What proportion of Net income goes on Housing costs

Generali

About the same as the OP. My living expenses are higher than they'd be otherwise as I have to have health insurance which works out at about 4% of my net income prior to the tax rebate I'll get.

Batchy

Chaos_A.D. wrote: »

Of course IR's are to stay low for some time, however it's unlikely to be more than a few years, have you factored in perhaps a couple of % on top of what you're paying now as the 'normal' and maybe double your current rate for more extreme times, as there is bound to be over a 25 year period ?

Those percentages you give look to be fairly hefty given where IR's are now.

Cheers
Yes ive factored it in, its based on one income, but we are two incomes. The extreme is affording it on one income, I obvously can factor in double the costs since im only 48% but wont leave a lot of room, I expect the % to go down as pay is increased over the next two, so double ie, 8.5% repayment rates could be managable.

My plan is to pay down too, so might be able to knock off an extra 10k-15k before 2 years is up. Every little helps.

PS im spending 10k bettering the house in the first 12 months. So this should do wonders for new LTV and better rates in the future, although im not holding my breath, and am happy with the definitive tracker rate going forward. Although its expensive, its life unfortunately.

LilacPixie

Mortgage alone 13.81%
Household costs + mortgage - 22.45%

Batchy

Thanks for all your contributions... Some sensible discussion on this thread.

When I was renting, rent was about 21% but my savings were about 21-35% too, so with bills being another 12-15% all in all, it will be about the same as renting when i was on my own, but in fact better when buying as less pressure to save.

Obviously one factor you guys dont know is My gf, has a house to sell at the moment (partly owned by ex), once thats (eventually) sorted (brought in 2001, so reasonable equity), then we can lump sum payment the mortgage down, or just offset or something in the future, OR just enjoy it. But I think overall, in Equity together we would be around the 40% mark. With no other Debt either.

My figures are worst case scenario for 2 years, and are unlikely to get worse, but I expect rates to increase, but no SHOCK increases.

Unless the dreaded redundancy rears its head. But its almost certain not to be a result of company failure just re-oragisation. But 1 month per year would be nice if I can find alternative employment elsewhere quickly. So all in all... time was right.

Batchy

Chaos_A.D. wrote: »

I'm sure that maybe true especially at this time, I'd be surprised if that's the case in 3-4 years time. I guess time will once again lay it all before us.

I think my %ages would be higher in the future, I agree rates will rise eventually, just have no idea when... could be 6 months... could be 4 years... I personally just dont know.

I just know if its not for another 2 years, I reset my mortgage rate for the next 5 years following, to reduce risk, and FIX for a longer period, even 10 years.

chucky

Batchy wrote: »

I think my %ages would be higher in the future, I agree rates will rise eventually, just have no idea when... could be 6 months... could be 4 years... I personally just dont know.

I just know if its not for another 2 years, I reset my mortgage rate for the next 5 years following, to reduce risk, and FIX for a longer period, even 10 years.

the best thing that many of the anti-mortgage and anti-buy a house brigade refuse to accept is that your mortgage will be a fixed amount.

on the other hand your wages will be rising - what you earn in year 1 of your mortgage will be less than you'll be earning in Year 5 and year 10 and year 15.

the percentage proportion of your salary will be lower with time.

macaque_2

Batchy wrote: »

Hi Guys, Gals

Just wondering about to buy a house and wondered where abouts the norm lies

What percentage of your NET income after tax is gone on :-

1) Mortgage repayment on its own for your residential home
2) all the costs of housing including the above mortgage repayment elect rates water tv, sky, bb, insurances, etc

Im personally around:-
32% Mortgage costs (repayment fixed for 2 years)
48% Total Costs (inc mortgage elect rates water tv, sky, bb, insurances, etc)

Leave a bit left, hopefully a payrise or two before rate is reset to SVR.

Thanks feel free to participate if you want too.

Good post. Let me add my breakdown costs:

Income
Salary - 61%
Job seekers allowance - 4%
Incapacity benefit - 5%
Housing allowance - 7%
Blackmail reciepts - 15%
Investment income -8%

Outgoings
Rent - 16%
Car -15%
Singles holidays - 21%
Wine 14%
Cigarettes 8%
Food - 4%
Luxury goods - 17%
Blackmail payments - 4%
Children - 1%

Batchy

macaque wrote: »

Good post. Let me add my breakdown costs:

Income
Salary - 61%
Job seekers allowance - 4%
Incapacity benefit - 5%
Housing allowance - 7%
Blackmail reciepts - 15%
Investment income -8%

Outgoings
Rent - 16%
Car -15%
Singles holidays - 21%
Wine 14%
Cigarettes 8%
Food - 4%
Luxury goods - 17%
Blackmail payments - 4%
Children - 1%

Funny post... well done!

Batchy

chucky wrote: »

the best thing that many of the anti-mortgage and anti-buy a house brigade refuse to accept is that your mortgage will be a fixed amount.

on the other hand your wages will be rising - what you earn in year 1 of your mortgage will be less than you'll be earning in Year 5 and year 10 and year 15.

the percentage proportion of your salary will be lower with time.

To be fair I have been anti buy in the past... but the thing that changed this recently is I could reach what I always aspired to have...after waiting so long. My waiting paid off.

So my outlook has changed, and im beginning to be far happy about things as a result. Call me selfish... sure, we all are. You have to look after number one in your lifetime. Im not promoting everyone to buy buy buy, you should only personaly buy when you can afford it, are happy with it, and it makes financial sense.

There is a risk but I think Its manageable in the long run. (well I hope it is anyway) lol