Cost of Mortgage Advice

Caporegime
Joined
21 Jun 2006
Posts
38,372
I don't think that is true. I was earning 25k a year (about £19k after tax?) and living on my own. I was paying £640 a month for my mortgage which was around 40% of my income. People prioritise things differently, I prioritised paying back my debt. Others would rather have a nice car on finance etc.

P.S I think you've made a typo in your footballer example. My maths is not that good but 40% of 100k is 40k. So the footballer would have 60k a week spending money, cheeky bugger ;)

you do know footballers pay tax right?
 
Soldato
Joined
27 Aug 2005
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3,610
pointless question. every answer will be different and unique to everyone's personal circumstances with only the wealthy on here willing to share or should i say brag?

a more suitable question would be how much is your mortgage payment as a percentage to your monthly take home pay. albeit that also has issues as the more you earn the more disposable you have so you can afford to pay more towards a mortgage and still have a ton of money left over.

for example a footballer on £100K a week could afford to stick 40% towards a mortgage and still have £5K+ a week spending money.

however someone earning £20K a year would struggle to put more than say 20% towards a mortgage.

also the amount borrowed tells you nothing. you could borrow £135K against a million pound house or a £150K house.

Not really, its just interesting to hear on other members current situation. Some people like to have a cheaper mortgage and more disposable income and vice versa etc.
 
Soldato
Joined
25 Mar 2004
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15,686
Location
Fareham
I would like to hear what % of net monthly salary people are paying on their mortgage including rates. That would be interesting.

My mortgage is on a longer term (35 years) so a bit lower than usual, but it would be perfectly fine on a 25 year rate, I just choose to pay less each month as I wanted some cash to do other things.

I'm also on a tracker that has recently worked in my favour, using my pre-recent drop rate my mortgage + monthly expenses are around 32% of net pay.

This cost is made up of mortgage + utilities (gas, elec, water, internet, simo phone) + life insurance + council tax.

This is not including food/petrol/car/home insurance costs, so those sit on top of that 32%. Maybe 45% or so once I factor those in on an average monthly rate.
 
Man of Honour
Joined
25 Oct 2002
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31,706
Location
Hampshire
To the OP: Shop around for insurance (if you really want it), and consider a shorter term. Why not go for 25 years instead of 30 years?

Regarding the % of net, I can see both side of the argument. On the one hand, it might be vaguely interesting if taken with a pinch of salt. But on the other, it's a bit of a meaningless stat when looked at in isolation:
  • People might have massive savings meaning that high %age of net income is still extremely affordable. People often only consider income when it comes to ability to spend, overlooking capital. You could have a situation where someone pays 70% of their net income towards mortgage but is much better placed than someone paying 20% of net income.
  • People have different mortgage terms, the last time I remortgaged I took a 7yr mortgage and hence was paying more percentage than had it been say a 20 year mortgage, so less 'affordable' in the short term but more 'affordable' in the long term
  • People have vastly different outgoings on top of their mortgages - debt repayments, alimony, school fees, council tax, other bills etc etc. I'd say it's more interesting to know what percentage of disposable income plus mortgage repayments goes on mortgage repayments. You could have someone with a low percentage of net income going on mortgages but they might be paying out hundreds every month for a car, hundreds on CCs/loans etc compared to someone with a higher percentage but is actually left with more disposable income at the end of it, even if they have the same salary.
 
Soldato
Joined
18 Oct 2002
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6,669
I would like to hear what % of net monthly salary people are paying on their mortgage including rates. That would be interesting.

When we took the mortgage out: 15% (including rates and insurance). 25 year term, 25% deposit.

Now that we are down to one lower salary: 37% (ouch!)

I've taken advantage of the COVID mortgage holiday period, so only paying rates and insurance currently: 6%

I'm investing most of the difference in various things, as my exposure to property is currently too high - I aim for 20% of net worth, but currently it's 25%, so it would be good to get that down so the other assets (stocks, bonds, gold) can do their thing.

I'm not one of those people who want to pay the mortgage off ASAP - my enthusiasm for that is directly proportional to the interest rate. At 2.08%, I would rather invest in other assets. Once it hits 5%, I'll be more keen to pay it off by diverting savings / selling other assets.
 
Permabanned
Joined
7 Aug 2017
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2,141
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by the tower the one up north ..
hmm and here i come .. we were at nearly the same in the 90's bought a nice house big garden .. then the crash hit job's went sideways and we lost a bit ..luckily we sold the house ..paid off most of our debt ..
so consider this .. as i'm thinking it's here again .. but as long as your not stretched and can live on one wage things should be good ..
btw just bought a house again after 9 yrs of saving .. but slapped a 10yr fixed on it .. times are going to get rough ..we put a 35% deposit down ..and at 53 it should be ok ..lol
 
Soldato
Joined
30 Jul 2008
Posts
4,718
Location
Surrey
We are looking at 3 bed house with thefthe

300k mortgage
100k deposit
30 year term

It's a huge mortgage but house prices are ridiculous where we are. Would actually work out cheaper than our rent currently.

