What proportion of your household income was your first mortgage?

Soldato
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I'm just curious really. General consensus seems to be that unless you're very highly paid, over 50% is the thick red line you definitely don't want to cross. But you always hear about people really stretching themselves as a FTB and coming out good after a few years. Obviously over time, pay should go up and mortgages down.

So what proportion of your joint net household income was your first mortgage? Not prying for anyone's pay packet, percentages only! (Unless you want to overshare :p)
 
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Soldato
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First place was 42% of my net income (I bought the house on my own). A few difficult years to say the least until the GF (now wife) moved in.

Second house is 23% of both our net income.
 
Soldato
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Edit OP to say compare monthly mortgage payment with monthly gross pay (or net), otherwise it's confusing.

As a % of gross, ours was about 17% when we first bought.

Mental to think that when we started renting in London about 7 years ago, rent one our 1 bed flat then was more than our mortgage on 2 bed semi in Surrey now. I think our ratio for that was more like 32%.
 
Soldato
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I'm just curious really. General consensus seems to be that unless you're very highly paid, over 50% is the thick red line you definitely don't want to cross. But you always hear about people really stretching themselves as a FTB and coming out good after a few years. Obviously over time, pay should go up and mortgages down.

So what proportion of your joint household income was your first mortgage? Not prying for anyone's pay packet, percentages only! (Unless you want to overshare :p)

So as an example, if your household income was 2k a month, and mortgage payment was 1k then 50% would be proportion of pay? Are you after non-overpayment, or overpayment?, and of course gross or net?
 
Soldato
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Gross we're 15.7% for non-overpayment, and with overpayment we're at 24.6%.
Net we're at 21.9% for non-overpayment, and with overpayment we're at 34.4%.
 
Soldato
OP
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Gross or net?
Edit OP to say compare monthly mortgage payment with monthly gross pay (or net), otherwise it's confusing.
and of course gross or net?
Net, obviously! What relevance on 'affordability' does gross pay have? It's meaningless if you're leaving all the confusing variables like pension, tax, student loan (lol), whatever on the table! :)
First place was 42% of my net income (I bought the house on my own). A few difficult years to say the least until the GF (now wife) moved in.
I'm amazed that most people were easily under 30%. What about all the stories of FTBs stretching themselves? :confused: To us, right now up to 40-45% seems doable but possibly unwise. We pay 22% of our net take-home on rent and that's very comfortable.
 
Soldato
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I'm amazed that most people were easily under 30%.

In my case I was earning decent money, had built up a substantial deposit, and did not stretch. I could have bought a far larger, more expensive, house but I was single and didn't need much of a house and it was close to where I worked.
 
Soldato
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Net, obviously! What relevance on 'affordability' does gross pay have? It's meaningless if you're leaving all the confusing variables like pension, tax, student loan (lol), whatever on the table! :)
I'm amazed that most people were easily under 30%. What about all the stories of FTBs stretching themselves? :confused: To us, right now up to 40-45% seems doable but possibly unwise. We pay 22% of our net take-home on rent and that's very comfortable.

Well the fact they base any mortgage calculations on gross pay.

But alas you're actually after how much money people have remaining after mortgage commitments.

We were FTB'ers nearly 18 months ago, we took a mortgage of 4.57x our gross income, and at the time net monthly would have been about 30%, we took a term of 35 years - knowing that we were planning to overpay anyway, so duration is kind of meaningless, but gave us flexibility between minimum amount and overpayment. I'm sure if we went for a 30 year term that net monthly would probably be closer to 37%, and a 25 year term, probably at least 45%.

Bottom line, you can stretch yourself by any means, but you want to live life at least a little comfortable.
 
Soldato
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21% of Gross, 31% of Net currently. First home was pretty similar at the time before I got a pay rise. Going over all our finances this seems pretty reasonable. If I was renting it would likley be nearer 40% net for a lot less property

- GP
 
Soldato
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We've been in our first house for 2 years.

20% of net for each of us and we're on average salaries, but that includes all the extra costs (rates, insurance, maintenance).

Actual mortgage is 16% of net total household income (two average salaries in Northern Ireland).

My personal rule is mortgage itself should be no more than 20% of take-home, but it's obviously very hard to do that on your own and in places like London (I dread to think...)

Total mortgage is 2.5x our joint income and 25 year term, but we put down 25% deposit.
 
Associate
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Around 30% of net pay for first house with just me. Upsizied with the new Mrs and it's now around around 20% of combined net pay.
 
Soldato
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Well the fact they base any mortgage calculations on gross pay.
But then they would go and ask about all your other outgoings, which obviously is too complex for here. Anyhoo we digress :)

but it's obviously very hard to do that on your own and in places like London (I dread to think...)
Well, the thing with London is that renting is expensive anyway. So it's probably no shocker to see the proportions of net pay that people pay on a mortgage, because the only alternative is to rent which is probably more expensive anyway. Personally, we're lucky because we rent direct from our landlords, they've only put the rent up once in 10+ years (when they refurbished and extended the place) and it's nicely below market rate for the area. But it feels odd to know that the bank would give us a mortgage for such a huge amount more than that outgoing every month... But then there are other things to consider. Like I guess we wouldn't need to save quite as hard if we were paying off a mortgage...
 
Soldato
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Up north! So 10% net pay first house, 5% now (roughly)... if I lived in Surrey those % would no doubt make me proper rich.
 
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