Mortgage and home costs to stay comfortable?

GoldenEye07

My question is regarding affordability, I realise this is an entirely individual thing that depends on a number of factors but just wanted to gauge some views on what people find is manageable for them?

How much (%) of your take home pay do you commit to
1) your mortgage
2) your home costs as a whole (mortgage, C.Tax, bills, insurance etc but not living/food)

My wife and I are looking at figures of 25% & 35% of our joint net pay on a new mortgage – not sure if this is conservative or not?

GoldenEye07

I have edited my post to get straight to the point, first attempt was a bit of a waffle...

Bluemeanie_2

Our joint income is £2050 net. Our bills are:

Mortgage (3.19%) £300.10
Council tax £99
water £49 (paid over 8 months)
gas and electric £67
B and C ins £12
Life ins £10.02

We overpay a lot. Our first mortgage was £527 a month when interest rates were high. We overpay a lot.

HappyMJ

GoldenEye07 wrote: »

My question is regarding affordability, I realise this is an entirely individual thing that depends on a number of factors but just wanted to gauge some views on what people find is manageable for them?

How much (%) of your take home pay do you commit to
1) your mortgage
2) your home costs as a whole (mortgage, C.Tax, bills, insurance etc but not living/food)

My wife and I are looking at figures of 25% & 35% of our joint net pay on a new mortgage – not sure if this is conservative or not?

That's fine you should be looking to spend not much more than 40% (in my opinion) of your net pay on housing costs such as mortgage repayments (interest only), buildings insurance, property maintenance, basically include anything that a tenant would not be expected to pay when paying rent.....and don't pay more than you would have paid if you were renting the same place.

Me 25% of net income goes towards interest. The other bills are relatively small in comparison.

katejo

I have had a mortgage for most of the time since 1993 (apart from a short gap after paying off the first one). My monthly mortgage payment has never been more than 33% of take home pay. Combined with all other bills, it comes to approx 50%.

GoldenEye07

Thanks for the replies guys, very helpful indeed - does anyone else care to share their thoughts on this?

Another question I had was assuming we are happy with the mortgage figures we get, is the general opinion that we should fix for as long as possible?

It would be a 90% LTV mortgage we go for so does it make sense to fix for say 3 years and try to overpay a bit as well when possible?

sammyjammy

Take home pay 1712 (just me)

Mortgage 427
Gas/Elec £43
Insurance £22
Water £11 (meter)
CT £74

so mortgage 25% and overall 38%, in the past its been a lot higher though, I currently save an additional £600 a month as I can't overpay my mortgage at all until the fixed rate ends so I have around £535 for food and other bits and pieces, I don't run a car nad can be very frugal when I put my mind to it.

confused_kid

Hi,

We are just in the process of buying a house at the moment, and I was looking at our affordability based on % of net pay also...our new mortgage (if everything goes through ok - touch wood)...will be approx 25% of our joint net pay...this is the max I wanted to go to....with all bills etc, and i've over estimates as I like to look at worst case at times - we come in at around 45-50%....

Anymore and it would give me sleepless nights...I guess everything has their own internal affordability scale...mine real scale is mortgage not to exceed 25% of net.

good luck!

Brallaqueen

Net pay was £1225
Mort - 450 (37% ish)
Bills - 345 (28% ish)

I rent a room to a lodger which helps and almost coversd the bills so I guess 42% in total?