Mortgage v take home pay

truescot

More info:

Salary 37-40k (not including part time self -employed wife). One 2yo child with one on way, 1 car, no smokers. Current mortgage payment £480 but new house anything between £800 and £1100. Does this help??!!

Judging by the replies so far, 17% is a bit low and 44% might be tight. Wife will be going back to work in next 2 to 3 years.

Angel555

36% at the moment - currently have a 95% mortgage that is fixed until june 09. keeping fingers crossed that things improve

jamesd

Work out your minimum monthly spend on non-housing costs. Include all food, gas, electricity, holidays, TV Licence, car and other transport costs. Don't include current mortgage, council tax, rates (unless usage-based as water might be). Then subtract that from your take-home pay to get your free money budget. The mortgage and housing-related costs has to comfortably fit in that with safety margin.

It looks as though you will be OK. What you might usefully do is start out interest only and overpay voluntarily. That way you have the flexibility to drop back to just the interest only part or somewhere in the middle if it feels too tight. Over a few years inflation and wage increases will make the cost of the mortgage compared to wages lower and increase the free money difference you have and make it easier to handle. The prospect of your wife returning to work also argues in favour of it being fine to start out interest only and use the flexibility and catch up later rather than cutting it too tight immediately.

Miles16v

Was 28% of joint income, soon to be 32%.

aliwali

Ours is around 23% at the moment. I pleased to see this seems fairly typical.

Sammy_Girl

Ours is 16% at the moment, which is a pleasant surprise Our fixed rate ends in March 2009, so interesting how much it will be then!!

TighterThanTwoCoatsOfPain

18% of joint, but just dropped term 5 years so now 21% on joint.. We currenty overpay buy about £150 per month after reducing the term so now actually c.26%...

zekepes

Our standard payment is a bit under 23% of our regular income and about 18% if you include the annual bonus. We overpay our mortgage currently to 34% of our regular take home pay and also about half of the bonus goes on overpaying the mortgage so it is an average of 37%. We could fairly easily afford to pay more than that though and are currently looking at our spending to make that a reality!
As another poster said that it really depends on what your take home pay actually is and what your other commitments are. A high earner with no other debt could easily pay 60% but I very much doubt a family on an income of £50K a year could.
Sorry! Just read your subsequent post now!

happybroker

what suits one person doesn't always suit another and I would recommend you consider your own comfort zone only.

I would think in terms of pounds per month rather than %'s of take home pay as the numbers will mean more to you, everything else we buy is in pounds after all.

I would also not pay any attention at all to the maximum loans banks will offer and concentrate on what you will be comfortable with now and in the future if rates rise.

Good luck

SurfBowlSC

My take home is just under £2000 per month and I'm the lone provider for the family (other than Child Tax credits)

Fortunately that figure is after my travel loan is paid, so there's only the standard bills etc. to come out.

As for the mortgage it's due to go up to £639 per month at some point in the next few weeks (when Natwest pull their fingers out).
We're fine with that though and still manage to have around £400 a month spare (though Lord knows where it's gone at the end of the month).