What % of Your (Combined) Take-Home Salary Goes on Your Mortgage?

tleefox

Simple question really - what % of your combined monthly take home salary goes on your mortgage?

Reason for asking is that myself and my fiancee have found a house which we love which is a bit more expensive than we had budgetted for, and the monthly mortgage payment will be the equivalent of 39% of our combined monthly take home salary.

I'm just trying to gauge whether or not we are stupid putting this much of our £ into a house?

Circumstances are, we are 26 years old, have no children and this will be our second purchase. Our combined take home is about £3300. We will stay in this house for at least 10-15 years and are looking at a 5 year fixed mortgage.

Look forward to people's thoughts.

PasturesNew

It makes me cry when I see a couple with so much cash spending so little of it on keeping a roof over their heads

39% is nothing....

USM

We are in a similar age bracket but my opinion is in the other camp - our mortgage payment represents 17% of our monthly take home pay.

Will you have children whilst in this house? What will the impact be when you go down to one income during this period?

FireWyrm

The old calculations used to be 30% of a single salary. This meant that you were not scratching around when the proverbial hit the fan. In my case its 26% of my sole income which is just about tolerable when you take into account the rising cost of living and all the bills you absolutely have to pay. I wouldnt be happy going much beyond this simply because I know how hard it is to keep within budget on that alone. However, if you think you can stand the pain...it's a call only you can make.

alexlyne

Not necessarily stupid... what could be considered stupid is not thinking about what could happen in the future that could cause issues - babies, saving for marriages, more babies, house price dropping (possibly), impending job losses, expensive house maintenance... if none of this will apply for the next 5 years, then sure go for it!
Personally, I wouldn't go as high as you, but then i'm quite cautious. It's gonna be tight for us when the missus goes off on maternity followed by a career break when I'll be paying the whole mortgage which will then be approx 50% of my take-home, with the other 50% taken up with bills shopping and a tiny bit of saving!

getmore4less

% of other peoples income is no use to you. what is sensible or achievable varies with income and peoples own commitments.

Work out YOUR BUDGET based on reality of YOUR spends.

If your old budget does not work do a new one

Do a SOA based on buying the place post for comments

Starting point
Do you do have a big enough deposit?

Errata

If interest rares rise, and who knows what will happen, you're snookered.

shop-to-drop

If your circumstances stay the same ie both working full time and no children then you would manage but if you want children and income goes down and expenditure goes up then you may be stretched too much. I'm also assuming you have no other debts. You need to really way this up look at all your new expenses and plans for the future. What are your future jobs prospects etc. It is quite possible that you will manage if you are quickly progressing salary wise even if you have children and interest rates rise but you need to be realistic which I'm assuming you realise since you are asking this question. Keep doing the sums and see mortgage advisor, maybe get a mortgage over a fairly long term that allows you to make regular overpayments. This would enable you to start with the larger payments and then when necessary stop the overpayments. Could you both work overtime or an additional job to build up a saving safety net for the months when the mortgage is stretching you. Our mortgage is around a third of our basic takehome and having three kids it's a stretch we make overpayments whenever possible but usually only when I have been able to work overtime.

I do hope that after thinking this through you do feel able to progress and buy the house you like but don't rush in without thinking everything through.

puddy

getmore4less wrote: »

% of other peoples income is no use to you. what is sensible or achievable varies with income and peoples own commitments.

Work out YOUR BUDGET based on reality of YOUR spends.

If you old budget does not work do a new one

Do a SOA based on buying the place post for comments

Starting point
Do you do have a big enough deposit?

this is correct, our percentage is 20%, sounds great yes? except that we have literally NO spare money due to 25% of our income (at least dependent on my work) being spent on travel costs to work. if you dont have huge travel costs like that, then you could up the % of what you spend on mortgage

it completely depends on what your other costs are, whether you have debt, and what % that would be

we are also on a fixed rate, i could kick myself every month that the rates stay low, we are on 4.89 and we probably would have been on about 3% or even lower if i had been psychic, but at least i know that until 2017!!!! (it was a 10 year fixed, doh!) we wont have any higher mortgage payments

wastedtalent

When ours go through it'll be about 20% of our combined take home pay.

leaves us enough to be able to put aside a bit for those unexpected events, like boiler explosions.

tleefox

Thanks for the comments thus far.

The difficulty we have is that we are both from Bristol, but are currently in the process of moving away from Cardiff where we bought and sold our first home together, and Bristol is much more expensive than Cardiff. We both want to be in Bristol and to be able to afford it, this is the amount we will need to spend.

We are getting married next April, but have pretty much got all of our budget together for that as we have both been saving a lot over the past year since we got engaged.

Finally, we have saved a 10% deposit, and have money tucked away for the stamp duty and any work we would want to do to the house immediately i.e. painting and decorating.