Mortgage question - how much is too much?

Debtslayer

always_sunny wrote: »

Thank you... the reason for asking is because I am finding shortage of smaller properties, though larger properties with higher prices seem to be there. Ideally I wanted to first buy something small and then eventually increase size but maybe I can do that right away.

I am on a good wage, no other commitments like car of kids (and none in the foreseeable future) and no dependants either. I spend no more than 40% of my income for all expenses (rent, commute, eat, phone, the lot)

I am not a big spender and even though I will be going solo on the mortgage, I share expenses with my partner. If we were to apply together (we're not going) then it'd only be 2.5x our income.

My views on borrowing are very conservative... so I was wondering if 4x annual wage is normalish or very rare!

You say you are very conservative with your views on borrowing, which is not a bad thing
As you are conservative I would suggest you borrow what you feel happiest to borrow (2,3 or 4x salary)
As others have posted draw up a budget and then you will know what you are comfortable spending each month on a mortgage (therefore the amount you are comfortable borrowing)
Also hear in mind future interest rate rises, would you still be able to afford to pay?
You say you currently split bills with your partner, if you split up or they lost their job would you still be able to pay?
I think all these are things to consider when looking at property and how much you are looking to borrow.
Initially a bigger house may look more attractive but then you will have higher payments for everything
So the smaller more affordable property now looks more attractive as it's more comfortable to purchase at the moment. You could buy smaller, make overpayments on mortgage if you can to reduce interest and term and build up equity, then when you consider moving in X years time you won't have over stretched yourself now and hopefully you will have built up equity in current home and have a much lower LTV

_CC_

cns06 wrote: »

money is the cheapest it has ever been right now. Take advantage of that. Don't be stupid

:money: Sounds like a plan.

sebtomato

cns06 wrote: »

Borrowing money is the cheapest it has ever been right now. Take advantage of that. Don't be stupid (sounds like you wont)

Yes indeed, what the worst that could happen...

Cheapest money available right now (in a few years' time, with another 10 year to go on mortgage, who knows?)

Highest prices in the property market ever...