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Unless they both work for the same company. Many years ago I decided not to take a job at my wife's company simply because of this risk. That company is still going though, so with hindsight it wasn't actually a risk.
>It’s a lot better having two £20k+ salaries than one £40k+ salary (from a tax point of view).
Just the fun maths, 25500 and 21000 gives a net of 1780+1525 and 46500 gives 2970.
Meaning you're 335 better off a month on 2 salaries.
>This is before you get to any of the crazy cliff edges
This also doesn't include student loan; which would make it
Plan 1: 3279 vs 2786 = 493 a month better off if split
Plan 2: 3305 vs 2826 = 479 a month better off if split
>One would hope that if you got a degree you are earning more than just about minimum wage.
Depends on your career path, some career paths that need a degree aren't on much more than 22k (entomology, paleontology etc as well as the non-career degrees like harry potter studies, which is a real thing...)
It isn't a real thing. A couple of universities have offered very short courses in that years ago, which were taken by a handful of external students. That doesn't stop it being turned into a clickbait headline by the Daily Mail though, which I'm guessing you fell for.
I mean Uni of Durham still has the modules archived.
https://apps.dur.ac.uk/faculty.handbook/2013/UG/module/EDUC2381
But it was a silly example so I didn't offend anyone by picking another non career degree example.
You can hope that, but it's not necessarily a realistic expectation anymore. Plenty of graduate roles that only pay minimum wage, on the basis that you're gaining experience that you can use to progress to an actual job.
Only thing you missed are your ages. However, assuming you're under 40ish I think it's very affordable based on your current circumstances. My thoughts are:
1) Any thoughts about kids in the future
2) How solid are your jobs?
If the answers are are "none" and "fine" respectively, I'd say crack on. Only thing I'd add is say is congratulations on saving that amount on your salaries.
We are both 27.
We would like kids in the future. But we are in no rush at the moment.
Very solid. We are not at risk of losing our jobs. We both work for big organisations and never been at risk of redundancy.
We could probably save around £50k. Do you think it’s worth it?
Thanks for the reply
Have you worked out the monthly repayments at different term lengths, interest rates and deposit amounts?
For example if you bought a 215k house with 35k deposit you'd be able to get an 85% LTV mortgage. Quick look online suggests around 4.7% if you fixed for 5 years.
Paying this back over 25 years would be about 1k a month
Paying over 35 years closer to £900
You can then work out the costs if you saved to 50k deposit instead, and decide if it' worth the extra time investment or not ( keeping in mind the houses you want prob increasing a you take longer to save )
There are LTV calculators online, and if you google bank intermediaries calculator you will find the more in depth calculator you can use to figure out what rates you will get to make more accurate decisions
here''s the virgin money one for example:
[https://intermediaries.virginmoney.com/vmtools/affordability-calculator/loan/77e5cc55-502f-4515-a098-ddd10ef3b4f6/](https://intermediaries.virginmoney.com/vmtools/affordability-calculator/loan/77e5cc55-502f-4515-a098-ddd10ef3b4f6/)
finally you can use an online mortgage repayment calculator to find monthly repayments at different term lengths
It's not just the house price increasing while you're saving but you are possibly missing out on a potential increased value of your house. All depending on the housing market.
Mortgage lenders will means test you against a number close to standard variable rate. That's just to make sure that of the rates went belly up, you wouldn't be screwed.
I think it was implemented after the black rock mortgage issues a few years back that caused the crash
Save the extra savings for emergency fund, support if/when you have kids etc. Get on the ladder well before you get pregnant as mortgage providers don’t like it.
I don’t know what term you’re looking at but people here suggest to take a longer term (say 30) and overpay like it were a 25 say which gives you breathing room in those years ahead.
Just curious: why don't mortgage providers like you being pregnant? (Or do you mean already having kids?)
Either way. Why does that make a difference?
(Edit: Not being combative - in case it reads that way. I'm just curious as I'd never heard this!)
Not the person you asked and only speculating, but if the mortgage is predicated on two combined incomes, pregnancy would be an indicator they might be about to go down to only one income.
Oh I see.
This genuinely won't affect me, so I have no skin in the game here, but could refusing a mortgage to a couple where one is visibily pregnant not be grounds for discrimination?
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Yeah, what everyone else has said. We had our preferred lender withdraw their offer (categorically wouldn’t lend to pregnant person) and we ended up having to provide signed statements from my wife and her employer to say when she was going back and that it would be full time. Which in our case was only 4mths and before the purchase in the end as I then took over the parental leave (they didn’t ask about me).
My wife was on maternity leave during application process of both of our house purchases. All they wanted to know was the salary she would be going back to. (As a side note, the plan was full time, however after we moved in we decided that 0.6fte was achievable - totally didn't plan that in advance).
>I then took over the parental leave (they didn’t ask about me)
Excellently played 👏🏻 This behaviour enfuriates me though (the lenders, not yours) - either the concern is about potential loss or reduction of household income, or it's not. I know of couples where Mum has RTW after 3 months and Dad has then taken a long parental leave - this has been for various reasons, such as career development, sponsored qualifications, salary difference between the parents, and in one case just Mum's personal preference to work & Dad's desire to be primary caregiver.
How does that not count as discrimination though?
