How much would you borrow?

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  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    If you are on the "spend as you earn" scheme, then a lot of folk will borrow the maximum they are allowed to borrow.
  • MovingForwards
    MovingForwards Posts: 16,921 Forumite
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    I would borrow £80k max, looking to try and borrow £70k.

    Do not like the idea of being mortgaged to the hilt.
    Mortgage started 2020, aiming to clear it in 2026.
  • kingstreet
    kingstreet Posts: 38,767 Forumite
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    Do a budget and work out your income and outgoings.

    Work out from that how much you will feel comfortable paying as a maximum each month.

    Get a rate per £1,000 for the product which suits you best.

    Divide your comfortable maximum payment by the rate per £1,000.

    That's the amount you would feel comfortable borrowing.

    For example, on a recent case;-

    £1,400 was comfortable monthly maximum

    on a 35 year term, the rate per £1,000 for a five year fix was £3.36755

    £1,400 divided by £3.36755 is £415k maximum mortgage.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Accountant_Kerry
    Accountant_Kerry Posts: 628 Forumite
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    Thrugelmir wrote: »
    Then overpay the mortgage. Rather than spend money on takeaway coffees for example. Take control of your own destiny.

    That does presume you get takeaway coffees which I personally don't :)
    Mar 24 - Mortgage Balance £249,794.45
    Credit Card - £8,182.23 + £4,731.65
    Goals: Mortgage Free by 2035, Give up full time work once Mortgage Free, Ensure I have a pension income of £20k per year from 2035

  • downhillfast
    downhillfast Posts: 968 Forumite
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    We took a 95% mortgage a couple of years ago for approx £348K at 3.89%! :eek: At the time we earned approx £90k a year combined and we were very nervous about a £1700 mortgage payment every month.
    Fast forward to now and we've managed to overpay a bit and will be looking to remortgage in January and are hoping for a 80-85% at a rate begining with a 2... but we will overpay each month as we know we can now sustain a £1700 payment.
  • Accountant_Kerry
    Accountant_Kerry Posts: 628 Forumite
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    kingstreet wrote: »
    Do a budget and work out your income and outgoings.

    Work out from that how much you will feel comfortable paying as a maximum each month.

    Get a rate per £1,000 for the product which suits you best.

    Divide your comfortable maximum payment by the rate per £1,000.

    That's the amount you would feel comfortable borrowing.

    For example, on a recent case;-

    £1,400 was comfortable monthly maximum

    on a 35 year term, the rate per £1,000 for a five year fix was £3.36755

    £1,400 divided by £3.36755 is £415k maximum mortgage.

    Good principle, kind of like a reverse mortgage calculator
    Mar 24 - Mortgage Balance £249,794.45
    Credit Card - £8,182.23 + £4,731.65
    Goals: Mortgage Free by 2035, Give up full time work once Mortgage Free, Ensure I have a pension income of £20k per year from 2035

  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    Accountant_Kerry wrote: »
    That does presume you get takeaway coffees which I personally don't :)

    there will be other things....

    The budget is about priority plan for your money.

    The saying is you can only spend each £ once so decide what you want to spend it on

    Stuff or a house.

    Basic living costs(before buying/rent) for a couple are still around £1k per month(many do it for less)

    what do you want to do with the rest.

    some measures are in equivalents, pints of beer, loaves of bread or

    you can work it out in how much of a house does something cost)

    (say 30y 2.5% mortgage)

    fancy car £250pm £63k
    fancy holiday £2k £45k
    eating out. £100pm £25k
    fancy clothes £40pm £10k
    tv package £40pm £10k
    mobile phone £40pm £10k
    ...
    nicer house

    try doing the SOA

    http://www.stoozing.com/calculator/soa.php
  • SG27
    SG27 Posts: 2,773 Forumite
    edited 13 February 2019 at 1:37PM
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    foxy-stoat wrote: »
    I think you should focus on the LTV % - I would be very uneasy about taking out anything higher than a 90% mortgage in this market regardless of income to repayment percentages.

    10% is not enough in a property if the market should take a slight dive for example.

    As for how much you should borrow - the lenders normally wont let you borrow what they think is unsustainable - that figure is normally lower than yours.

    I sold my house in July to a couple with a 90% mortgage. Looking at whats on the market now they are certainly in negative equity already! I would not want to be in they position. Especially as its a small house with no long term potential...
  • SG27
    SG27 Posts: 2,773 Forumite
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    My mortgage is 25% of my wife and my take home pay and its the absolute max I would want. I am overpaying currently to keep future payments down once interest rates rise.
  • charlie792
    charlie792 Posts: 1,744 Forumite
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    personally when we remortgaged we borrowed 1.5 times our joint income on the basis that we wanted to be able to afford the mortgage and all bills with a bit left over, manageable on one salary if push came to shove.

    At the appointment with the bank we discussed reducing our term and thus upping our monthly payments - I said we wanted to pay £360 max, they said we could afford £2000 :eek:
    MFW 2020 #111 Offset Balance £69,394.80/ £69,595.11
    Aug 2014 £114,750 -35 yrs (2049)
    Sept 2016 £104,800
    Nov 2018 £82,500 -24 yrs (2042)
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