Feeling scared at the amount of debt we're taking on

Malkin157

Welcome to the Housing Ladder Express stopping at - Belt Tightening - Rate Rises - Mouths to Feed and Repossession Central.

THE_MASKED_TURNIP

Seriously relax and calm down. 50% of take home pay is child's play and certainly more than affordable especially when you top it up with your take home pay. Before you bought your house you will have been financially scrutinised by mortgage lending professionals who will have seen you as safe and worthy, so honestly I wouldn't panic especially as your preggers.

cynicalgit_2

Welcome to the world of "Carousel Capitalism".
Once on it you can never get off it.
Just don't lose your job.

sjoh0961

Wow, you've got me a bit scared now!

Live in Acton, bought last spring: borrowed 325k on a house valued at 385k.

Values have gone crazy, so we are remortaging to get a better LTV and, therefore, monthly repayment.

We will now be borrowing 355k on a the same house now valued at 550k.

As a couple on full-time wages, we take home £5000. Would have been paying £1600/month (32%), but will be paying <£1300/month (26%).

The total amount of debt sounds massively scary, but I think it's only the monthly payments that are relevant, really.

THE_MASKED_TURNIP

You have to remeber that Rome wasn't built in a week. As you've identitied just knuckle down, focus on the affordable monthly payments, and get on with enjoying your life. Soon it will be 2038 and you'll be sitting pretty mortgage free.

Good luck with the babba.

SecondTimeBuyer

sjoh0961 wrote: »

Wow, you've got me a bit scared now!

Live in Acton, bought last spring: borrowed 325k on a house valued at 385k.

Values have gone crazy, so we are remortaging to get a better LTV and, therefore, monthly repayment.

We will now be borrowing 355k on a the same house now valued at 550k.

As a couple on full-time wages, we take home £5000. Would have been paying £1600/month (32%), but will be paying <£1300/month (26%).

The total amount of debt sounds massively scary, but I think it's only the monthly payments that are relevant, really.

The monthly payments are as relevant as the level of debt being taken on. If BOE interest rates in 5 years time hit 5% the monthly payments on £355,000 your mortgage rate could be 8%, and therefore your monthly payments will be around £2,800/month (56%)

RiTSo

Maybe people should question why it is bad for your heating bill to go up £100 a year, petrol to go up 5p/litre or a loaf of bread to go up 10p BUT, according to the media and most other outlets, it is absolutely spiffing all round if the price of the average house goes up by a couple of grand every month. Once you factor in paying that couple of grand off over 25 years at 5% what is the real cost to most people?

marlot

When we bought our current house (a new build), we borrowed absolutely to the max. We couldn't even afford the light fittings, and the electrician had to fit white plastic ceiling fittings.

We put that fear into paying off the mortgage early. All bonuses, pretty well all spare cash, etc. When I was made redundant - fortunately quite a few years later - we were mortgage free and able to take it in our stride.

suki1964

And it was mortgages of that magnitude that had us moving 500 miles to a house we could afford

marlot

RiTSo wrote: »

Maybe people should question why it is bad for your heating bill to go up £100 a year, petrol to go up 5p/litre or a loaf of bread to go up 10p BUT, according to the media and most other outlets, it is absolutely spiffing all round if the price of the average house goes up by a couple of grand every month. Once you factor in paying that couple of grand off over 25 years at 5% what is the real cost to most people?

Maybe its because utility bill rises reduce people's monthly income, but the house price rises increase their personal 'balance sheet'.

(I know that it can easily be a theoretical improvement, as it is completely meaningless unless you're planning to make yourself homeless).