What percentage of salary is your mortgage?

Dollyrockerz

Hello,

I hope this is the right place to ask, husband and I have finally found a house to buy, great place, great location, no chain, very happy!

However, we are paying more than we had planned for it as the market is bonkers in the south east (and we fell in love with the place)

I'm happy we can afford the repayments but husband is a bit more nervous, so, I thought I'd find out what is the 'norm' as a percentage. Our previous mortgage was tiny and accounted for only about 18% of our incomings, the new mortgage will be approximately 35% but since it's a bigger place our bills presumably will be more too.

So, if I may, what percentage do people pay for their mortgage and what is a 'comfortable' percentage ?

libf

Currently in a shared ownership flat; mortgage 6.3% of net income, overpay 2.4% of net income and rent 8.2% of net income; so total 16.9% of net income.

Soon to be moving to a 3 bed house where the mortgage will be 30% of my net income, but as it's a 30 year mortgage I intend to overpay to 25 year level which will be 35% of net income.

Madbags

Our mortgage is £470 per month.


I earn about £1,100 a month after tax, my partner about £1,200.


So that's about 20% of our joint income after tax.


This is a very comfortable amount for us, we literally both transfer £620 per month each into our joint account for all of our bills + food for the month and whatever remains at the end of the month (usually around £250) goes into our savings for next years insurances, car service, emergency repairs etc. etc.


We're on a fixed rate for the next 4.5 years but if the rates go a bit higher when we choose a new product etc. We'd still have a fair bit of room to manoeuvre

chelseablue

Hi

Mortgage at the moment is 13% of joint take home pay
That's for a 2 bed flat

We're in the South-East too and want to move to a 3 bed house and the prices are eye watering so know how you feel!

What part of the SE are you?

Malmo

Many threads on this already:

Link to Google search results on MSE Forums

toddler9

Ours is currently around 10% of net combined incomes. We are moving soon and it will increase to 16%.

Makes me wonder what I waste all my other money on!

oli_ro

There is more to just being comfortable with 35%.
What if the rates go up ?
What if one of you loses job ? (knock wood)

What did your lender affordability checks say ? They should take into account more factors (council tax, childcare costs, etc...)
It is a good indication that you are not over- stretching.

I think you will never be 100% comfortable taking on such a commitment, unless you are lucky enough to have huge and stable income and low mortgage.

Me ? I am so conservative with taking risks as I have ended up with low payment vs. income, but equally its a flat and its not big.
No big risks, no big upside either.
Such a place will never increase in value the same way a bigger house would.

dimbo61

Spender or saver?
Good with money or nothing left in the current accounts each month?
We had a mortgage which with Overpayments was more than 50% of our take home income but we are savers and not spenders

20vt-rs

Currently 30% of joint salary here - all manageable but we are not big spenders or eater outers, we do have a little one to feed though. Overpaying, so if on standard payment it would be 23%...

As others have said look at the wider picture not just the mortgage percentage, 30% would be a stretch for us if we ate out all the time and went on expensive holidays. All depends on your circumstance. And yes, definitely look at bills / council tax etc, bigger house means bigger bills too. I always look at it like running a car

Dollyrockerz

Thank you for your replies

We are in West Kent Chelseablue

We are taking a fixed rate for 2 years, after that time I guess we will look at remortgaging, we are definitely cautious, savers rather than risky spenders! We have no other debts, no childcare costs, we plan on taking out life insurance and ASU insurance. The thing is, if we don't move onwards and upwards now we never will, the market has risen significantly in our area over the last few months and we risk being priced out.

I use an IFA and we have gone over the incomings/outgoings and affordability checks and I'm happy to tighten all the purse strings in order to get a lovely family home

calydon

Our min mortgage payment is £1150, currently overpaying a bit to make it £1250 each month. Our joint income after all deductions is £4800 per month, so around about 25%.

Really depends on your other outgoings though - e.g. we have childcare to pay of around £500 per month out of the £4800 as well.

We are just in the process of reducing our monthly payments by switching rate - the min payment will go down to £870, but we'll overpay so that our payment is £1000. I feel that the nearly £300 reduction in the cost will give more flexibility if job situations change etc.