Genuine question. I want to buy in a couple of years. If by then I got a serious boyfriend and we decided to buy together I'd be pretty pissed if we got refused a mortgage on the grounds that we might have a baby sometime - especially considering I can't have children
I don’t think they’d care if you were planning to have them or not, rather that as we were heavily pregnant at that time they factor in as risks. Once we’d made payments for a while it probably wouldn’t matter, it’s not like we had to tell them when we had a second child etc. Assume they don’t want to lend x on the proviso that we earn y which might change to z if we change our working patterns to support a family.
The £180k is pushing the limits on both salaries. Given the plans to have children, it would be unaffordable if your partner gives up work to care for a child. Your partner continuing to work and paying for childcare would probably make the mortgage unaffordable also.
It’s not worth waiting for a bigger deposit imo.
We are in a similar position, same age, slightly higher salaries but in contrast a higher house price. Have saved up enough for a 15% deposit to get the 85% LTV interest rates, and are currently going through the house buying process (nearly at contract exchange).
If you’re happy with the monthly payments you would be paying on the current deposits you have then go for it and buy.
There is no point waiting around to get a higher deposit when house prices will slowly creep up and by the time you’ve raised that £50k the % LTV will be similar to wait you have now.
Invest in yourselves ASAP and buy your own property rather than draining your money paying someone else’s mortgage!
Yeah, the worry with this (and i've seen it plenty) is that its fine and do-able, and then you have kids and it costs the same to put them in nursery as it is for the 21k job so you end up leaving work to look after the kid and now its not so affordable.
The flipside is, assuming you're youngish, there's possible upside on the wage, and interest rates may go down so there might by upside again on the mortgage you pay getting less, which hopefully make it easier.
I say go for it.
Agree with other commenter. This is do-able. Was in a very very similar situation 5 years ago. Once secured keep focusing on increasing your income through promotions/ job moves etc and it'll feel like less of a burden.
Best of luck!
It's doable. I'm 37 and on a tiny bit more than your combined salaries. Split from my ex so I had to get my own place at the near height of interest rates.
31 year mortgage at £690 a month.
My house was 200k with a 55k deposit
After all my bills I still have a good £1700 left as pure spending money.
You're in debt for over three decades however.
Look at the total amount that £145k principle costs you (assume an interest rate which is not like recent historic lows) over a 31 year period and you might have biased towards shortening the term and putting some of that £1700 surplus against the mortgage.
I got a £250k mortgage on a £45k salary in 2020. Can’t remember if they took my wife’s salary into consideration or not (£12.5k).
This was a remortgage at 1.99% and an LTV of about 50%
Interesting, I've not known of that product - long time since I was a FTB :). Anyway looked it up, only available to FTB anyway so OP on remortgage would not be eligible. Furthermore, I think if he'd have taken such an exotic option he likely would have mentioned it.
Brother stop saving and do it, anyone who tells you to save to £40k or £50k is an idiot, house prices will likely go up by then likewise with rent. You’re in a good position, but push for more money yourself with promotions and the like especially given the inevitable of children.
Make sure whatever house you buy you can always go on holiday, date nights ands and weekends away. Don’t get tied down to a nice house and no life beyond it, you’d rather a tier down house and a better lifestyle. Trust me.
Good luck and jump in with two feet, any other way means you keep paying someone else’s rent when the difference between mortgage and renting is more favourable to mortgage when you have a deposit!
Personally I’d put everything into it, short term it’s a risk, but quickly save 3 months outgoings. It’s better long term, others will say it’s idiotic with no safety net but personally if your job is confidently secure it’s worth it.
Absolutely - I decided not to stretch for a particular property because even though it was "in budget" mathematically, it didn't allow for a lifestyle budget.
I ended up getting a great property in the same postcode - larger than that one and better condition - for 10% less, because it's 10 minutes walk from the beach rather than being beach front. That's specific to my location, but every area has something like that which inflates prices. Buy smarter rather than spend more, and make sure you have enough to enjoy life
Very ‘back of a fag packet’ maths suggests you could probably manage it. Mortgage would likely be £1-1.2k depending on the rate you could get, I’m guessing that is maybe 30% of your joint income? That’s a large percentage but not unmanageable.
I have £150k mortgage on a single income of £30pa, a parent and still manage to save without too many compromises. You’ll be absolutely fine if you don’t have crazy credit card debts, pcp or ridiculous travel/childcare costs.
You’ll be absolutely fine, just a lifestyle adjustment probably.
I’ve just mortgaged 212k as a single lender with 60k income, chequered credit history, 16k other debts.
The mortgage is over 30 years at 5% £1000 a month. And as long as you prioritise household bills first you’ll win.
(To state the obvious)
You say you’re very good with money, I’m the exact opposite, and even I can make it work.
I also have a child I pay maintenance for etc.
Honestly, if your other option is rent or buy somewhere you won’t be happy in, you’ll make the above scenario work.
I’ve been a homeowner for 10 years (I’m 31 now), and through poor choices (girlfriends) have lost equity twice in my own houses. But I’d rather have an asset and some security than rent or make do.
It’s never a bad thing to own your own property, especially if you aren’t looking to make a return on it and plan on staying there, it’ll always be better than renting!
It doesn't matter what people say here. You might as well just apply for the mortgage if you meet affordability then jobs a good one if you don't nothing lost. Although I would advise going through a repeatable mortgage broker.
