Mortgage calculator help

so3003

I'm looking for a mortgage calculator, or help making my own amateur version in Excel / Google Docs etc - and/or any general advice people could give for our scenario. I've posted before on MSE but I know very little about mortgages, so please bear with me!

MrsSO3003 and I are doing research before house buying and want to establish what we can afford to buy. We are both youngish (that means around 30 ) with well paid jobs, though like everyone else we are aware of the possibility of our income significantly reducing in future (see below). We are in a relatively good financial position just now with no debt other than mortgage on our existing flat.

We are both professionals in a specialist field, paid basic salary plus predefined "percentage bonus" depending upon contractual issues. Our basic increases each year. We are within 2 and 4 years respectively of reaching a point in careers where (assuming we can get jobs) we will both earn slightly more in basic salary than we currently get in total, though without adding any "bonus".

Potential scenarios that sour the above are:
- The "bonus" element (currently around 30% of total salary) could theoretically disappear, though I can't see that happening within a relevant timescale;
- Potentially one of us may be on only basic salary for a sabbatical period of 2 years depending on work choices in the next 18-36 months;
- One of us could potentially be out of work if unable to find a job at next stage of career (worst case scenario is settling for something that just pays basic similar to current basic),
- Most likely of all, if we start a family beyond next 2 years it's likely mrsSO3003 won't get maternity pay because of the way we are employed, so that'd be an extra mouth to feed and just one income.

The bottom line is that whatever we buy, we need to be able to pay the mortgage every month, or we could lose everything.

We think at the moment it'd be most sensible to start with a variable rate mortgage and overpay as much as possible to reduce capital quickly and protect ourselves from 1) loss of income 2) rising interest rates.

I want to model the above issues, looking at potential scenarios with current income maintained, both incomes reducing, losing one income, and rising interest rates. Can anyone point me in the right direction?

(Note we're still in research stage, and plan to seek "proper" financial advice before committing.)

Thanks in advance

Scott

ACG

Theres nothing like what your after.
There is nothing wrong with planning for the future, but with so many eventualities its impossible to plan for.

If your so concenred by all of the above, why not look for a mortgage based on a single income?
Very few lenders will offer you the maximum of any bonus anyway so that shouldnt be too much of an issue (as a crude mathematical formula, halve it then multiply by 4, your basic on the other hand just multiply by 4...that then gives you room to borrow more if needed but gives you a basic figure of what you could get without too much difficulty).

You would probably spend that long working out how to create a spreadsheet to do what you want that you could have paid a years worth of repayments.

Most people would just look at what the repayments would be if they borrow £xxx and decide if they could afford that in all eventualities. Another problem is that whilst interest rates are unlikely to rise in the forseable future....they are likely to rise and nobody knows when - thats one thing you cant really factor in to any great extent.

getmore4less

I would forgat any fancy model just do a simple one based on earnings estimates.

I would just look at total of what will be available to pay the mortgage over the planned period, average that and that will tell you how much you can afford.

As the income will be higher at the begining you just save/overpay, offset would be ideal way to manage cashflow.