Income multipliers or actual affordability?

Wobblydeb

callmechar wrote: »

Thanks. We are very sensible and do not spend much money.
It would be hard if not impossible if one of us lost our jobs, but it would be now. We are living to that now (albeit saving more as not got life insurances etc) and rent is £825pm now £1000 as mortgage would be

p.s. Check whether your employer and/or pension includes life insurance - you may not need separate cover.

callmechar

Wobblydeb wrote: »

That looks pretty sensible - although the spends look low for "entertainment" type stuff, especially as you have a child. Where are the costs for days out?

Is your salary after student loan repayments have been deducted?

In addition are those salaries after you/employer have contributed to a pension? If not, do you really want to reach 67 with a nice home but having to live on £850 a month between you? :eek:

I'd also look realistically at the budget if one of you was out of work. The mortgage on interest only would be c£650 so without childcare costs you would need to cover living costs of £1,967. You'd get job seekers of £293/month for a period and I'm not sure what tax credits you might also get. It would be very tight! You'd manage if you got rid of the car / rented a room or took some other action. Alternatively you could look into income protection ..... although you're in the difficult position of needing to protect both incomes as they are equal so both are needed to cover your costs.

We are considering taking insurance out to cover unemployment

Wobblydeb

callmechar wrote: »

We are considering taking insurance out to cover unemployment

Might be worth doing that until you get some savings built up again. I paid for cover when I first took my mortgage, and had it for the first couple of years. I did actually get made redundant in that time, and it was a massive weight off my mind that the insurance was going to keep a roof over my head. As it happens, I actually got another job so never claimed on the insurance, but the peace-of-mind was worth it. Nowadays I keep a few months savings instead.