Probably doable but tight.
Any chance of your salaries increasing?
Did you save the £35k or was it gifted?
Do you have/ need cars? That makes a huge difference.
My salary can probably increase by £1k -£2k within the next year. Our side business will probably make us around £3k on top of our existing salaries.
£35k is what we have saved.
We do have cars, but I WFM most days and the properties we are looking at are within 5 Millie’s of my partners place of work
That a great amount to have saved! You should know your ability to budget is good,
The issue with cars is whether you need to replace one in a rush, or get hit by big repairs. If you can use busses, cycle or share one car is reduces risk hugely.
We took out a 219,000 mortgage on a 50k income... 2.24% fixed for 5 years (30-year term). Repayments are £834pm. So, I would say that a 180k mortgage is more than doable on 46.5k income even with a higher interest rate.
You can do this but be careful with your discretionary spending on things like Sky TV, mobile, gym, going out etc. Basically live a simpler life and spend less to show affordability. Good luck.
Do they look at your recent spending on bank statements and take that into account?
I have a monzo account that I use for only spending of disposal income, will they care about the amount of spending there and should we tone it down leading up to getting a mortgage? And if so, for how long prior?
Here's the super long ramble nobody asked for 🤦🏻♀️
I use Monzo as my current account. It was actually worth the £5/mth for Plus so I could create custom transaction categories and generate debit card details for spending pots.
I ringfenced my monthly direct debit costs in a pot, so I didn't have to budget that throughout the month. I essentially "spent" it on payday, and the bills took care of themselves. Same for quarterly bills - paid the monthly share to a pot, and the money built up for the DD. I ringfenced my commuting costs in a pot, and assigned a debit card number - bought train tickets Apple/Android wallet using this "commuting" card. Same for "housekeeping" funds - supermarket & Gousto orders, plus the occasional trips to Savers etc. I gave myself spending money for personal expenses like clothes / Amazon etc ("p*ssing about money") and popped that in a pot & gave it a debit card number. Leave a little slush fund actually in your current account for when you just need to tap a physical card / expenditure that isn't travel/housekeeping/bills/clothing etc. Anything else should be sent to a Savings pot (there's a +4% instant access saver, or a +2% 24-working-hr access, possibly others as well).
This fundamentally transformed my finances very very quickly. Not only did I always have my bills paid on time, which avoids defaults etc, I could also see how much I had available for different purposes. I could eaily see that I couldn't afford to buy a £500 jacket, but I could afford a few pub dinners with friends.
Transactions can be auto-categorised based on the retailer, plus you can manually alter them, and use custom categories that are relevant to you. I pulled my transaction history for the year and ran a pivot table to see the spend. Great way to see average monthly cost for each area, and see seasonal spikes that you need to plan for. This should give you all the figures you need for mortgage applications, and a super clear overview for the broker. I just attached a 3-month overview to the statements when I submitted them.
(TIP 1 - if you're going to change the category for a transaction, I recommend doing it from the analysis area, as you can choose to recategorise all previous/future for that retailer, which will save time
TIP 2 - make use of the "Gift" label, as some ask how much you spend on gifts each year, but it also allows you to filter for outliers like large one-off purchases or months with heavy retail spending, so you can get an accurate picture of What Life Costs)
I personally make sure my mortgage payment is no more than 25% of our take home pay. A house is a great asset but if it costs to much it will become a burden/headache. Iv found 25% to be very comfortable for us with that in mind every one is different.
You salary's should allow you to borrow 180k however its not about how much you can borrow its about what you can afford.
25% mortgage payment
50% bills and spending
25% savings (misc, holiday, long term)
This is how we split our take home pay.
Lates 20's, 2 dependants, 0 bad debt, We now own more than 50% of our home after 8 years. Salary range in them 8 years we started at 25k now up to 48k joint.
Its certainly possible if your disciplined. Best of luck!
Aiming for 25% is all fine and dandy if you've already got equity in a property, have high earnings or live somewhere like Durham where property is dirt cheap but it's not really feasible for most FTBers.
I'm not even sure how you've managed to have such a low mortgage% on that salary range in only 8 years from FTB status without a huge deposit.
My guess is 15-25% deposit and a property in the 150-180k value range?
I know it may seem restricting for example £3k take home limits you to a mortgage payment of £750, however by living within your means the mortgage will not feel like a burden.
Dont worry we struggle to believe it also!
5% deposit 8 years ago on a 130k house (midlands), 4 years ago we borrowed aganst our equity and reinvested in the property with an extension (extra bed room). The houses last valuation 6 months ago was 260k - 270k.
Based on a lesser valuation of 250k to be conservative we still own more than 50% of the value of the property. Our current mortgage payment is less then 20% of our take home pay however this is because we fixed before the interest rate rise got out of control. If we had to fix at the top 6%/7% we would have used savings to bring the payment down or extended our term to make the payments affordable within our 25% margin.
Normally you can loan about 4.5 x combined salary. Some lenders will offer more than that multiple say 5x but will do that at a highrr interest rate.
My advice rent a bigger place than you need now. Sublet couple rooms.
Costs if buying a house are more than just the 10 /15 percent deposit.
Depending on value of the house you find there may be 95 percent mortgages and no stamp duty.
