Survey - how big is your mortgage?

KAP0365

We are looking at buying our dream home, but this would increase our mortgage from 157k to 365k. We are young and don’t have kids (we won’t have any) and will be saving on travel and energy costs. It would be an extra £450 a month on what we are already paying which is doable but wondering if this is an extremely high mortgage amount? If others are happy to share, how much is your mortgage and over how long? Thanks 😊 

Vestraun

Pretty pointless, you need to consider your own circumstances and affordability.

KAP0365

@Vestraun we were just interested in whether that’s considered a larger amount in today’s world, or whether it was actually more normal to have a larger mortgage these days. It’s asking for opinions more than anything, not sure why that’s pointless but hey, thanks anyway. 

Grabs39

KAP0365 said:

@Vestraun we were just interested in whether that’s considered a larger amount in today’s world, or whether it was actually more normal to have a larger mortgage these days. It’s asking for opinions more than anything, not sure why that’s pointless but hey, thanks anyway. 

Without knowing what you earn it’s hard to define what a larger mortgage is.

We earn 52k as a couple and our MA said we could borrow 240k.  We took out a mortgage for 170.  We might have children one day, and we hope to retire at 60 (anticipating pension age will go up to 70 before we get there) so wanted to keep things more flexible, rather than stretching ourselves with the mortgage.  We took a 30 year term, again for flexibility but intend to repay in 23 years, by the time we’re 50.

it depends what your priorities are.

KAP0365

@Grabs39 thanks, we earn £120k as a couple before bonuses and won’t have children, and probably won’t retire until 65/70 due to career aspirations and longevity. I didn’t think about extending the mortgage term and overpaying, that’s something I’ll investigate so thank you. We want to be close to elderly parents but still able to commute and we want a decent garden etc. We are looking at a new build so drives the price up a bit (south-east), which does make us hesitate! We have agreement in principles from two lenders who have said the max they would
lend us is around £460-500k on top of our deposit which just seems mental. The cost for this house would be around 23% of our combined take-home pay, but energy and travel bills would be cheaper so would balance out. Is there an accepted % or pay you should spend on your mortgage? 

LRmortgage

As a broker, I would say that your mortgage is on the low to average side for people with your incomes. However, it is all about what you are comfortable with and what you can afford, we don’t know if you have expensive hobbies, lifestyle etc. 

KAP0365

@LRmortgage thanks, no expensive hobbies, just several cats! Probably says a lot about us tbh haha

blue_max_3

My first mortgage was £35k. No-one could believe I had a mortgage of that size! That was back in 1985 though. Sold three years later for £70k!
Oh and the mortgage rate was 16.5%! Definitely another world.

RetSol

The rule of thumb which I used over the years when considering what size (repayment) mortgage I could afford (in the 1990s-2000s) was that my monthly mortgage payment plus other home-related non-discretionary spending (eg utilities, CT, insurance) should not exceed one third of my monthly take-home pay.  I got this principle from my father and it may be considered rather old-fashioned now - certainly pre-dates the 5x salary mortgage! 

KAP0365

@blue_max_3 my parents had a £45k (125%) mortgage in those days, they were on about 15%. They keep telling me I don’t know how lucky I am!!

KAP0365

@RetSol we have calculated that with utilities and insurance it would be about a third of our joint income, however we also want to see if we can perhaps overpay/make sure we have enough should rates rise to 6 or 8% for example. That’s when it would get tight, though we could do it, but not sure if we want to risk it in today’s world. Seeing the amount of people with larger mortgages on H2B makes us think we are being quite conservative...!!