Still a scary amount to be borrowing :/
 
Soldato
Joined
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3,610
We are looking at 3 bed house with thefthe

300k mortgage
100k deposit
30 year term

It's a huge mortgage but house prices are ridiculous where we are. Would actually work out cheaper than our rent currently.

Still a scary amount to be borrowing :/

That is a huge mortgage but it makes sense if its cheaper than renting.
 
Soldato
Joined
9 Nov 2008
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7,080
That is a huge mortgage but it makes sense if its cheaper than renting.

A £300k mortgage for Surrey seems quite small really. Depending on the area but £400k around here would get a fairly small 3 bed semi-detached with driveway and very small garden. Source: I recently sold a fairly small 3 bed semi-detached with driveway and very small garden for close to £400k.

A nicely sized 4 bed detached for example could be anywhere between £500k and £800k depending on location and footprint.

I think I recently looked within 3 miles of my postcode for a house (... any house) for under £300k and there wasn't a single one - not even a small 1 bed terrace or anything.
 
Soldato
Joined
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Posts
3,610
A £300k mortgage for Surrey seems quite small really. Depending on the area but £400k around here would get a fairly small 3 bed semi-detached with driveway and very small garden. Source: I recently sold a fairly small 3 bed semi-detached with driveway and very small garden for close to £400k.

A nicely sized 4 bed detached for example could be anywhere between £500k and £800k depending on location and footprint.

I think I recently looked within 3 miles of my postcode for a house (... any house) for under £300k and there wasn't a single one - not even a small 1 bed terrace or anything.

Yes unfortunately South is far too expensive. Im looking for a bedroom semi detached with garage & driveway but these tend to be around the £400k mark.
 
Soldato
Joined
18 Oct 2002
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3,506
Location
UK
I would like to hear what % of net monthly salary people are paying on their mortgage including rates. That would be interesting.

23% right now. I’ve been as high as 35% (typically when first buying/upsizing until salary increases). 25% IME is the level at which I can live the lifestyle I want I’ve found over the years. Higher than that and I have had to make some compromises (not have a holiday, not change the car For a year or two etc.) but it’s all relative and dependent on personal preferences.

I’ve never regretted stretching myself with every move. I’m in it for the long term and all things being well I’ll have things paid off at 60, equity in something 4x the average house price and not had to compromise my lifestyle for that many years on that journey. I’ll have enjoyed a lovely “forever” home for half my adult life up to that point and then beyond until inevitably down sizing in my old age.
 
Soldato
Joined
6 Dec 2005
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Location
Cambridge, UK.
Mine seems quite high at 50% but does includes all bills and food, fuel etc and our recent over payment. We fully own both our cars (old though, 09 and 12 plate) so don't have any car payments and have never had car payments.

I still need to spend money on the house to get it how we want it but I don't mind doing it bit by bit as it means we get some use out of what was already here. i.e I do not like the carpets so they need to go but they still feel new (I just dislike the colours).
 
Soldato
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3,610
Mine is currently 24% but that include mortgage and house bills. If i doubled my mortgage i would be looking at 35% but its not too bad on one salary i guess.
 
Soldato
Joined
18 Oct 2002
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3,506
Location
UK
Mine seems quite high at 50% but does includes all bills and food, fuel etc and our recent over payment.

Ah..... if I want to include food, council tax, insurances, utilities, internet etc. to "live" in said home then I'm up at 50%
 
Soldato
Joined
18 Oct 2002
Posts
6,669
Hehe, if I include EVERYTHING (excluding savings), I'm up at 79% :D (We currently only have one modest salary and I'm paying for everything - e.g. whatever we want from Sainsbury's and M&S, plus Naked Wine, plus running a 3.5L sports car, so life is pretty good!).

We could probably get that down to 56% if we really scrimped, but it would be pretty miserable.

Hopefully the Mrs will get a job soon!
 
Soldato
Joined
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Posts
3,610
Hehe, if I include EVERYTHING (excluding savings), I'm up at 79% :D (We currently only have one modest salary and I'm paying for everything - e.g. whatever we want from Sainsbury's and M&S, plus Naked Wine, plus running a 3.5L sports car, so life is pretty good!).

We could probably get that down to 56% if we really scrimped, but it would be pretty miserable.

Hopefully the Mrs will get a job soon!

Im in the same boat, only on one salary. If i double my mortgage i would probably only be able to save around £500 a month.
 
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