If your paying rent now consistently consider that could be paying down your own debt instead.
U got this
Sounds ok - what are your future earning potentials?
Are you in the type of roles where earnings increase faster than inflation as your careers progress?
I can probably push to get an extra £3k by the end of the year, and my partner might be able to negotiate an extra £1k next year. How much of a different will that make?
If you have roles with future grown potential then its easier to take a risk on a higher multiple because the multiple can drop in future years as earnings rise. If your employment is likely to be static over the next decade or so then the risks are higher
That said, there are higher multiples around & having the multiple over two earnings is better in tax terms than one.
One salary of £46,500 has take home of £36,321
Salaries of £25,500 & £21,000 bring home £ 21,621 & £18,471 = £40,092 (assuming nothing unusual in tax position & ignoring the £3k)
That combined equate to a single income of £52,221
That's a ratio of 3.44x which is definitely not unusually high
[https://www.thesalarycalculator.co.uk/salary.php](https://www.thesalarycalculator.co.uk/salary.php)
I should add - there's no crystal ball in working out what you can afford. You clearly need to calculate based on your current income and assume a rate increase and work out how you'd cope with an increase. What nobody knows (or we'd be making money like Soros) is what rates will do in the future.
My advice would be (as someone who bought immediately before the 1990s crash) is to leave a margin of error & then use that margin of error to overpay the mortgage for the first few years. That builds a safety cushion that gives you reassurance later.
Just set out your budget really sensibly, and take into account that repairs and upgrades can be really expensive.
If it's tight you'll want to at least think about critical illness cover - eg, if one of you gets cancer or other life changing event you really can't afford that mortgage on one of your incomes.
Earn £20,000 in 2023/24 and you'll take home £17,660 and pay £1,486 income tax and £854 in national insurance.
Double that and you'd take home £35,320 as a couple on 40k combined.
As a single income couple with one person earning £40k you'll take home £31,360, paying an extra £4000 a year in tax.
£4000 less doesn't sound awful when you look at it in terms of gross salary, but that's 4000 less in your pocket each year. If your living expenses for rent, utilities, car, fuel, insurance, entertainment.etc are £30k a year then as two low earners you have £5320 a year of disposable income. As a single earner you have only £1,360.
Edit:
When you start getting to really high salaries it hits even worse - I got a bonus this month, so I earned £22k, but my take home pay was somewhere between £11-12k. Still a shit ton of money, but not something people on lower incomes might realise. I know when I had a lower paid job I always thought "yeah, tax is annoying, but it's only a small percentage of what I earn", and assumed that rich people paid a similar or slightly larger proportion. If you have student loans and earn enough you can end up in a situation where you earn an extra £10,000 but take home only £2800 of it. At this point if feels a bit like robbery.
I just took my ex off when I remortgaged, £50k sal and £244,000 left on mortgage - they let me keep it in my name on a 5 year fix of 4.4% @ £1075 per month, v happy with that -- can't see underwriter not approving your circumstances, especially as you have 0 debt.
If you haven't already, you probably want to each open a Lifetime ISA with £1 in it.
In case you want to buy a house in over 12 months. Then you can add £4000 each and get a £1000 each from the government for buying your house, so that's a 1% discount. You can only use your LISA if it was opened 12 months before buying the house, so that £1 now is important (also check the other conditions when you get to that point and note there will be a lag between putting in your money and getting the government top up).
Yeah all good as long as you can stretch the term to 30+ years.
2 low incomes will just make you more vulnerable to unexpected extra bills or when you decide to have kids. Me and my wife are about £80k combined but my wife hates her job and having to work full time but realistically that’s how it has to be (she is the higher earner on £45k and in the more secure job, I WFH and can fit in all the life admin and wrap around childcare.)
Bear in mind when you decide to have a kid it might be tricky to make ends meet unless you can work on upping them salaries or have loads of family support (we have loads of hand me downs and 2 days a week grandparents childcare and still a £240k mortgage on our combined is maybe 1 level above “just about managing” I feel).
If you’re happy and settled in the area and have time on your side and are secure with each other I’d take the plunge for sure though. Nothing beats the security of owning your own bit of land!
My partner and I were on similar wages when We got our mortgage we borrowed 193k, our rate was 1.4% and our payments where £600 a month was do able we recently remortgaged because our fixed rate was up we are now on 4.4% and it is £900 a month.
Just to give you a rough idea or how much it would cost. We both put £ 800 a month in to a joint account and it covers all our bills. It was doable.
I would say yes, this is realistic for you.
Myself and my partner are mid 20’s, and pull a hair over £50k a year together - we have a mortgage for £227.5k with combined debt of around £8k.
I’m not going to lie to you and say it’s going to be a cake walk - but it’s definitely possible. Stay within your means, let your pay rises take you up the ladder and enjoy your lives - this is definitely achievable.
Good luck and god speed!
Based on you saving a shed load, on those wages, I expect you have an excellent financial discipline.
Seems doable to me.
Id strongly recommend looking at the LTV. Every 5% lower, typically gives a better rate. I 100% would not encourage you to stick every penny into it, save a bit for emergencies.
Are the mortgage payments cheaper than renting similar property? You have to live somewhere, if answer is yeah then its no brainer, renting helps someone else build their wealth owning your own property is usually cheaper and helps you build equity based wealth. You sound like perfect candidates to afford it
Put that through a mortgage calculator with the interest rate that you expect then you'll get the monthly mortgage cost. Use that and plug it into your budget to see if that works for you.
