Is this feasible?

kriss_boy

Wife and I are aged 30 & 28 and work in the public sector on pay scales that benefit from annual incremements. (No kids, yet). We like a house that is 200K... however our family and friends are being quite negative about the affordability... albeit I appreciate their concern.

After tax monthly salary
£2850

Bills,
£850 Mortgage
£180 Council Tax
£26 Home Ins.
£160 Energy
£80 TV/BB/Phone

So approx £1550 per month left for food, petrol, car repairs, etc.

The mortgage would comprise of,

79K @ 1.73% tracker (1.23% above BoE),
100K Fixed @ 5.19% for 5 years, then 3.99% variable thereafter.

My thoughts are we can easily afford this... but Im concerned interest rates could be 8/9% in 5 years time and our mortgage could be around £1350... but the plan is to overpay throughout the first 5 years....

Is this a reasonable size of mortgage? People seem appalled by this

MrsDL

Hi my Husband and I also both work in the public sector and earn as you do. Our mortgage is £800 and we overpay about 100 a month. Just make sure you do a thorough budget to include emergency savings etc. without my husbands overtime we would have s holiday/money for expensive maintenance etc. also are you thinking about children in the future and maternity leave? We often regret having such s big mortgage!

opinions4u

Doable.

Know how you'd pay when rates are higher. Know how you'd cover payments if one income stopped.

Don't just think about car repairs. Save for car replacement too.

Make sure there is a contingency fund in place. Life has a habit of dropping the unexpected on you.

Southend1

Wouldn't count on the increments for much longer, George Osborne has just said he wants to do away with progression pay in the public sector.

Thrugelmir

kriss_boy wrote: »

The mortgage would comprise of,

79K @ 1.73% tracker (1.23% above BoE),
100K Fixed @ 5.19% for 5 years, then 3.99% variable thereafter.

Has your lender agreed to the port?

kriss_boy

Thanks,

We are currently living on my pay alone as a trial. Which, after all the bills equates to £750 a month for fuel and food... so if we do buy this place then we will effectively have double the disposable income that we do now.

The idea would then be to attempt to save £500/600 a month for the first 6 months, then tone it down once we had some savings.

I suppose its like buying a new car or booking an expensive holiday... you quite enjoying saving/paying off £400/500 a month for a while.... however this house is effectively signing off a large proportion of our wage for the next 10/15 years...

kriss_boy

Thrugelmir wrote: »

Has your lender agreed to the port?

Yes, thankfully.

Worst case senario, rates begin to go up and we could decide whether or not to fix this part of our mortgage also. But our plan is to overpay the 5.19% part, hoping that when the fix comes to an end we have an TV for 85%, possibly 80%.

poet123

There are no amounts for Water, life insurance, TV licence, or car insurance on your list.

kriss_boy

poet123 wrote: »

There are no amounts for Water, life insurance, TV licence, or car insurance on your list.

Tv license is included in BB/TV/Phone, so is water within our council tax as we live in Scotland. We have basic life insurance with our pensions, however, fair point we intend to get something more substantial.

Cars, ok, approx £75 a month in insurance and road tax but we actually intend to sell my car if we buy this place. So that would drop to around £35 a month.

Fishingtime

The house is on sale for 200k
How much is your mortgage going to be for?
Sorry if I have missed something

kriss_boy

yoxford2008 wrote: »

The house is on sale for 200k
How much is your mortgage going to be for?
Sorry if I have missed something

£850 is the upper permutation of what we are likely to pay.

We would only be putting down around 10%. There are a few places marketed around £200-225K that we really like. So the mortgage is going to be around £170K-200K.

However its highly unlikely we will commit to a property around £220K, with a mortgage of 200K.

We really like a few places marketed at 200K. So our mortgage would nearer 175K/180K, ie. £750 per month.