We’re thinking seriously about moving to a bigger place becuase we need some more space and we think we can afford it at the moment, plus the market seems to be good for us selling a smaller house and buying a bigger one.

Anyway, our mortgage payment is about 15% of our net monthly income at the moment and I guess it will be 38% in the future. I am interested to know what the average is for you guys, is this a stretch or am I worrying about nothing becuase we have it too easy at the moment…

For the record I live in Denmark, but I don’t see that much difference, having lived in the UK too.

~20% at the moment but on a tracker so could get higher. that’s comfortable. ~40% would be uncomfortable.

If the BofE interest rates went to 3% could you still afford it?

If the BofE interest rates went to 5% could you still afford it?

I’d be very concerned at the moment, as not only are the BofE interest rates the lowest ever, but the standard mortgage mark-up seems the highest ever.

If one of you lost there income, how long could you carry on paying without falling deeper into debt?

Worse we ever had was when interest rates went to 16%, and our mortgage took all my income.

Of my net income, c30%. Of our joint income (not incl the effect of maternity pay), c20%.

When it was more like 40%, it was really hard. Trouble is, it’s all the other costs that go with a bigger house (heating, etc.) that seem to eat into the disposable income.

About 40% (on a five year fixed rate – variable rates bother me). The joy of being a young-ish person living in the South East in a city that people want to live in…

Some of my colleagues will be in real trouble if the mortgage rate goes up even though a lot of them are on interest only mortgages. We’ve been talking about what might happen in the next year recently seeing as I am now pretty damned convinced that a savage double dip recession is less than 6 months away.

30% of our combined net. If interest rates go silly, I’ll have to move into my bike bag!

Depends entirely how much you earn surely?

If you earned £100k net and spent £40k on your mortgage you’d still have £60k to live on.

Of course job security is a factor as well if you are earnign a lot and thinking of taking out a big mortgage.

BofE rates are not relevent because we can get a 4% fixed rate mortgage and as I said, we live in Denmark.
Extra costs will not be too much, heating etc will be lower as it is better insulated and newer (seller has to state heating costs etc over last year and they are 30% lower than our current house)

If one of us lost our job we’d be in trouble but I think we are reasonably safe.

Bout 20% at the mo I think.

19% of joint income

Looks like 38% is high then…

25% of joint most months and i’d rather it was less,

the joy of moving is it cost’s you money every direction you turn, plus the new house will end up getting decorated, things won’t fit, curtains will be too small/short/narrow. When we moved it meant a second car too so i’d say our outgoings have doubles in the last year.

39% here.

We have an ace house and can afford for the wife to be a full-time mum but I don’t get to buy many shiny bits for my bike.

Priorities, innit?

I think we can more or less afford it, but our spare income will be dminished considerably meaning compromised holidays, bikes and general fun, but on the other hand, the money will be going into something rather than being frittered away.

My concern is more when we need to buy a new car or is there is an unexpected event that requires money.

I suppose it’s our decision

oddjob

It also depends how old you are, and whether you’ve kids or not (but then with the DK system you’ll not face such an income drop if you did).

But IME, ok for a large mortgage when young and before kids, but wouldn’t want one after then

In our 20’s ours was probably 40% (high interest rates too), and by our 40’s (low interest rates) it was nearer 10% – although the actual mortgage was for a 3x greater sum…

mines is 26% but I have no kids and lead a frugal life. I have heard stories from my parents about when their mortgage took up the majority of their income and how it affected life in general, im petrified of getting into a similar situation.

I personally wouldnt want to have 38% committed to a mortgage especially when unexpected things inevitably appear that need cash.

We have 2 young kids and are in our mid 30s. but we both have good jobs and earn reasonable money (OK we both have MBAs and our joint income is sufficient)

I think it is more a question of deciding to give up the yearly skiing holiday and have slightly older cars in return for a bigger house.

As a general rule, a mortgage of 2.75 times your main income and 1 times your second is a prudent sustainable level, leaving you enough money to live your life.

Many people borrow far far more than this these days, but when interest rates rise, they are stuffed.

The temptation to borrow too much has fuelled house price inflation and left millions heavily in debt to the banks. Many have no choice but to be overleveraged now. They can blame the people who had no self restraint and who caused the huge bubble that has built over the past 25 years!

It’s not been these people alone however, they had plenty of encouragement:

1) Successive governments for relaxing financial regulation in their clamour for increased tax revenues. They allowed lenders to become reckless. They also taxed the backside out of the already damaged private pension system, thus fuelling the buy-to-let market.

2) Banks for throwing far too much money at people and creating cheap introductory rates at the expense of standard variable rate customers! They created the mortgage tart – people who continually swithched from one cheap loan to another.