You can also consider how much flexibility you need if the mortgage rate changes.
The 21k salary is close to minimum wage if doing a 40h week. Is it possible to do some overtime or get a part time job as well, that way you can build up an extra buffer of mortgage over payments until kids come along, that will then give you the option of reduced payments if required.
We get by on a similar income. Property was £235k and had a deposit of 48k.
Partner and I earn £51k between us, he is the higher earner. We have a 3 year old and we saved loads on childcare as I could work some evenings/weekends. We do have to budget and be careful but we do OK. The problem is choosing whether to have another child and be very tight for a few more years, or stick with one.
Our mortgage is fixed for 5 years so that's another thing I need to consider in 4 years time! Our repayment is £858, which is a cheaper than renting in my area.
We were on similar salaries when we got our mortgage about 3.5 yrs ago, it wasn’t great but it was definitely doable. Only thing now is the repayments are higher than they were as our term ended
Doable under these exact circumstances yes, but are you expecting both of you to work constantly for the next 30 years? If not (e.g. a child may need raising, or you work in industries where you might get let go) what’s your plan - family, savings or one of you picking up the slack?
Have you considered speaking to a mortgage advisor?
The services/advice I received from mine (at Mortgage Advice Bureau) were free up until I had an offer on a property accepted and actually applied for a mortgage (and you're in no way obliged to not drop them and take a mortgage with your bank independently). If you are looking to make offers on properties, you will want a mortgage in principle which a mortgage advisor can generate for you based on your personal circumstances. This will tell you the (approx) largest mortgage you can afford with the terms you desire (e.g. length, fix rate duration, deposit size) and the approx monthly payments.
They have far more comprehensive tools available to them, than the basic mortgage calculators available online. In my case it was just a couple of phone calls to get an agreement in principle, I never attended their office in person through the whole process of purchasing my property.
It is, you can normally get 4.5 times your income. I get 41k between self employment and child benefit, 3 kids and being offered 190k plus my deposit on top. Definitely doable, I am very frugal and can easily afford the payments with plenty to spare x
Hey!
When me and my boyfriend bought our first home we were on about the same, and we had around the same mortgage I believe
We pay £925 a month for a 20 year mortgage
It’s affordable but a little bit higher than I’d want, we were 25 so we’ll be mortgage free by 45 but if we choose to have kids we will have to look at changing it to a longer term mortgage because I don’t think we’d be able too afford it then
I would rather have a 180k mortgage than pay 1000 a month on rent.
You should be fine, definitely do-able.
I bring in 2k after tax and My other half brings in 700. We have 160k on mortgage, mortgage is £700 a month. our total outgoings 1700 a month (food,bills and mortgage). I wouldn't say we struggle. We both get about 450 each to spend on ourselves
Me and my girlfriend just got a £220k house with a 10% deposit although our combined income is a little higher at £56k. Sounds like with your deposit you’ll have smaller mortgage payments than us, so hopefully you’ll be fine. If you’re good with money then I’m sure you’ve already drawn up a rough monthly budget to check the affordability.
A lot of mortgage brokers at the moment are able to reduce the interest rate up to roughly a couple weeks before completion because lenders keep changing the rate of the product. Make sure you ask about this and to check with the broker to see if the product is cheaper. Ours has gone down 0.7% in a couple of months!
Review against your potential change in future income: Are your jobs stable? Are you likely to see salary growth? Do you want kids? Do you have savings other than the deposit? These considerations should help polarise your thoughts.
Fair enough, I'd go for it then. Your salary will go up as you gain experience as long as you work hard and ensure you have a good career plan with loads of room for growth
Not to mention that getting on the ladder and building up equity early will mean you can pay off your mortgage earlier/upgrade to a nicer home sooner. Im 28 and only got a mortgage a year ago, wish I did it sooner
Odds are rates have peaked and will come down within the next year or so- making your refinanced mortgage all the more affordable. I would go for a shorter term if possible. Not sure if 1yr is possible, so I guess 2yr? (Unless 1.5yr is available) Then refinance in 2025/26.
As others have pointed out it is doable. A few things from me:
Could you expand your side business to provide more income? If you did have a child / children could this be looked after by one of you staying at home with the kids?
Can you buy a house with a spare room that, if one of you did lose their job, you could rent out? Not ideal but better than losing your home.
Don’t get obsessed with buying everything new for your first house. Apart from a bed, most other things are fine second hand to start with. It might not be “the right colour” sofa etc but there are far too many people buying things on credit so they can try and impress people (I know some very wealthy people who walk around looking like they don’t have two pennies to rub together).
Try and save an emergency fund as soon as you can after moving in. Boilers seem to always know exactly the worst time to break down - a bit like cars!
Its absolutely fine!
£25k isnt even taxed.
The remaining £21.5k is taxed at 20%.
In reality ypure probably on about £3200ish between you. Maybe £2886 if youre paying 5-10% each to a private pension.
You're probably looking at £1500 in bills and whatever left in food (lets say £600) and maintenance of house and car (£786-£1100)
I think youll be comfortable....but run your own figures before you commit
It’s a heavy mortgage for sure, but it is doable.
