Does this sound affordable?

rabbithopper3

My boyfriend and I are planning to buy a house in the next couple of years, and I was just looking for a bit of advice.
We earn a combined income of £36k, and we live in Lincolnshire. Our deposit will be between £31k-£41k (using a LISA), and we are going to save up about £4k for fees and then about £5k for furniture and the rest (£10k) as an emergency fund on top of this.
I have a rough estimation of what our possible monthly outgoings will be and seeing what sort of mortgage price we could afford.
Does this sound accurate, and if so, do you think feasible or do you have any suggestions?

(Monthly outgoings for both of us, combined, and we have about £2,600 in total together after-tax)
Mortgage: £500-£525
Energy/Gas/Electricity: £100
Home Insurance: £10
Water: £50
Council Tax: £110
TV/Broadband: £50
Phone Contract: £30
Life Insurance: £20
Groceries £300
Car Insurance/MOT: £170
Petrol: £100
Holiday Savings: £100
Emergency Savings: £100

This all adds up to between £1,640-£1,665, meaning there is between £960-£935 leftover between us each month.

Does this seem feasible and something that we could afford, or is there something I am missing?
Thanks

caprikid1

home insurance will be more than £10
I would want some money in for a car replacement fund,
All utilisties for £100 ? might be a bit low.
I would put money in for house maintenance and repairs of at least £200 a month on top of savings.

ec9wrr

£50 for water seems high. I pay £35 on a meter for two adults and a child.
Think carefully about if you need life insurance. Does your employer already offer some protection?
I agree house insurance will be more like £20 rather than £10.
Gas and electric £100 seems fine to me. I live in a 4 bedroom house and pay less (although it’s very well insulated and has smart thermostats)

sal_III

I strongly suggest that you live together in a rented for at least one year before committing to a joint property ownership. This should give you an idea of your household outgoings.

Your projections are OK for the most part, just the home insurance will be higher if you buy Freehold as you will need building insurance, which is more expensive than content insurance alone.

A £1k/year home repairs/maintenance fund is also a prudent decision.

Banks are rather conservative with the mortgage affordability checks, if they decide to give you a mortgage for X/month you are almost guaranteed to be able to pay it.

nik_k

Your figures are in the right ballpark, but a couple of observations:

Home Insurance: £10 - I'd say more like £20/month
Life Insurance: £20 - Seems low. My wife and I will be paying £45/month for our combined cover

Also consider TV Licence (£13/month) and possibly Income Protection insurance.

rabbithopper3

nik_k wrote: »

Your figures are in the right ballpark, but a couple of observations:

Home Insurance: £10 - I'd say more like £20/month
Life Insurance: £20 - Seems low. My wife and I will be paying £45/month for our combined cover

Also consider TV Licence (£13/month) and possibly Income Protection insurance.

Thanks for the insight, I will take that onboard!

rabbithopper3

sal_III wrote: »

I strongly suggest that you live together in a rented for at least one year before committing to a joint property ownership. This should give you an idea of your household outgoings.

Your projections are OK for the most part, just the home insurance will be higher if you buy Freehold as you will need building insurance, which is more expensive than content insurance alone.

A £1k/year home repairs/maintenance fund is also a prudent decision.

Banks are rather conservative with the mortgage affordability checks if they decide to give you a mortgage for X/month you are almost guaranteed to be able to pay it.

Thanks for the reply!
We will have about £10k saved as an emergency fund when we buy the house, and then £1200 per year after that. Or would you suggest increasing it to about £300 pm?

scoey8

Gas and Elec could be possibly be a bit lower, There are 4 of us in a 2 bed end terrace and i pay £80 per month. Also you might save £10/15 on the water. Looking at your list and what you have accounted for it seems you are pretty switched on so i would say go for it!

One thing though you say £36k combined salary, is this after tax as usually it would equate to around £2350 a month, not £2600.

p.s i would also look into overpaying on your mortgage if possible, £100 a month will take years off the total term.

rabbithopper3

scoey8 wrote: »

Gas and Elec could be possibly be a bit lower, There are 4 of us in a 2 bed end terrace and i pay £80 per month. Also you might save £10/15 on the water. Looking at your list and what you have accounted for it seems you are pretty switched on so i would say go for it!

One thing though you say £36k combined salary, is this after tax as usually it would equate to around £2350 a month, not £2600.

p.s i would also look into overpaying on your mortgage if possible, £100 a month will take years off the total term.

Thanks for the reply! And I was calculating the combined salary from us both having £1,300 after tax and adding it together.

Cakeguts

Your emergency fund is too low. It won't cover the mortgage if you get ill and can't work. There are no benefits to pay a mortgage if you get a serious illness. You have to have sufficient savings to pay the mortgage if you are not working.



All the car budgets seem high to me. If you buy a house near to where you work or where one of you works you could save a lot on car bills which is just wasted money.

rabbithopper3

Cakeguts wrote: »

Your emergency fund is too low. It won't cover the mortgage if you get ill and can't work. There are no benefits to pay a mortgage if you get a serious illness. You have to have sufficient savings to pay the mortgage if you are not working.



All the car budgets seem high to me. If you buy a house near to where you work or where one of you works you could save a lot on car bills which is just wasted money.

Thanks for the reply. Would you suggest to increase the emergency fund to about £250p/m? Also, in regard to the car budget, it is including the insurance (£500 a year for both of us) and `about £500 for the MOT (we both have older cars), so about £1k in total for each car.