£50k just isn't enough anymore...

[theboyfold]

Ohhh, my first Daily Wail thread link

http://www.dailymail.co.uk/femail/article-2013278/...

The family in Surrey are having to cancel the gym membership and 'think twice' about turning on the heating. They also complain about fuel prices, but what's that I spy? An R36 Passat...

[theboyfold]

Adrian W said:

I think that you've avoided the point!

You mean the article has a point beyond having a mortgage on a £600k house is more expensive than living up north in a £200k house?!

[theboyfold]

Du1point8 said:

So let me get this correct?

Is this a joint income after tax or before it?

Or are they both on roughly £33500 to get a take home of £25k each?

£33500 is not exactly making a comfortable income is it?

That was my thought as well. If it's 50k before tax, then how on earth are then in a house worth 600k with, as they put it 'a large mortgage'?

It makes about as much sense as the article I read in Autocar the other day whilst in the DRs waiting room. A lady who wanted to buy a £65k X5 and would put down £5k deposit and borrow the rest on her mortgage!

[theboyfold]

ClintonB said:

Serious whiff of bullst about the whole article IMO.
If nothing else, 50k simply has to be take home rather than gross, otherwise I for one am doing something very wrong. 600k house, multiple annual holidays and a thirsty 30k car, all off 3k a month.

Chinny reckon!

Just been doing the sums. The income for an Occupational Therapist is likely to be around £25k (my wife is one), so if it's £50k before tax that means they have £3k per month as you say.
Give them some benefit of the doubt and say they have a mortgage of £250k which with a duration of 20 years means they will be paying about £1500 per month on the repayment.

Like you say, something doesn't quite add up...

[theboyfold]

superkartracer said:

Esseesse said:

Always found it strange that people on low/modest incomes

50k low/modest??

That's the thing. Is it £50k before or after tax? The other man, the northern who is living the life of Riley is an MD of a firm, so I'd be suprised if he is on 'just' £25k before tax

[theboyfold]

superkartracer said:

After reading the crap story it's all complete cobblers sorry.

You expected something different from the Wail?

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AJS- said:

It is decent. But that's all it is. Unfortunately that house being where it is means that it's way beyond the reach of people on a "decent" income. It's 12 times their combined annual income, when the guideline for mortgages is 3-4.

Even at 250K it's a big chunk for someone on 50K a year. If they were indeed on that 10 years ago. Either house prices have risen out of all proportion to incomes, or they are way overstretched on that inparticular.

At £250k over just 20 years it would be around £1600 a month which would be in the same sort of region of 40% of their income. The only bit of the equation we don't know if that's net or gross. Either way it doesn't make a huge difference...

[theboyfold]

frosted said:

That is not an r36 , probably a 2l tdi with the sporty looking package , r line or whatever is called

That says R36 doesn't it? I could be wrong, but I'm wearing my glasses so I'm a little confident!

[theboyfold]

AJS- said:

Income must be after tax. With some farmers maths, 45K + 30K would give them 75K which is about 50 after tax.

For the other guy, he is probably on 60K and his wife on 15K part time which would give them the same income, but the man earning the significant chunk of it, having relatively more power and hence making more sensible decisions meaning the family lives within their means rather than spending it all on showing off and then complaining to the Daily Mail.

[theboyfold]

AJS- said:

Maybe he's a PHer?

No, he would have paid for his cars in cash and wouldn't have a mortgage or a wife if he was!

[theboyfold]

Assumption is the mother of all fk ups, so I'm going to barge right in with some crude figures

Based on them earning £50k before tax:
£50k gross = £3k per month
Mortgage at 40% = £1200 This works for £180k over 15 years

Based on them having £50k (Which is £75k net) take home per year
£4175 per month
Mortgage at 40% = £1670 (Works for £235k over 15 years)

There are more holes in my sums than in Swiss cheese, but you can then start to work backwards from here...

They must have remorgagted at the time of the 'crisis' and ended up being locked into a very high rate of interest because at the moment if you were in a fixed rate deal and have come out of it over the last 18 months mortgage repayments should be a lot lower than they were, which can almost offset a lot of the other increases.

[theboyfold]

CzechItOut said:

fido said:

e neither. Most of my stuff is still from George.

Duffers of St?

That's a load of pretentious cock as well.

I think he means Asda

[theboyfold]

Deva Link said:

The lower figure is the net one. Gross is before deductions.

I always get that wrong! Plus in my defence I was on the phone at the time of posting. Proving that I can't and shouldn't multitask!!

[theboyfold]

okgo said:

The way to remember it is:

Net is what you have left from a trawl, think of it like fish being caught in the net.

That's more like the way my brain works! I'll remember that next time, thanks

[theboyfold]

Jasandjules said:

£600k house does not mean 600k mortgage, for starters they could have equity in it and for seconds they may (and likely have) used profit from other houses they previously owned to build up to that value of house.

Quite, see my sums on the previous page about what 40% of the income might equate to...

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okgo said:

Reading has a fantastic link.

Basingstoke is another one to consider, you'd get a lovley house for your budget in the Candovers and only have a short drive to the station each day or whatever.

Reading is very good, especially if you are coming from south Wales

[theboyfold]

anonymous said:

[redacted]

But 9 times out of 10 that number that's 'left over' is always relative isn't it? It's so often the case that the lifestyle has to match the house.

The thing that amazes me with the mortgage payments is I thought they should have come down. There must be a lot of people who are on base rate at the moment so the minimum payment should be quite low...

[theboyfold]

oyster said:

Are we talking 40% of gross or net income? Single or joint? Fixed rate or variable?

40% of single net income on a fixed rate mortgage isn't so bad at all.

40% of gross joint income on a variable rate is madness.

That's the issue with the article, we don't know. Hence the last 14 or so pages of the same questions!