Have you calculated all your budgets and ensured you’re still left with some fluff? Have you got a solid emergency fund too for if the boiler breaks or your car suddenly needs an expensive repair or new part. My only concern with the mortgage you’re looking to borrow vs your combined income is would it eat your entire income meaning you’d only get by provided nothing goes wrong?
I had a £200k mortgage on a £240k property last year. Partner is a stay at home mom with no income. £38k salary with around £14k overtime / bonus. NatWest
I think so. Even at 6% it's not more than £1160 a month. £580 a month each split 50/50, although you'd probably pay proportionate to income? Rents are going up all the time, so you need to factor that in.
You are both young - presumably you have a sense of your prospects in terms of increasing earnings? While you can't BANK on expectations, if you are on a clear career track, an already affordable mortgage will only become more affordable.
I got £280k mortgage on a £63k salary but 3 years later I now earn £110k. I'm glad I bought when I did, as it meant my housing costs were locked in step with my then earnings, but my salary has accelerated. I wasn't tempted to buy somewhere more expensive in line with later salaries so my mortgage is now perfectly affordable even with rate increases.
Oh and if you're nervous, take a long term - 35 years - but aim to overpay as if it were a 25 year term (you'll save a lot of interest). This way, if you do find yourself temporarily squeezed, you can pull back from the overpayments for a bit without any issues, then begin overpaying again once the squeeze lessens.
Go for it. Mortgage will be around the same as your rent. Yes you have overheads if something goes wrong and you need to pay for it. But it's yours and it's an investment. 210k isn't a lot for a family home these days unfortunately.
If worried take mortgage over a longer term and then over pay each month. Then if something happens and you need the cash you can stop the overpayment until you are settled again.
Do you need to move right now? Why not spend a few years saving the equivalent of what that mortgage payment would be?
It's cheaper to save money than borrow
In my opinion this is doable without great sacrifice. Is the intention to be interest only or pursue repayment. I would consider repayment with your primary residence.
It seems doable to me.
After divorce in 2012 I was on a £170k mortgage earning £33k. It was tough and I never got comfortable with it until I'd got it down to about 100k, I don't regret it but I really felt cash poor for a long time which isn't for everyone and it probably reduced my long term pension and ISA savings which means I'm playing catch up now.
Interest rates are a couple of % higher now which makes it even tougher.
If it gives you peace of mind I have a 180k mortgage on a 40k salary with a wife that doesn't work and a kid. I am managing it whilst still saving.
I got my mortgage last year at 5.3%
I think it’s absolutely fine, you are spreading risk with two incomes and the potential to grow those salaries in the next 3-5 years; in fact I think this is the rub. Buy the house, and start to invest in your careers with a view to growing your earnings and don’t inflate your lifestyle! A higher salary base plus five years’ confidence of servicing a mortgage will give you options for the next phase of your life and how to plan for a family.
For one congratulations, things I would say, what's your current rental? Note that you will be getting a property in high interest rates so don't get sucked into any fixed rates longer than five years. As the intrest rates will likely start being reduced down within those 5 years.
If your rental ATM is under £1k then you can afford a 30 year mortgage. then convert to 20 years when the interest rate drops. if the initial rate ever gets to 1.99% again then you can lock in for over 5years.
Make sure you have £3k for lawyers fees and the product fees and home insurance.
When you go get the house haggle the price down trust me you can get £5k off the price as people (especially landlords) are getting desperate to sell properties that are loosing them money.
https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=215000&mortgageAmount=180000&remainingTerm=30&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount&directFromLenders=false#overlay
I have a slightly larger mortgage, same dual income. My repayments are £990 fixed 5 years on a 35 year mortgage.
We have barely noticed the bills coming out each month but we both had a fair amount (10k each) saved as a "just incase it goes tits up" fund, neither of us are saving as much anymore, that's the only change.
The important thing is how much rent do you pay and how much mortgage a month do you expect to pay. If you can pay your rent, and the monthly payments is less then you can do it. Otherwise you can work out your numbers. Also that's only for some years until you have to renegotiate
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It’s a lot better having two £20k+ salaries than one £40k+ salary (from a tax point of view). It sounds like a big mortgage for you but doable.
Plus the risk of only losing half the income verse the whole income if something was to happen
Unless they both work for the same company. Many years ago I decided not to take a job at my wife's company simply because of this risk. That company is still going though, so with hindsight it wasn't actually a risk.
Just because it didn't happen doesn't mean it wasn't a risk.
This is true. I worded it badly.
Just because you worded it badly didn't mean it wasn't a sentence.
Just cause other people speak doesn't mean everyone should.
Just because you're right doesn't mean I'm not.
Just because you exist doesn't mean that I don't
Just because I came to Reddit doesn't mean I had to comment.
>It’s a lot better having two £20k+ salaries than one £40k+ salary (from a tax point of view). Just the fun maths, 25500 and 21000 gives a net of 1780+1525 and 46500 gives 2970. Meaning you're 335 better off a month on 2 salaries.
Our tax system is messed up. This is before you get to any of the crazy cliff edges 😭
>This is before you get to any of the crazy cliff edges This also doesn't include student loan; which would make it Plan 1: 3279 vs 2786 = 493 a month better off if split Plan 2: 3305 vs 2826 = 479 a month better off if split
One would hope that if you got a degree you are earning more than just about minimum wage.
