Monthly Mortgage Payments too much?

twinks101

Hi everyone! 

First time buyer here and slightly concerned as to how much is TOO much to pay each month for our mortgage? 

We’ve been told that ours will be £1500 ish- which means split with my partner, And including all bills each month it will take about half my monthly pay. 

Is this the norm? Any advice would be greatly appreciated! 

getmore4less

No fixed answer.

For some 50% is too much others a walk in the park.

what does your budget tell you?
if you don't have one try this format.

https://www.lemonfool.co.uk/financecalculators/soa.php

RelievedSheff

We have always worked to 25% of our take home pay for mortgage payments and we have been pretty comfortable with that and still lived a life 😄

MaryNB

My mortgage is 28% of my take home pay. I don't have a car or dependents but live alone so pay more in bills than if I was sharing. I'm very cautious with money so didn't want my mortgage to exceed 30% of my take home pay. If I include bills it's just under 40% of my take home pay. 

It entirely depends on your circumstances. If you're planning on starting a family or want funds for a large wedding during your fixed terms you might want to keep it low. If you're pretty confident you'll have a payrise by the time your term ends and you don't need a large disposable income you may want to increase the payments to save on the overall interest. Bear in mind most lenders let you overpay by 10% of the balance each year. Make use of the breathing space

Redwino222

I wouldn’t be comfortable with half disposable income going on housing costs.  At the moment mortgage, council tax and insurance is 17%.  Planning a move but my limit is 30%.

twinks101

Ahh thanks so much everyone for all your thoughts and advice! 

To be honest I’m not entirely sure-I’ve always been really careful with money, and my partner has too. He seems to think that £770 Each is fine for our mortgage payments (monthly we’re on about 2000 Each) but I guess once bills etc were added on I rounded it up to £1k and I guess I’ve been slightly panicking about it. We’re not planning on kids or weddings anytime soon and we’re guaranteed pay rises (hopefully!) in our jobs. I guess I’ve been worried as I just want to save as much as possible and I’m not used to such big payments each month! 

Redwino222

Common advice is 50% for needs, 30% for wants and 20% for savings.

do our your budget am check you would be able to save at least £200 per month.  

Factor in all your essentials, food, car, petrol, insurance, pension, water, electricity, gas, council tax.  Then all your wants, tv, Brad and, phones, eating out, gym membership, holidays, presents.

also the first year in a new house is expensive - painting, decoration, furniture, etc, etc.  There is always loads you didn’t think of.  I remember o totally forgot about buying an oven, lawnmower, iron, and vacuum cleaner.  That was an expensive month.

grumiofoundation

twinks101 said:

Ahh thanks so much everyone for all your thoughts and advice! 

To be honest I’m not entirely sure-I’ve always been really careful with money, and my partner has too. He seems to think that £770 Each is fine for our mortgage payments (monthly we’re on about 2000 Each) but I guess once bills etc were added on I rounded it up to £1k and I guess I’ve been slightly panicking about it. We’re not planning on kids or weddings anytime soon and we’re guaranteed pay rises (hopefully!) in our jobs. I guess I’ve been worried as I just want to save as much as possible and I’m not used to such big payments each month! 

~£500 on bills seems quite high? Does that include car costs? 

As other posters have said whether this is ‘too much’ depends on a lot of factors. 

Of the remaining ~£2000 how much do this do you estimate you will not spend?  If >£1000 then seems fine, if for example <£100 then (personally) I wouldn’t be very comfortable at all. 

getmore4less

A factor many miss is inflation and wage growth. 

You are £4k net, if housing is £2k, the £2k is plenty for a couple.

If that purchase is going to allow you skip a move that is future savings

If early in careers with visibility of wage rises then it won't take long for the 50% to drop. 

Another factor is LTV and rates. 
Often there is a significant drop in interest as the equity builds up. 

What amount rate and term do you have? 

£2k net is around £30k, joint £60k joint say 4.5 times  £270k,  £1, 500 pm would be a lot even if high rate. 
If 4% that would be 23year term. 

£1500 would support  £300k 25 years 3.5% 

5 years paid off(saved) £41k.

Takes
90% LTV under 80%
85% under 75%
For lower rates. 

twinks101

Ah apologies! No bills won’t be £500- ive put the bills roughly at around £200 each including council tax (which I won’t lie, Didnt even cross my mind!) so rounded up that I would be paying around £950-980 per month for the mortgage and bills-that’s after it has been split with my partner. 

I guess that’s not TOO bad when I think of it. Gives around £1000/900 Probably afterward I’ve paid my half of the mortgage and bills, not including things like travel, car tax etc. 

We got 25 year term with a rate of 1.74. Which I thought was quite good? But this is all new to me-I’ve been trying to read up about it all and trying to understand as much as I possibly can...

getmore4less

£770*2 £1540
25years 1.74% that's £372k mortgage. 

Unless you have a lot of deductions and your gross is more like £40k rather than £30k each how did you get 6.2 times income?