What percentage of take-home pay for mortgage?

Carrie28

Hi, all. I'm looking at getting my first home and am wondering what percentage of take-home pay I should use for a mortgage. I'm a divorced woman in her 50s without kids and don't drive (I live in a city), so I wonder if the usual third applies or if I can go a little higher. 

TheJP

Its your take home pay after taxes, pension etc. The lender will then ask you out of your take home pay what expenses do you have and then they can calculate what you can afford to borrow.

grumpy_codger

Carrie28 said:

Hi, all. I'm looking at getting my first home and am wondering what percentage of take-home pay I should use for a mortgage. I'm a divorced woman in her 50s without kids and don't drive (I live in a city), so I wonder if the usual third applies or if I can go a little higher. 

You have to think in terms of the 'disposable income', not 'take-home'.

(disposable income) = (take-home) - (essential/unavoidable expenses)

That's what lenders do.

RAS

It really isn't that simple. A lot depends on the condition of the house, your salary and your expectations.

I'd start by listing your normal expenses now, using the stoozing or lemonfool Statement of Affairs. That let's you know how much your could afford on top of your existing rent.  Includes your savings to cover deposit, fees, taxes and moving so you can budget for them.

Then work out what one third of your income would fund as a mortgage. Adjust your SOA to replace the rent with mortgage, add insurances and a repair fund.

Where does that leave you? 

Are you prepared to go without holidays? Do you have furniture, a good stash of decent clothing and house goods? Are you reasonably fit and able to do some DIY? Even if it's draught proofing, painting and decorating plus things like adjusting hinges and installing fittings?

Could you live with a lodger if necessary, to make extra income?  And knock a few £k off the mortgage?

gwynlas

All mortgages are based on affordability so you also also need to factor in your deposit so affecting loan to valuation.
What pension provision do you have?
If you are able to access a private pension as well as state provision you might be able to get a longer period thus reducung payments.
Once obtained it is up to you if you wish to make over payments to reduce the term.
As a city dweller you might choose to buy an apartment so need to consider service charges and ground rent.

poseidon1

RAS said:

It really isn't that simple. A lot depends on the condition of the house, your salary and your expectations.

I'd start by listing your normal expenses now, using the stoozing or lemonfool Statement of Affairs. That let's you know how much your could afford on top of your existing rent.  Includes your savings to cover deposit, fees, taxes and moving so you can budget for them.

Then work out what one third of your income would fund as a mortgage. Adjust your SOA to replace the rent with mortgage, add insurances and a repair fund.

Where does that leave you? 

Are you prepared to go without holidays? Do you have furniture, a good stash of decent clothing and house goods? Are you reasonably fit and able to do some DIY? Even if it's draught proofing, painting and decorating plus things like adjusting hinges and installing fittings?

Could you live with a lodger if necessary, to make extra income?  And knock a few £k off the mortgage?

Also assuming you are in the city of Bath , potential property outgoings need to be considered over and beyond mortgage outgoings.

As an example this seemingly  cheap 1 bed flat for the over 50s,  has horrendous service charges.

https://www.rightmove.co.uk/properties/158409008#/?channel=RES_BUY

Saver73

Carrie28 said:

Hi, all. I'm looking at getting my first home and am wondering what percentage of take-home pay I should use for a mortgage. I'm a divorced woman in her 50s without kids and don't drive (I live in a city), so I wonder if the usual third applies or if I can go a little higher. 

You could use this calculator as a guide as to how much you can borrow as a starting point based on your salary
https://www.moneysavingexpert.com/mortgages/how-much-mortgage-borrowing/
Or this calculator is more detailed https://www.nationwide.co.uk/mortgages/mortgage-calculators/borrowing-calculator/
other calculators are available!

Then from there you can work out how much of your take home pay you can afford to put towards a mortgage whilst leaving enough for utilities, food, social, travel etc.  Also, scoount for legal expenses, moving costs, stamp duty etc