What % of salary is sensible for mortgage payments?

noisla

Thanks everyone.

I am skeptical of averages as that will include people who may end up repossessed or have to compromise their lifestyle massively to afford it. A metric based only on over-cautious pessimists would be ideal!

I just can't imagine being in debt at all (now my student debt is paid off), let alone that much!

I tried asking my dad for advice but he's not very in touch with the realities of the property market where I live - he was a FTB in 1960, for example. And my friends have all tended to buy in couples and about 5-10 years ago when they had low incomes and interest rates were high. Banks/brokers say I could borrow wild sums, so again not very useful.

So thanks for the reassurance everyone.

dimbo61

First of all WELL DONE on saving a 25% Deposit
If you buy for less than £250K you only pay 1% stamp duty
If you have a Lodger who pays you £4250 a year under the Rent a Room scheme you have no tax to pay.
This will help with bills, mortgage ETC
WHY 2 years fix? As other have said little chance of big rate rises in next 12/18/24 months but why not 5 year fix if you plan on staying.
OVERPAY once you have built up emergency savings and consider offset mortgages as you have a good income and can build up savings

HAMISH_MCTAVISH

noisla wrote: »

I am skeptical of averages as that will include people who may end up repossessed

Just 0.77% of homeowners end up being repossessed over the long run.

or have to compromise their lifestyle massively to afford it.

When my generation were buying in the late 80's and early 90's, it was common for people to have no furniture for their first year or more, eating off cardboard boxes and sitting on plastic milk crates with a cushion on top.

Virtually nobody I knew could afford a home phone at first, and many bought old wrecks of flats with no central heating, no double glazing, etc, as their first place.

Of course they were still better off than the generation 20 years before that, when as many as 15% to 20% of houses still didn't have indoor toilets.

So I'm sure any "lifestyle compromises" today will be small by comparison.;)

A metric based only on over-cautious pessimists would be ideal!

They tend never to buy.....

I just can't imagine being in debt at all (now my student debt is paid off), let alone that much!

It's cheaper than rent in 95% of the UK.

No different really, except you're not buying a house for someone else.

Thrugelmir

noisla wrote: »

I'm a FTB, been saving up for ages and wondering whether to stretch myself on a £240k house. I'd have a 25% deposit and mortgage repayments fixed for 2 years at £755.

Which mortgage product is this?

getmore4less

Usual blx you can't use what % is right/normal.

In the end it is a combination of need want and investment against income.

noisla

Thrugelmir wrote: »

Which mortgage product is this?

Yorkshire Building Society 2.14% 2 year fix 75% LTV - still available at time of writing. I just used the MSE mortgage calculator. I appreciate that this just provides an estimate, depends exactly how they compound their interest, but ball park correct I think.

HAMISH_MCTAVISH wrote: »

When my generation were buying in the late 80's and early 90's, it was common for people to have no furniture for their first year or more, eating off cardboard boxes and sitting on plastic milk crates with a cushion on top.

Thanks for the advice. Believe it or not, I'm an accountant, so I get the maths of buying vs renting, but still hard to imagine ME being in so much debt! Luckily I already have some basic furniture as my rental place was unfurnished, my grandma gave me some old crockery, and fridges are £40 on Gumtree. My everyday life is very cheap, no commute costs, no phone contract, I buy second hand where possible. My guilty pleasures are holidays, which should be an easy indulgence to forgo for a bit. I expectation is that incremental DIY becomes a new full-time hobby when you get your first place. Stay-cations in Wicks and Homebase :-)