Increased payments

star02

The illustration on the application shows what will happen if mortgage interest jumped to 11% which is quite scary to be honest! Hopefully this would not happen,but it has made me consider further what monies need to kept should rates increases. What % of net income is acceptable for current mortgage payments? Should it be no more than 25% so if doubled still affordable etc? What % do most people choose?

ThePants999

That's very personal and depends on the rest of your budget. For example, mine's long been a little over 25%. A few years ago, we could have afforded it doubling as a lot of the remaining 75% was saved. Now, it's still a little over 25%, but we couldn't afford it doubling as other circumstances have changed and we're not saving much right now. Consequently, we've fixed for 5 years knowing that we'll have more flexibility in 5 years' time.