Percentage of take home salary on mortgage?

Percentage of take home salary on mortgage?

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Original Poster:

95 posts

80 months

Tuesday 23rd April 2019
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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.


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Original Poster:

95 posts

80 months

Tuesday 23rd April 2019
quotequote all
That is true, but I appreciate that people often don’t like talking numbers when it comes to salary etc. However, if people are comfortable to do so, feel free!

toon10

6,140 posts

156 months

Tuesday 23rd April 2019
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Currently 24.8% of my take home goes on the mortgage. That includes a small over-payment. More than comfortable with that.

JuanGandini

1,466 posts

138 months

Tuesday 23rd April 2019
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c. 17% of my net salary but we've overpaid for the past few years which has helped. We'll need to move in the next year or two and that will no doubt result in mortgage expenditure being 30-40%.

kiethton

13,883 posts

179 months

Tuesday 23rd April 2019
quotequote all
18% ex. Bonuses but goes up to ~20% allowing for the service charge.

Currently paying down other debt ASAP and saving for a wedding but planning to move in a few years - stretching ourselves initially with the hope it’ll get better from there...

romeogolf

2,056 posts

118 months

Tuesday 23rd April 2019
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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%.

Chris Type R

8,018 posts

248 months

Tuesday 23rd April 2019
quotequote all
About 25% I think (self-employed so income fluctuates). Overpaying the same amount as the repayment portion of the mortgage payment. Probably not the most financially savvy thing to do (overpaying), but I want to be mortgage free.

768

13,601 posts

95 months

Tuesday 23rd April 2019
quotequote all
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.

Edited by 768 on Tuesday 23 April 14:31

mattfuey

442 posts

137 months

Tuesday 23rd April 2019
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As of next Monday when we move ours will be 26% of combined income.

Current mortgage is 15% of combined income but was c.28% when we took the mortgage..

JamesD74

231 posts

174 months

Tuesday 23rd April 2019
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Around 20% although currently overpaying so closer to 30%.

Cyder

7,045 posts

219 months

Tuesday 23rd April 2019
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About 30% of mine, or 18% or our combined but it's actually the kids nursery fees that are financially crippling.

Edited by Cyder on Tuesday 23 April 19:07

HorneyMX5

5,308 posts

149 months

Tuesday 23rd April 2019
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About 10% of our combined take home currently. Looking to move in the next couple of years so that will increase.

MrJuice

3,300 posts

155 months

Tuesday 23rd April 2019
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55%

I dip into savings to the tune of 50-75% of net salary each month

theguvernor15

943 posts

102 months

Tuesday 23rd April 2019
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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.

Countdown

39,690 posts

195 months

Tuesday 23rd April 2019
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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.

Foliage

3,861 posts

121 months

Tuesday 23rd April 2019
quotequote all
about a 3rd

Pit Pony

8,268 posts

120 months

Tuesday 23rd April 2019
quotequote all
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%.



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.

Chris Type R

8,018 posts

248 months

Tuesday 23rd April 2019
quotequote all
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 etc

First world problems, I know.

anonymous-user

53 months

Tuesday 23rd April 2019
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15% for me, £444, first house.

CaptainSlow

13,179 posts

211 months

Wednesday 24th April 2019
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0% for me.

Now doing very large pension contributions..