Mortgage payments as % of income

Daz1

Read yesterday in the paper that mortgage payments as % of income varied between 17 and 24%. When I took out my mortgage the payments were 33% of our take home. When my OH stopped working for 8 months, that jumped to approx 60%. It was stressful but we still enjoyed a reasonable quality of life, having meals out once or twice a month, going to the cinema etc. We couldn't afford any major outlay eg new furnishings or major renovations etc. but were satisfied with our lot and opted for free or cheap things to do eg gardening or BBQ at home when we got bored and would have been tempted to go on a shopping spree. ......I am concerned that I am slightly overstretched comparing myself to the average, but (touch wood) still live comfotably, admittedly without luxuries all the time but enjoy a reasonable standard of living. How does this compare to others experience??? Is the 17-24% calculated on gross or net pay?

~Beanie~

I've just worked mine out and my mortgage is 20% of my net pay.

[Deleted User]

Gah, worked it out, the mortgage is 37% of my monthly after tax wage, 21% of our joint wage. Expecting a big payrise at work in the summer, so this should hopefully drop down to 30% of my wage (assuming a 25% payrise - i've just jumped a band at work so this should happen).

Only scary thing is... this is Interest Only.. I was planning on switching to repayment in the summer - then it'll jump to 59% of my wage. Assuming a good payrise, this'll be down to 50%... effectively though, i'll only drop £100 in disposable income.

Aggh! Might stay interest only for another year till i get another payrise

foreversummer

40% of joint income with a very good quality of life. Enjoy the simple life really, not fussed by fancy holidays, like being at home with the family and the simple pleasures. Have a lovely home and garden in a quiet area in the country.

Definitely wouldn't swap back to the old house where mortgage was less than 20% of joint, but trade off was cramped accommodation, noisy neighbours and not such a great area.

We would definitely prefer a really nice home rather than lots of disposable income. But it is down to individual preferences really.

Foreversummer

Rimmer

25% net of mine and my partners' income (not interest only mortgage). about to be a bit higher cos getting new 5 year fixed mortgage in september. we'll be 29 and 28 years old then so plenty of time to get better jobs/promotions in those next five years!

zebedy

Just worked mine out and it's 24% of my take home pay and i still have a very comfortable life and enough money to have a good social life

Gailk

Ours is 17% of our joint income.

zowoods

Ours is 32% of joint income and this is repayment, but worry is the other monthly outgoings related to mortgage such as insurances etc and bills which then account for 60% of joint income then spend rest of paying off cc bills of own and living!
Don't have a bad level of this out at least couple of times a month for dinner etc but all set to change as I am expecting in dec and really concerned once my salary goes as I earn more than husband and his salary will not be enough to cover the above!! oh dear....

john_s_2

Mine's 13%

This is based on joint take home pay. Interest + Endowment + monthly overpayment to make up for (expected) Endowment shortfall. Income does not include child benefit or child tax credit (12.5% if included).

Bought flat 16 years ago.

When we bought it we were paying 12.25% interest and I was the sole earner while my wife was on a career break with the babies. I just dug out an old payslip (me, a hoarder??!) and that worked out at 60%. Those were grim days... But it taught me everything I know about money saving and am now enjoying the fruits of a higher disposable (after housing costs) income.

And I should have said... so are the wife and kids!! ;-)

James_H

Mine is 28%, but I'm putting it up to 33% by cutting my term in order to clear the mortgage faster.

They key thing is when the first home was bought. I bought mine four years ago and, like many others buying relatively recently, have had to stretch to reach the current high prices.

The average of 17-24% is likely to be across many mortgage payers, not just those taking them out for the first time. The average mortgagee will have bought for the first time a while ago and started off paying a higher rate of interest than now, like john s, and now benefit from lower repayments while having a higher income.

Woodgnome_2

Was about 27% of our joint income. Since my wife left work after the birth of our baby 17 months ago its gone up to approx 45% of our single income.

Struggling with money at the moment as all our savings have now been spend and I plan to switch to an interest only in June for a couple of years while my wife continues to take care of the nipper.