3 times salary! How ridiculous!

racheyg

Sorry if this has been posted before.

FSA are suggesting a cap at 3 X salary for mortgage lending! Talk about a one size fits all mentality!

I know for sure that I could afford 6 or 7 times my 'salary' - isn't it all about how you live your life? I have 3 jobs, and if one goes, I have others to compensate. Someone earning £300,000 in one job and they lose it - well they're stuck!

m_13

Surely if you have three jobs then your total salary will be higher than average?

Lenders have had their fingers badly burnt with lending 4,5 or 6 times salary. Interest rates are at an historic low at the moment but then they rise, as they inevitably will, mortgage payments will rise.

A £100k mortgage over 25 years is £321.64 per month at 1%, £584.59 per month at 5% and £706.78 at 7%.

z1985m

m_13 wrote: »

Surely if you have three jobs then your total salary will be higher than average?

Lenders have had their fingers badly burnt with lending 4,5 or 6 times salary. Interest rates are at an historic low at the moment but then they rise, as they inevitably will, mortgage payments will rise.

A £100k mortgage over 25 years is £321.64 per month at 1%, £584.59 per month at 5% and £706.78 at 7%.

i think we've been had. ours is 100k mortgage and it costs us just under £600 (fixed) a month but thats over 35 years :eek: god damn mortgage advisors

sooz

why do you think you've been 'had'?
you chose to fix at an interest rate you found acceptable. Just because interest rates are now lower, doesn't mean you've been 'had'.
would you be saying the same thing if interest rates were now 15%, & you were still fixed at your current rate?

racheyg

Hiya - yes but I would only get a mortgage on one of them, and my partner has two jobs (complicated, I know, we have just started a couple of companies). We bring in over £6,000 a month, plus I get child maintenance, but we could only get a 'normal' mortgage of £180, that's 3 x our bread and and butter jobs.

I suppose what I meant to say is that those with high incomes from one job are more at risk of not finding another one, especially at the same salary, so isn't that more of a risk than someone in a lower paid job where they have more chance?

before_hollywood

i'm going to be borrowing 3-3.5 times my salary.

i just wish prices were a bit lower so my choice was a bit wider

besonders1

whats the problem, it will just mean cheaper house prices and mortgages for everyone, if multiples higher than this were to be continued to be used, then estate agents and developers/builders, will just abuse this as a way of getting more money out of people by doubling the prices as we have just seen at FTBs buyers' expense.

lincroft1710

3 times salary was for many years max amount BS would lend.

before_hollywood

lincroft1710 wrote: »

3 times salary was for many years max amount BS would lend.

quite a few lenders wont go above about 4 times.

northern rock in 2006 did about 7 times :eek:

poppysarah

I would estimate that the OP is under 30.

Some people have not grown up and known anything but acceptance of high (insanely so) house prices.

Cheap rents and cheap housing makes for a stronger, better, more resilient economy.
High house prices and rents have led to the virtual destruction of the UK's banks and banking system.

racheyg

poppysarah wrote: »

I would estimate that the OP is under 30.

Some people have not grown up and known anything but acceptance of high (insanely so) house prices.

Cheap rents and cheap housing makes for a stronger, better, more resilient economy.
High house prices and rents have led to the virtual destruction of the UK's banks and banking system.

I'm 40, so thanks for the compliment, but maybe I should know better (didn't buy until I was 26 though)