Is Our Mortgage Sustainable? Advice Needed

Lets_fly

We are first-time buyers, and our mortgage for a house of £575k has been approved with an interest rate of 4.44. Loan term is 28yrs. Got it with Nationwide with 5.5x of salary and they counted my annual bonus. We are putting down a £110k deposit(19%).So the mortgage amount is 465K and rest balance we are paying as deposit.  We are about to exchange the contract in 1 or 2 weeks.

 My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month. I am 46yrs old and the only earner; my wife does not work, and we have a 13-year-old son.

I made a rough calculation of all my outgoing it's coming to £4100 .

Given the current cost of living, I would like to know if this setup is sustainable. Any advice or insights from those in a similar situation would be greatly appreciated. Any thing I can do to make it sustainable 

kingstreet

Can only suggest you add the remainder of your living expenses and establish exactly what you've got coming in and going out. Only you can say what you will feel comfortable paying.

TheSpectator

Without knowing details of any other commitments it's impossible to answer.

You haven't said how long the fix is but you should be prepared for any scenario, e.g. could you manage if your mortgage rate was 5% plus after the fix ends?

Phil_82

That’s a pretty hefty mortgage payment—about 58% of your take-home pay—which could feel tight, especially with a dependent and only one income. Have you mapped out all your fixed costs like bills, groceries, insurance, and other essentials? If those take up a big chunk of what’s left after the mortgage, things might get tricky.

An emergency fund is also key. Do you have at least 3–6 months' worth of expenses saved? With just one income, having a safety net is crucial in case something unexpected comes up. It might also help if your wife considers part-time work at some point. Even a little extra income could make a big difference in breathing room.

caprikid1

For 6 months of course 12 months maybe ..... 5 years not a chance.

The only way I would be considering this if my wife was going back to work.

House repairs, car repairs, holidays , Christmas Birthdays, combined with loss of annual bonus ?

What size house is this in what location ? Is it above your housing needs ? 

BikingBud

Lets_fly said:

We are first-time buyers, and our mortgage for a house of £575k has been approved with an interest rate of 4.44. Loan term is 28yrs. Got it with Nationwide with 5.5x of salary and they counted my annual bonus. We are putting down a £110k deposit(19%).So the mortgage amount is 465K and rest balance we are paying as deposit.  We are about to exchange the contract in 1 or 2 weeks.

 My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month. I am 46yrs old and the only earner; my wife does not work, and we have a 13-year-old son.

I made a rough calculation of all my outgoing it's coming to £4100 .

Given the current cost of living, I would like to know if this setup is sustainable. Any advice or insights from those in a similar situation would be greatly appreciated. Any thing I can do to make it sustainable 

What has it been stress tested to 8%, 9% and what would that do to the monthly payment?

If it increased to that amount how would you fund it?

Is your wife able to work?

Can she generate the income necessary to cover the increase in mortgage?

What happens if you lose the bonus?

Do you have a slush fund?

Can you afford to overpay and or save to build the slush fund such that you can cover any "unexpected" arisings?

I would offer that if you cannot answer positively and cover these aspects then you are overreaching and should very carefully consider your position before committing.

LilSmiler

Also note that your mortgage term is until you're going to be 74...

Not helpful I'm afraid, but I would have been asking these questions long before it got to the contract exchange stage..

ACG

BikingBud said:

Lets_fly said:

We are first-time buyers, and our mortgage for a house of £575k has been approved with an interest rate of 4.44. Loan term is 28yrs. Got it with Nationwide with 5.5x of salary and they counted my annual bonus. We are putting down a £110k deposit(19%).So the mortgage amount is 465K and rest balance we are paying as deposit.  We are about to exchange the contract in 1 or 2 weeks.

 My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month. I am 46yrs old and the only earner; my wife does not work, and we have a 13-year-old son.

I made a rough calculation of all my outgoing it's coming to £4100 .

Given the current cost of living, I would like to know if this setup is sustainable. Any advice or insights from those in a similar situation would be greatly appreciated. Any thing I can do to make it sustainable 

What has it been stress tested to 8%, 9% and what would that do to the monthly payment?

If it increased to that amount how would you fund it?

Is your wife able to work?

Can she generate the income necessary to cover the increase in mortgage?

What happens if you lose the bonus?

Do you have a slush fund?

Can you afford to overpay and or save to build the slush fund such that you can cover any "unexpected" arisings?

I would offer that if you cannot answer positively and cover these aspects then you are overreaching and should very carefully consider your position before committing.

I suspect its a 5 year fix so probably means tested at a lower figure (maybe 5-6%). 5 year fixes are sort of exempt from the stress testing in that it can be done at the rate payable. 

ACG

Go through your bank statements. Have a look at what you spend on everything in an average month. Add it all up and see where your at. 

Is the new house bigger/smaller than your current home? Will council tax and utility bills be higher? Factor those in if so. 

Lets_fly

BikingBud said:

Lets_fly said:

We are first-time buyers, and our mortgage for a house of £575k has been approved with an interest rate of 4.44. Loan term is 28yrs. Got it with Nationwide with 5.5x of salary and they counted my annual bonus. We are putting down a £110k deposit(19%).So the mortgage amount is 465K and rest balance we are paying as deposit.  We are about to exchange the contract in 1 or 2 weeks.

 My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month. I am 46yrs old and the only earner; my wife does not work, and we have a 13-year-old son.

I made a rough calculation of all my outgoing it's coming to £4100 .

Given the current cost of living, I would like to know if this setup is sustainable. Any advice or insights from those in a similar situation would be greatly appreciated. Any thing I can do to make it sustainable 

What has it been stress tested to 8%, 9% and what would that do to the monthly payment?

If it increased to that amount how would you fund it?

Is your wife able to work?

Can she generate the income necessary to cover the increase in mortgage?

What happens if you lose the bonus?

Do you have a slush fund?

Can you afford to overpay and or save to build the slush fund such that you can cover any "unexpected" arisings?

I would offer that if you cannot answer positively and cover these aspects then you are overreaching and should very carefully consider your position before committing.

Honestly, I did not think of all these things. May be have some £20k slush fund that's all .  

MWT

Lets_fly said:

 My take-home income is £4,200 per month, and the mortgage repayment will be £2,430 per month. I am 46yrs old and the only earner; my wife does not work, and we have a 13-year-old son.

What are the realistic prospects of significant salary growth between now and retirement, and is your type of work and your company likely to be sustainable until you are 74...?

Do you have a significant private pension that is well funded by your employer?

The sort of level of debt you are taking on as a percentage of your income is more sustainable if you have credible expectations of significant income growth so you could overpay and reduce the term to fit in with a lower retirement age...

The fact that you are asking, suggests you are feeling less than fully comfortable with where this is heading...

... but if for example you could see your wife working and earning a decent wage once your son is a little older then this doesn't look so unsustainable.