are on 90k income a year with recently acquired inheritance/investment money.

You have only 25% deposit?

You need to check your outgoings before you even commit to buy your own!

You will need to consider insurance and maintenance costs + sinking fund for big expenses like windows, roof or boiler. Also if you have kids then count that in as well before you take big risk.