Percentage of take home salary on mortgage?
Discussion
We're thinking of increasing our mortgage to fund a larger house in a nicer area.
We are pretty comfortable with our current mortgage as it only represents about 13% of our combined take-home salary. We don't have any other major debts and we generally don't need to worry about finances too much.
For our next move we don't want to mortgage ourselves up to the eyeballs, but we want to stretch ourselves a little because we may stay in this home for a long while.
I'm wondering how much Pistonheaders spend on their mortgage vs. take-home salary? How comfortable do you feel with this balance? Has anyone stretched themselves too far and regretted it, or perhaps wish you'd stretched yourselves a little further?
I appreciate there's lot's of variables, differing circumstances, etc. but it would be interesting to know what people commit to.
We are pretty comfortable with our current mortgage as it only represents about 13% of our combined take-home salary. We don't have any other major debts and we generally don't need to worry about finances too much.
For our next move we don't want to mortgage ourselves up to the eyeballs, but we want to stretch ourselves a little because we may stay in this home for a long while.
I'm wondering how much Pistonheaders spend on their mortgage vs. take-home salary? How comfortable do you feel with this balance? Has anyone stretched themselves too far and regretted it, or perhaps wish you'd stretched yourselves a little further?
I appreciate there's lot's of variables, differing circumstances, etc. but it would be interesting to know what people commit to.
For the last two years, it's reduced from about 30% to 27% of our joint take-home pay (we had a few pay-rises since we took the loan). We made a further over-payment each month which made it 33% initially, down to 30%.
We're in the process of remortgaging and the new sum will be just under 24%.
We're in the process of remortgaging and the new sum will be just under 24%.
I think I'm at about 75-80% of my take home, it'll be lower on my wife's take home, she pays in about 10% of what I do. As a ballpark half of mine being overpayment.
Hoping to have it paid off around this time next year at the end of the fixed rate.
Hoping to have it paid off around this time next year at the end of the fixed rate.
Edited by 768 on Tuesday 23 April 14:31
Looking back I think every one of my mortgages was a stretch when I first took it out. However (subject to interest rates not going bananas) your mortgage cash payment tends to remain constant but goes down in real terms due to inflation and also becomes more manageable if you get pay rises above inflation (ie promotion or bonuses). Then add in the fact that (usually) the value of your house increases as well so I think it makes sense to stretch yourself.
Having said all that i would always have at least 6 months salary set aside just in case I lost my job. Having that buffer allows you to take a bigger risk.
Having said all that i would always have at least 6 months salary set aside just in case I lost my job. Having that buffer allows you to take a bigger risk.
kapiteinlangzaam said:
10 years ago I went up to 50% net take home.
That was painful, but OK. Just meant less nice holidays etc.
We talk in percentages, but the actual $$$ figues matter a lot too.
Currently at around 20% net take home. I find that absolutely fine.
In 1992, I went to 80% of take home on an interest only mortgage. The endowment was another 10%. That was painful, but OK. Just meant less nice holidays etc.
We talk in percentages, but the actual $$$ figues matter a lot too.
Currently at around 20% net take home. I find that absolutely fine.
I survived. Because my wife had a job.
On joint income it was a total of 50%
Painful is one word you could use. Fecking Tory mismanagement of economy again.
theguvernor15 said:
Maybe around 20% on the mortgage, however, it's all the other bills that come with it that make it add up, so a bigger house is (potentially), going to up your bills.
Good point, when we climbed the ladder in 2015 we had the stamp duty, EA fees, moving fees etc which are one-offs. Then there was the £1k pa extra in council tax, extra £500-750pa in heating/electric. The cleaner for an extra hour per week, increased charge for the window cleaner. Additional cost of a gardener every now and then, etc There's also the inevitable redecorating/improvements etcFirst world problems, I know.
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