Salary multiples.

biting_the_bullet

Just come off the phone with the vendor of the house we had a homebuyers survey on. Despite the survey giving us some negatives, the current reduced offer is still being heavily negotiated.

I guess its crunch time, and just wondered what the bulk of you homeowners have as regard to salary multiple mortgage value.

If we meet the vendors bottom figure the mortgage would be about 4 x joint gross salary, or 4 1/2 times my salary only. A big chunk of money, getting nervous now.

Come on, be honest, what about your borrowing?

Debt_Free_Chick

biting_the_bullet wrote:

If we meet the vendors bottom figure the mortgage would be about 4 x joint gross salary, or 4 1/2 times my salary only. A big chunk of money, getting nervous now.

Come on, be honest, what about your borrowing?

I'm not sure that salary multiples are terribly helpful, but here goes ....

Ours is 2.33 times our joint income. But seven times my income, alone :eek: (Yes, my partner is the main breadwinner).

But the repayments are 30% of our net income. Apparently, the average is nearer 50% of net income.

The reason I'm not a fan of salary multiples is that we forget to look at "affordability" and how we might have to change our lifestyle simply to pay the mortgage :mad:

cannyscot_2

4 times is ok but as above can leave a huge chunk of your income going out on morgage-it depends if you have other debts?

JennyB

5.4 times single income... do I win anything?

Actually, that's what it is to the mortgage company but in real terms it is 6.54 times joint income... holy shiiii! :eek: I've never worked that out before :rotfl:

Edit: Sorry, meant to add on a serious note - we're skint! Seriously, it is not a coincidence that I'm here at money saving expert! :rotfl:

cupid_s

my mortgage is 8.75x my single income

however the mortgage was taken out on the basis of hubby's earnings alone - at the time he was given 5.3 x his single salary (i wasn't working so my money wasnt counted)

Sarahpuggy

Ours will be 3.75 times our joint income..hopefully, which will take up just over 30% of our net income..

mi-key

Ours is approx 2.2 joint income and works out as just over 20% of take home.

We did get some lenders offering to lend us daft amounts of money, but decided we'd much rather borrow as little as possible to we can get it paid off as quickly as we can rather than being saddled with a huge debt for years.

PoorDave

Ours is currently around 2.2x income, but it was 4x when taken out only 2 years ago.

yay for pay rises!

Cost per month is 22% of net joint income, as above, it was a lot more when taken out, so you should compare like with like

Mrs_Optimist

Our is 2.5 times our joint salary - that was the maximum amount we could get when we bought 10 years ago. But I agree with other posters, it is about affordability. You could be earning a huge amount of money and be up to your eyes in debt, or earn 50% less but have no debt, therefore you would be in a better position to pay the mortgage than the bigger wage earner.

Julysea

Our new mortgage (if the house finally works out!!!) will be 4.6 times my husband's salary - I am a stay at home mum currently and be about 45% of our net income. Scary, but unfortunately vital to get a small family house for the 4 of us in this part of Surrey

clairehi

ours is 3.1 x joint salary which works out as approx 36% of takehome salary.

I thought the traditional rule of thumb was that you "should" spend between 1/4 and 1/3 of takehome pay on accommodation.

Obviously this doesnt show the full picture of affordability though. We pay over £500pcm childcare which eats into the budget somewhat.