260k mortgage on 65k salary doable or silly?

advice_please_2

you must budget very well. our shopping bill alone is £1k+ for a family of 3!

abankerbutnotafatcat

I was offered 4 x salary by Halifax last summer and that was on a contract salary!! From my perspective, I think it sounds entirely do-able especially in London (most stable housing market) but to be honest I don't feel comfortable in advising you of that as I think it's a decision you need to feel comfortable with yourself as we all have different attitudes to risk.

Thrugelmir

Louisdawg wrote: »

I suppose job loss but my main thinking is that is there much difference having to cover a 1250 mortgage than a 1500 mortgage if you really cant find a job - if it's over 6 months then you'd have to rethink in either situation.

Other than its £250 to save. Something you've omitted from your budget.

Along with an allowance for replacement equipment i.e. washing machines, house maintenance etc.

Money has a habit of dripping away unseen.

property.advert

Helen1971 wrote: »

I'd be cautious about taking on such a big mortgage. I personally would feel more comfortable with a more manageable debt and more disposable income. Good luck, whatever you decide.

It isn't a big mortgage though. For most of London it would probably be a small mortgage.

property.advert

Louisdawg wrote: »

Hi All

As above really - do you think it's acceptable/usual/bit tight or crazy. I live in London

Deposit would be 160k (Minus 20k moving costs etc) so say 140k

Purchase price 400k

Net pay per month 3700

mortgage 1400

bills and food 750

pension 360

travel 160

Leftover 1030 for Myself+wife+bubba

Wife not currently working but will be going back part - time next year?

Thoughts? We currently own our own house(mortgaged) but feel we want to make the next stepup whilst still young enough for a 25 year mortgage (34 years old)

Thank you

Put it another way. Your next property would be over £500k and thus attract a minimum £20,000 tax bill. All together, your moving would probably cost you over £40,000.

I would go for a 5 year fixed mortgage (my view) but I would be prepared to push it even higher to get the house you can live in for the longer term and avoid an unnecessary move. Going long term fixed also sidesteps all the affordability issues as well because your repayments cannot increase.

With the huge cost of moving at post £500k, both selling and buying, it is very hard to rationalise not busting your budget to get the family house you need sooner rather than later.

Also, any 5% increase in price would add another £20k plus to the asking price and a few more £000s to the ancillary costs.

Louisdawg

advice_please wrote: »

you must budget very well. our shopping bill alone is £1k+ for a family of 3!

1k+ on shopping for 3 people!!! What are you buying? Unicorn Steaks?

:rotfl:

Seriously though thats 350 per person a month? Time to buy Sainsburys own champagne I think!

Louisdawg

abankerbutnotafatcat wrote: »

I was offered 4 x salary by Halifax last summer and that was on a contract salary!! From my perspective, I think it sounds entirely do-able especially in London (most stable housing market) but to be honest I don't feel comfortable in advising you of that as I think it's a decision you need to feel comfortable with yourself as we all have different attitudes to risk.

I'm feeling comfortable with it at mo. My budget includes lots of things that could go if push came to shove - SKy etc and we don't scrimp when we do the shop.

It's the catch 22 - I'm pretty sure that the properties we are looking at now will have gone up by more than we could have saved over the next 4 years. On a 400k property I wouldn't be surprised if I saved 40k in the next 4 years and then when we went to buy the properties were all now 450 resulting in a 10k net loss.

I'm aware of property stagnation but it just doesn't seem to be happening in my area.

I know it sounds like a large mortgage but it would be a 65% LTV and First direct who I'm with have made positive sounds about porting and advancing the extra for about 3.89% fixed for 4 years.

Louisdawg

property.advert wrote: »

Put it another way. Your next property would be over £500k and thus attract a minimum £20,000 tax bill. All together, your moving would probably cost you over £40,000.

I would go for a 5 year fixed mortgage (my view) but I would be prepared to push it even higher to get the house you can live in for the longer term and avoid an unnecessary move. Going long term fixed also sidesteps all the affordability issues as well because your repayments cannot increase.

With the huge cost of moving at post £500k, both selling and buying, it is very hard to rationalise not busting your budget to get the family house you need sooner rather than later.

Also, any 5% increase in price would add another £20k plus to the asking price and a few more £000s to the ancillary costs.

I think I follow you but the purchase price would be about 400k. Do you mean the house we buy after this? I'm pretty sure the next house will have to be a stayer for a while so wouldn't be purchasing after this move for a while.

sirmosh

Louisdawg wrote: »

1k+ on shopping for 3 people!!! What are you buying? Unicorn Steaks?

:rotfl:

Seriously though thats 350 per person a month? Time to buy Sainsburys own champagne I think!

I totally agree, there may only be two of us but we spend under £300 for both and that's without being stingy at all.

RenovationMan

"260k mortgage on 65k salary doable or silly? "

We had a £300k mortgage based on a £60k salary and it's been fine. The main deciding factor on whether you should take on a large mortgage is your attitude to risk. Some people think having a £500k mortgage is fine, other people think having any mortgage at all is risky. This is why it's pointless asking people on the internet for this kind of advice, because only YOU know your own risk profile.