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Income to mortgage repayment ratio
sst1234
Posts: 118 Forumite
Hi,
As I’m in the process of upsizing, there are a few decisions to be made, for example what is reasonable as an income to mortgage repayment ratio. That is of course different to loan to value since mortgage repayments will be influenced by the term of mortgage and interest rate available.
I’m interested in what circumstances fellow moneysavers are in i.e what your monthly income to mortgage repayment differential is. And also what your income to monthly savings ratio is. I ask because increasing monthly mortgage repayments comes at a cost to something else normally such as how much you can save each month.
It is normally advised that you should spend no more the 28% of your monthly income on mortgage, however official advice doesn’t always mirror people true experiences. To start things off my mortgage would go up to 32% of our household income and we would have to stop saving. I am not decided yet if that’s the way to go.
Thanks
As I’m in the process of upsizing, there are a few decisions to be made, for example what is reasonable as an income to mortgage repayment ratio. That is of course different to loan to value since mortgage repayments will be influenced by the term of mortgage and interest rate available.
I’m interested in what circumstances fellow moneysavers are in i.e what your monthly income to mortgage repayment differential is. And also what your income to monthly savings ratio is. I ask because increasing monthly mortgage repayments comes at a cost to something else normally such as how much you can save each month.
It is normally advised that you should spend no more the 28% of your monthly income on mortgage, however official advice doesn’t always mirror people true experiences. To start things off my mortgage would go up to 32% of our household income and we would have to stop saving. I am not decided yet if that’s the way to go.
Thanks
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Comments
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lenders go on x4.5 of your income for lending, what ever spare you have left after mortgage you must spend wisely and is really personal preference.
that percentage you quote is all relative, comparing a 40k income to a 100k income is comparing apples and oranges."It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Our mortgage repayment is 30% of our household income.
Savings (exc any surprises) is about 22% of household income.
Mortgage is about 4.22x income.
We do not have children or car repayments however. When we have a child those savings will be eaten up by childcare.0 -
My mortgage is currently 30% of my after tax income, but that is because I got the mortgage over 18 years rather than 25. I am over paying by £10 a week plus any unspent money at end of each week to get the mortgage paid off quicker. Savings currently are going towards gradual home improvements.Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.0
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Wait for it...0
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My mortgage is 3.2% of household income; but then I'm antique, got my loan donkeys years ago and it's interest only at 1.25%- 1/75% (we have two separate loans)...
So we just keep extending it; last time the higher % rate laon actually went down! Our lender is now offering renewals to 85 so it'll never be worth redeeming! In effect, we are stealing from the young who get much worse deals; one of the pleasures of being geriatric?0 -
ours is 28% of our income
savings about 36%Mortgage started 2015: £150,000 2016: £130,000 2017: £116,000 2018: £105,000 2019: £88,000 2020: £69,000 2021: £51,195 2023: MORTGAGE FREE!0 -
27% for me when it starts next monthAn answer isn't spam just because you don't like it......0
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25% for us with 25%ish for savings but the savings are for future works planned.
We got in the habit of living off one wage when we were clearing some debt before we took this mortgage on and its just kinda stuck.0 -
Not started paying it yet but when we do finally start it'll be 28% of our joint income and once the house renovations are done I hope to OP it up to about 32%Those who risk nothing, Do nothing, achieve nothing, become nothingMFW #63 £0/£5000
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with the costs of housing, holidays, basic bills......I'm beginning to think it may be worth my paying someone to be my wife
An answer isn't spam just because you don't like it......0
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