How big is too big?

Jaybo10

Thrugelmir wrote: »

How much you are comfortable borrowing depends on how lavish your lifestyle is.

Hi Thrugelmir

Its hard to judge how lavish my lifestyle is because at the moment we are on a savings drive and so are not spending anything.

In the past I have had fun with my money, but now I am much more careful and live within my means.

Jaybo10

hcb42 wrote: »

How much are you saving and paying in rent at mo? Compare that to estimated mortgage payments to see of you are comfortable

Personally, we took out £186k in 2006 on sal approx£85k combined and I would not want any higher although our term was 20 yrs

currently we are saving my entire salary and living off my other half only.
we are in a very fortunate position of being able to move in with my parents in order to save at the rate we are.

In the past we've paid £800 - £1000 pcm for rent and that was when we were earning less.

Jaybo10

Dave_Ham wrote: »

Hi there,

I think this is about average in terms of income to mortgage.

Assuming that you are quite young your income should increase throughout the term of the mortgage (and yes so do costs/family etc.) but this is achievable.

The banks will lend this sort of figure and given the state of lending at the moment, this should demonstrate it is affordable..

Budgeting will be key, especially in certain parts of London if you bought anything leasehold be mindful of additional service charges etc.

Good luck

Thanks Dave,

Yes that's exactly what I'm trying to get a feel for. Though I can see that a bank is willing to offer me the amount I am mindful that it is a big amount of debt to take on and I need to factor in life changes (kids/job moves losses/ increase in interest rates etc).

I just want to see if it is normal (in the la la land house prices of London) to take on a mortgage that will take a substantial sum of our combined take home pay..

For those of you asking, I am the grand old age of 32!

Jaybo10

DannyboyMidlands wrote: »

A £300k mortgage on that salary sounds insane to me. What if one of you loses your job or suffers some other misfortune? What happens if interest rates rise? Or you have kids? Or house prices fall?

Thanks Danny,

to be honest I think it is a little insane, but the reality of house prices in London (or at least the areas I am considering) are that you don't get much more then a 2 bed garden flat or a run down terrace for that price.

I have looked at affordability and believe we would be ok however, I won't deny there is risk there.. this is also why we are saving like loons to build up a big deposit 60K is our min, but we'll keep going if necessary

Jaybo10

shop-to-drop wrote: »

How old are you?

has no one ever told you its rude to ask a lady her age?! rofl
I am 32

Jaybo10

The_J wrote: »

I thought this topic was about something else. Disappointed.

Less than 4 times salary is comfortably affordable if you aren't an idiot.

J you are welcome to talk about what ever is on your mind!!

I hope I am very much not an idiot

Trying_to_be_good

We took on a £300k mortgage a couple of years ago, over 18 years, on a loan-to-value of just over 50%. It's huge, and we're trying to pay it off whilst also doing up the house - it's our forever house, and is (or will be) beautiful. Our joint salary is higher than you, but it's doable - we save extra into our offset.

But the knowledge that the mortgage is there is constant, and we went for a five year fixed rate so as any interest rate rises wouldn't affect us (until the end of the fix). You'd be VERY brave to take this on a variable/tracker rate, and if you're looking to stay in the house for a while, a longer fix is worth considering.

Good luck!

Thrugelmir

Jaybo10 wrote: »

Hi Thrugelmir

Its hard to judge how lavish my lifestyle is because at the moment we are on a savings drive and so are not spending anything.

In the past I have had fun with my money, but now I am much more careful and live within my means.

There's more to life than servicing a mortgage debt.

Something you'll appreciate more as you grow older.

On a £300k debt you need to factor in the consequences of a rise in interest rates. Say 2% or 3%. Then see if the repayments are so comfortable.

The_J

Trying_to_be_good wrote: »

We took on a £300k mortgage a couple of years ago, over 18 years, on a loan-to-value of just over 50%. It's huge, and we're trying to pay it off whilst also doing up the house - it's our forever house, and is (or will be) beautiful. Our joint salary is higher than you, but it's doable - we save extra into our offset.

But the knowledge that the mortgage is there is constant, and we went for a five year fixed rate so as any interest rate rises wouldn't affect us (until the end of the fix). You'd be VERY brave to take this on a variable/tracker rate, and if you're looking to stay in the house for a while, a longer fix is worth considering.

Good luck!

Judging by your signature, your tone doesn't really match the reality. £150k saved in 3 years? Life is a struggle.

Jaybo10

Thank you all for your thoughts and advice, its greatly appreciated.