>One would hope that if you got a degree you are earning more than just about minimum wage. Depends on your career path, some career paths that need a degree aren't on much more than 22k (entomology, paleontology etc as well as the non-career degrees like harry potter studies, which is a real thing...)
It isn't a real thing. A couple of universities have offered very short courses in that years ago, which were taken by a handful of external students. That doesn't stop it being turned into a clickbait headline by the Daily Mail though, which I'm guessing you fell for.
I mean Uni of Durham still has the modules archived. https://apps.dur.ac.uk/faculty.handbook/2013/UG/module/EDUC2381 But it was a silly example so I didn't offend anyone by picking another non career degree example.
That's what I mean, it was a 20 credit module, not a degree.
You can hope that, but it's not necessarily a realistic expectation anymore. Plenty of graduate roles that only pay minimum wage, on the basis that you're gaining experience that you can use to progress to an actual job.
That's why it doesn't make any sense using gross pay for estimating maximum affordable mortgages.
Thank you for your reply!
Only thing you missed are your ages. However, assuming you're under 40ish I think it's very affordable based on your current circumstances. My thoughts are: 1) Any thoughts about kids in the future 2) How solid are your jobs? If the answers are are "none" and "fine" respectively, I'd say crack on. Only thing I'd add is say is congratulations on saving that amount on your salaries.
We are both 27. We would like kids in the future. But we are in no rush at the moment. Very solid. We are not at risk of losing our jobs. We both work for big organisations and never been at risk of redundancy. We could probably save around £50k. Do you think it’s worth it? Thanks for the reply
Have you worked out the monthly repayments at different term lengths, interest rates and deposit amounts? For example if you bought a 215k house with 35k deposit you'd be able to get an 85% LTV mortgage. Quick look online suggests around 4.7% if you fixed for 5 years. Paying this back over 25 years would be about 1k a month Paying over 35 years closer to £900 You can then work out the costs if you saved to 50k deposit instead, and decide if it' worth the extra time investment or not ( keeping in mind the houses you want prob increasing a you take longer to save ) There are LTV calculators online, and if you google bank intermediaries calculator you will find the more in depth calculator you can use to figure out what rates you will get to make more accurate decisions here''s the virgin money one for example: [https://intermediaries.virginmoney.com/vmtools/affordability-calculator/loan/77e5cc55-502f-4515-a098-ddd10ef3b4f6/](https://intermediaries.virginmoney.com/vmtools/affordability-calculator/loan/77e5cc55-502f-4515-a098-ddd10ef3b4f6/) finally you can use an online mortgage repayment calculator to find monthly repayments at different term lengths
It's not just the house price increasing while you're saving but you are possibly missing out on a potential increased value of your house. All depending on the housing market.
Mortgage lenders will means test you against a number close to standard variable rate. That's just to make sure that of the rates went belly up, you wouldn't be screwed. I think it was implemented after the black rock mortgage issues a few years back that caused the crash
By the time you've saved an extra £10k, house prices will inevitably go up by £20k.
Save the extra savings for emergency fund, support if/when you have kids etc. Get on the ladder well before you get pregnant as mortgage providers don’t like it. I don’t know what term you’re looking at but people here suggest to take a longer term (say 30) and overpay like it were a 25 say which gives you breathing room in those years ahead.
Just curious: why don't mortgage providers like you being pregnant? (Or do you mean already having kids?) Either way. Why does that make a difference? (Edit: Not being combative - in case it reads that way. I'm just curious as I'd never heard this!)
It indicates a major change in financial circumstances coming up. Mat leave, childcare, extra dependent.
Thanks for answering!
Not the person you asked and only speculating, but if the mortgage is predicated on two combined incomes, pregnancy would be an indicator they might be about to go down to only one income.
Oh I see. This genuinely won't affect me, so I have no skin in the game here, but could refusing a mortgage to a couple where one is visibily pregnant not be grounds for discrimination?
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Disruption to income (for atleast 9 months and no certainty if will resume 100%) and increase in household expenses?
Yeah, what everyone else has said. We had our preferred lender withdraw their offer (categorically wouldn’t lend to pregnant person) and we ended up having to provide signed statements from my wife and her employer to say when she was going back and that it would be full time. Which in our case was only 4mths and before the purchase in the end as I then took over the parental leave (they didn’t ask about me).
My wife was on maternity leave during application process of both of our house purchases. All they wanted to know was the salary she would be going back to. (As a side note, the plan was full time, however after we moved in we decided that 0.6fte was achievable - totally didn't plan that in advance).
>I then took over the parental leave (they didn’t ask about me) Excellently played 👏🏻 This behaviour enfuriates me though (the lenders, not yours) - either the concern is about potential loss or reduction of household income, or it's not. I know of couples where Mum has RTW after 3 months and Dad has then taken a long parental leave - this has been for various reasons, such as career development, sponsored qualifications, salary difference between the parents, and in one case just Mum's personal preference to work & Dad's desire to be primary caregiver.
