Londoners - dare I ask what your monthly repayments are?

[Ilovesnacks]

Not trying to be intrusive. DH and I are doing some life planning and part of that is budgeting whether we can afford to move and renovate. I've lost the plot of what is 'normal' in terms of monthly repayments, possible because we've been lucky to be on a low rate for so long. We are paying £1500 a month for a 3 bed victorian cottage in zone 3/4. Its getting a bit small but to renovate and move, in a few years that monthly amount will be more like £3,500.

I'd be curious to know what your repayments are (or at least, a percentage of your income) and how many kids you have.
Asking with Londoners in mind rather than anyone as obviously this city warps things!

8k a month is a fifth of your take home pay but you’re on an interest only mortgage?

Yes, we’ll pay the principal off from investments at some point or by selling one of our homes,

Why do you think this is unusual?

@Mummyme87 Yes similar situation. We have 2 DC and still have 21 years left. When your repayments go up £500 are you planning on downsizing (wasn't sure if that's your reason for moving) or are you planning on making any adjustments to lifestyle costs, e.g. no holidays.

@DailyEnergyCrisis Thanks. So that's about 28% of your monthly joint income in housing. That's kind of where we're at now. Thinking about moving but would mean we'd then be using 38% of our monthly as housing cost. Can't decide if that's going to be a squeeze.

This study is so fascinating. Quite varied responses...

😮

Blimey - this thread is an eye opener. We are paying £925 per month for a three (really 2.5)-bed maisonette in zone 2. Thought our repayments were high, but clearly not the case! Our joint income is considerably lower than some other posters though.

1200 three bed zone 5. This cheap for London but income is 5300 a month. Conservative approach as single parent.

Yeah @bookworm14 I'm trying to view them all as what percentage of your overall income are you paying for housing costs. That seems to be an easier yardstick in which to decide if we are insane/ lucky. Online advice seems to be don't go over 35 - 45% max of your total income being spent on housing.

1,600 for a 5 bed house in zone 2, but we bought in 2012 and the house was a wreck then.

And as a proportion of overall income.... Joint take home is just over £6k a month. Mortgage 1,600. Until last week we had a grand of nursery fees a month though. Now no nursery fees or school fees.

I have never heard of anyone who has an 8k a month interest only mortgage. Especially if they take home pay is in excess of £40,000 a month and as it transpires they have other assets / investments by which that debt could be eradicated.

Don’t suppose I am the only one 😊

In that case, our new monthly payments (original mortgage + additional borrowing for building work) is 20% of our combined net take home.

its 15% of combined take home pay for now, due to rise to 22%. zone 3 but small 2 bed flat.

I know its hard in London but personally i don't feel i should spend more than 4.5 times combined income for the whole purchase price (including at least 15% deposit) so that is around £550k (rounded up). Our first (and current) flat was 5.2 times combined income (bought for £392k) but at that time our salaries were low so had a lot of scope to increase (due to being in first jobs). the value is currently 3.3 times our combined income (mortgage is 2.3 times combined income).

I know in my home country which has state subsidized housing, the government tries very hard to keep the median price of a government flat to be 4 X median income (currently 4.4 times). So in a fully private market like the UK (so you inevitably have to stretch a little), I think not going beyond 5 x is a good rule of thumb despite market conditions. Of course, one should also factor commuting costs into the mortgage cos for two people commuting from zone 6, it could easily be £600 a month which actually is almost like second mortgage, even moreso if in the Home Counties. So not completely black and white in terms of income multiples.

I think this is good advice in general, but less important the more you earn. I.e. if you earn 15k a month but spend 7.5k on mortgage, that is high and 50% - but you do still have 7.5k to live on. Whereas if you're at 50% at 2k a month, living on 1k is more challenging

Our mortgage feels very high! But it is 25% of salary so I guess its reasonable, it was just 3% less interest before the rates changed!

@Ilovesnacks no we are moving area (West Sussex commuter town) and upsizing a little (extra bedroom and reception room ideally). We could survive the extra £500 in repayments just about, but im encouraging DH to increase the term by a couple of years to reduce the increase a little. He’s just desperate to pay the mortgage off because that’s the done thing in his work place, and historically was possible. He’s expecting a lump sum next year from work which we will throw some of at the mortgage

We rent and pay £3100 for a 4 bed semi in Bath- ironically we could easily pay a £500k mortgage and a 10% deposit- but as we are 59 and 61 we can't get a mortgage like that and have only been in this position in last 6 or 7 years and I bet there are many like us too.

If the old 'self declare' mortgages were available we would have been able to do that- would then have sold up in maybe 10 years or so and bought something smaller outright . As it is it looks like we will do so on inheritance .

2k per month 4 bed semi zone 6. Was paying 1200, rates went up so would have cost us 1550 so added extra to build the 4th bedroom. Cheaper than finding an additional 150k to buy a ready made 4 bed.

£1060/month having fixed at recently for 5 years. 3 bed semi in zone 5. Joint income £170k gross. We have overpaid quite a bit since we bought 4 years ago and plan to continue despite nursery fees for another 3 years.

4 bed terrace. Zone 3 south east London. 2 primary age kids. Mortgage £1800pm (came off a fixed rate earlier this year was £1300 before that). Joint income £150k pa.

Yes that's true, we blithely accept travel costs as a sunk cost but of course - £800 pcm is another mortgage..!

The people i know who moved out of London with London jobs and accepted the travel costs almost all have DC and are getting free childcare(at least 2 days a week) from nearby grandparents. So that balances it out somewhat given how expensive childcare is. My MIL lives in London though so that would literally be a sunk cost...

Even in blackpool, the childcare is reportedly £1k a month full time for a child below 3 so in the uk, there appears to be a very high base cost even in cheap areas...

£2,500 interest only on a 4-bed Edwardian semi in SW London (Zone 3).

£2k, four years left on a fix, it’s about 30% of take home pay. I def wouldn’t want to be paying more

Moved house, planning a big extension, about 7 grand.

Wow so interesting to see, I guess since so many households make 100-200k, that explains houses prices in London.