3) The financial institutions that provide personal pensions/endowments, for lying to savers. This brought about a loss in confidence in this sector. It was the poor value of these traditional pensions, their inflexibility and the fact that annuities don’t form part of a policyholder’s estate when they die. This exasurbated the closure of company final salary schemes. Thesed combined started the buy-to-let boom – people just wanting an alternative to protect themselves in retirement (and their offspring).

4) Estate agents and developers who inflate prices, especially new build.

The young have no chance of buying property at sensible prices. Our system is well and trully broken. The only people who can have things like this will be top earners and rich foreign investors. The rest will have to pay through the nose and rent.

About 23%, which only serves to make me wonder… WTF do I waste the rest of my income on?

50% here – but as stated above depends on how much disposable income you have after paying your mortgage, also what is your long term plan?

i.e. are you planning on paying your mortgage over 10, 15, 25 years?

30 year mortgage I think.

LHS – do you earn a lot of money or not. I suppose it is easier to spend 50% of your income on your mortgage if there is still £5000 left over…

We are approaching 50% but we get to live in a really nice part of Devon in a nice house and this affords us the luxuary of having loads of free activities on our doorstop so need very little disposible cash, have a 3 years to go on our fixed and by then hopefully our income should have risen a little.

I am happy riding a 11 year old hard tail and driving a couple of pretty battered old cars. Should be growing lots of veg by next summer so even more money saved.

My philosophy on life is to earn as little as absolutely nescessary and spend as much free time doing the things you really love doing.

Mines 11%!!! Crikey! That’s of our joint net income.
It is bizarre though that we can’t buy a bigger house like we want as the banks won’t lend us another £40k to do so as we don’t earn enough.

I think it is more a question of deciding to give up the yearly skiing holiday and have slightly older cars in return for a bigger house.

+1

Currently around 47% of my income (the wife is off for maternity, so very little coming in), but that is 3 years into a fixed rate of 5.98%
I have a skip of a car and holiday around the UK, but we decided a good house in a good place was the best investment we could make for our preferred lifestyle. We don’t buy many take aways, we don’t drink much, don’t have Sky, don’t have a 52″ surround sound with blu ray player – but we’re happy enough 🙂

Give it another 3 years of repayments and it’ll be more than manageable.
We can live comfortably enough on the other 53% to not feel too poor, just more major alterations we’d like to make are going to have to wait.

Depends on what you class as a lot.

I earn good money, and after paying my mortgage I am not compromising on my lifestyle.

20% thereabouts, for us both

15% net monthly joint income

22% net monthly personal income

I want to be mortgage free in 10 years which will be ace. Why live in misery now and worry about keeping your house if everything goes pear shaped? Rates could go up to 20% and I could still pay my mortgage. 😀

Between me and the missus about 35% but overpaying at the moment as wanna get mortgage paid of by about 51/52.

If shit hits the fan will have to go to interest only

0% here.

By being a bit frugal over the years and not moving to a bigger house just because our friends were, it’s all paid off and I could afford to take early retirement at 50.

9% of net income & I like it that way, but my sister in law has trumped us and they have paid theirs off before she was 40!

I’ve owned a house since the mid 90s and always borrowed as much as I could – worked out well for me as my current house is worth about 10x my salary. Always lived sensibly/boringly and the more I earnt the more I saved rather than the more I spent – as such I could put over 2/3 of my take home into the mortgage though it was 1/4 when I bought the house.

When we took ours out ~5 yrs ago (repayment, variable, offset) it was something like 37% my net and 27% for my OH – tho’ the backup was that we had sufficient room that if interest rates did increase we could let out a room (or two if we got really stuck). Managed to rationalise some savings too initially to offset it a bit. OH was off work for a year a few years ago, fortunately had a decent redundancy payout which covered her repayments plus she was pretty frugal, and held onto a decent lump of it. Although the repayments are dropping a lot more of late we’ve overpaid throughout and have something like 6-7 years left to pay at the notional rate, or a lot less at the rate we’re going. Just as well ‘cos at 47 my pension’s rubbish (not helped by Equitable Life and a few other issues) and the cash not going into the mortgage needs investing elsewhere…

(FWIW my car croaked 5 yrs ago and I’ve not replaced it, my OH’s car is her old company car, now 160k+ and 7 yrs old, and we’ve cut our cloth accordingly with holidays with 3 away from home in 5 yrs – tho’ we’re not feeling hard done by, I should add..)

The mortgage will be about 3,5 times our joint income.

We’re looking at the sums at the moment, but it is starting to look like a true middle class dilema – are we prepared to sacrifice the skiing holiday when we need to replace the car.

I’m almost ashamed of myself.

0% here, but over the 11 years we had a mortgage it varied between about 15% and at one point about 40%.

in 2 more pays 0% 😆