Household income (after tax) vs mortgage

[PropertyLookout]

I’m 28, DH is 34….2 kids 3y/o and 5 month old

Current situation: H/hold income £4,900 vs £580 mortgage (16 yrs left)

Looking to upsize: £4,900 income vs £1,350 (30 years)

We would be upsizing from a small 3 bed semi to a 4 bed detached in a nicer area with better school prospects and great links to 2 big cities (thinking job opportunities for when DC are older). The financial jump seems daunting!!! We want to see what everyone else is doing.

Is this a normal income to mortgage ratio? Whats yours? (If you’re happy to share) I’m looking to be talked into it….or out of it :)

I would say it’s a squeeze but totally doable especially if your earning potential is likely to increase and outgoings go down (youngest childcare) then it’s short term pain for long term gain. For ref we have a £1300 mortgage, 2 kids (1 still in childcare) on approx. £6500 income and it feels comfortable enough that we can save some money too.

Seems fine to me. Presumably your childcare costs will go down when kids are school age. Ours was around 6k household income/2k mortgage (but paid off now due to unexpected inheritance). Only you know your outgoings and other expenses - make a totally honest list and include EVERYTHING. And then review what you can cut back on if push comes to shove.
are you in safe jobs? In jobs where you can reasonably expect pay rises and promotions in the next 5-10 years?

Your childcare costs will dictate how tight it is. After bills and food you should have about 2k left, which is plenty for having a nice lifestyle and covering one off costs. However if 1k of that is going on childcare then it might be a bit tight for a while, but worth it if the house change is significantly better.

Our mortgage is 13% of our monthly income and I wouldn't want to increase it further. Mostly because this allows us to save a great deal and we have long term plans for the savings. Plus, we already live in a house that suits our needs. Also, our rate is very low (fixed before the rates shot up) so it may increase when we remortgage in 3 years.
If we didn't have a house that suits us, I might be willing to consider increasing the % we spend on the mortgage but would want a good buffer in case of further interest rate increases.

£6500 income vs £1900 mortgage.

What people can afford is personal. We have no loans, no debts, no expensive subscriptions, so for us it’s fine. For people up to the eyeballs in debt, our mortgage would be too much.

30 years would be too long for me. You’ll be paying a huge amount of interest.

If you can only afford it over 30 years, you can't afford it

Ok our mortgage is very similar to what you are looking at but our income is £6800. We have high childcare fees, so if you don’t have childcare to pay then it is doable, but if you do then I think that’s quite high for your income.

Disagree. Paying off your mortgage by aged 58 is better than many people can manage.

Oh give over! A 30 year mortgage is fairly standard.

Mortgage should be 3rd of earnings MAX so all good

This will get worse for the next generation.

@Footsontheotherboot I only know one person with a 30 year mortgage, most people do 25 as standard but okay!

Personally, I'd be comfortable going up to 25% of income for a mortgage but no more than that.

Agree. A few of my friends did this to make it cheaper at the beginning. Then remortgaged and reduced the term. We reduced ours from 25yrs to 12yrs in the 7yrs we’ve been here.

£7.5K a month income, £550 mortgage.

Personally, I'd be uncomfortable if my take-home was only 3x my mortgage - particularly with kids given childcare costs (but also the general cost of things increasing) - but I am incredibly risk-averse financially.

Utter nonsense.

I think a 30 year mortgage when one of you is 34 is nuts. It is likely at some point during that 30 years one or both of you will suffer bad health or unemployment so factor that in.
If your income is likely to increase and you are prepared to downsize if needs be it might be worth the risk.

Same joint income as you and our mortgage is £1200 with a one and three year old.

It's been fine but also we don't have a particularly lavish lifestyle, we do DIY rather than pay for trades, I'm fairly thrifty naturally anyway.

The way I see it, our salaries will go up and the childcare costs will come down (yes I know teenagers are expensive but I mean nursery etc) and we can start to over pay

Obviously early years childcare is expensive but it doesn’t end there. If both working there are holiday clubs till high school. Then the teen years which aren’t cheap. Then they need to learn to drive and be supported through university. All of that will fall within those 30 years.

We have around £5.8k a month and pay a mortgage of £1400. We still save a fair bit but don't Iive a lavish lifestyle or have to pay any childcare. We originally had a 30 year mortgage but it's amazing how quickly that can come down if you overpay a little or lump sum at the end of the term.

It really depends what you spend on each month, I agree write it down and be honest with yourself. You should know if you can afford it, everyone is so different in how they live and what extras they get.

Very similar numbers here, we were reluctant to do it but it made so much sense for schools etc
Now childcare is reducing and we're careful on other spending it's absolutely fine! I say do it

£7000 income; £2250 mortgage. It feels higher but it is manageable

Do you ask everyone you know how long their mortgage is?!

Most people upgrading after the interest rates went up will be doing it by extended their mortgage term.

We bring in roughly £4500 pcm earnings between us, then receive child benefit on top (and DLA for one child, but I prefer not to count it as income for mortgage as it's not guaranteed for long).

We pay £1600 a month. Which is fine, because it's what we had to pay in rent anyway.

However, we do not have any childcare costs anymore (DC all secondary aged) which makes a huge difference to affordability.