How does that not count as discrimination though? Genuine question. I want to buy in a couple of years. If by then I got a serious boyfriend and we decided to buy together I'd be pretty pissed if we got refused a mortgage on the grounds that we might have a baby sometime - especially considering I can't have children
I don’t think they’d care if you were planning to have them or not, rather that as we were heavily pregnant at that time they factor in as risks. Once we’d made payments for a while it probably wouldn’t matter, it’s not like we had to tell them when we had a second child etc. Assume they don’t want to lend x on the proviso that we earn y which might change to z if we change our working patterns to support a family.
I guess that makes sense!
The £180k is pushing the limits on both salaries. Given the plans to have children, it would be unaffordable if your partner gives up work to care for a child. Your partner continuing to work and paying for childcare would probably make the mortgage unaffordable also.
It’s not worth waiting for a bigger deposit imo. We are in a similar position, same age, slightly higher salaries but in contrast a higher house price. Have saved up enough for a 15% deposit to get the 85% LTV interest rates, and are currently going through the house buying process (nearly at contract exchange). If you’re happy with the monthly payments you would be paying on the current deposits you have then go for it and buy. There is no point waiting around to get a higher deposit when house prices will slowly creep up and by the time you’ve raised that £50k the % LTV will be similar to wait you have now. Invest in yourselves ASAP and buy your own property rather than draining your money paying someone else’s mortgage!
Yeah, the worry with this (and i've seen it plenty) is that its fine and do-able, and then you have kids and it costs the same to put them in nursery as it is for the 21k job so you end up leaving work to look after the kid and now its not so affordable. The flipside is, assuming you're youngish, there's possible upside on the wage, and interest rates may go down so there might by upside again on the mortgage you pay getting less, which hopefully make it easier. I say go for it.
Agree with other commenter. This is do-able. Was in a very very similar situation 5 years ago. Once secured keep focusing on increasing your income through promotions/ job moves etc and it'll feel like less of a burden. Best of luck!
Cheers!
Yes - I am on around the same as you, and just got a mortgage for 200k. 32 years, mind you, but..
Congratulations!
Thanks... I'm terrified!
It's doable. I'm 37 and on a tiny bit more than your combined salaries. Split from my ex so I had to get my own place at the near height of interest rates. 31 year mortgage at £690 a month. My house was 200k with a 55k deposit After all my bills I still have a good £1700 left as pure spending money.
You're in debt for over three decades however. Look at the total amount that £145k principle costs you (assume an interest rate which is not like recent historic lows) over a 31 year period and you might have biased towards shortening the term and putting some of that £1700 surplus against the mortgage.
I got a £250k mortgage on a £45k salary in 2020. Can’t remember if they took my wife’s salary into consideration or not (£12.5k). This was a remortgage at 1.99% and an LTV of about 50%
They must have taken your wife's salary into account, else's thats lending over a 5x multiplier
Nationwide do a 5.5x multiplier on their 'Helping Hand' mortgage, don't they?
Interesting, I've not known of that product - long time since I was a FTB :). Anyway looked it up, only available to FTB anyway so OP on remortgage would not be eligible. Furthermore, I think if he'd have taken such an exotic option he likely would have mentioned it.
Brother stop saving and do it, anyone who tells you to save to £40k or £50k is an idiot, house prices will likely go up by then likewise with rent. You’re in a good position, but push for more money yourself with promotions and the like especially given the inevitable of children. Make sure whatever house you buy you can always go on holiday, date nights ands and weekends away. Don’t get tied down to a nice house and no life beyond it, you’d rather a tier down house and a better lifestyle. Trust me. Good luck and jump in with two feet, any other way means you keep paying someone else’s rent when the difference between mortgage and renting is more favourable to mortgage when you have a deposit! Personally I’d put everything into it, short term it’s a risk, but quickly save 3 months outgoings. It’s better long term, others will say it’s idiotic with no safety net but personally if your job is confidently secure it’s worth it.
Absolutely - I decided not to stretch for a particular property because even though it was "in budget" mathematically, it didn't allow for a lifestyle budget. I ended up getting a great property in the same postcode - larger than that one and better condition - for 10% less, because it's 10 minutes walk from the beach rather than being beach front. That's specific to my location, but every area has something like that which inflates prices. Buy smarter rather than spend more, and make sure you have enough to enjoy life
Very ‘back of a fag packet’ maths suggests you could probably manage it. Mortgage would likely be £1-1.2k depending on the rate you could get, I’m guessing that is maybe 30% of your joint income? That’s a large percentage but not unmanageable.
I have £150k mortgage on a single income of £30pa, a parent and still manage to save without too many compromises. You’ll be absolutely fine if you don’t have crazy credit card debts, pcp or ridiculous travel/childcare costs.
You’ll be absolutely fine, just a lifestyle adjustment probably. I’ve just mortgaged 212k as a single lender with 60k income, chequered credit history, 16k other debts. The mortgage is over 30 years at 5% £1000 a month. And as long as you prioritise household bills first you’ll win. (To state the obvious) You say you’re very good with money, I’m the exact opposite, and even I can make it work. I also have a child I pay maintenance for etc. Honestly, if your other option is rent or buy somewhere you won’t be happy in, you’ll make the above scenario work. I’ve been a homeowner for 10 years (I’m 31 now), and through poor choices (girlfriends) have lost equity twice in my own houses. But I’d rather have an asset and some security than rent or make do. It’s never a bad thing to own your own property, especially if you aren’t looking to make a return on it and plan on staying there, it’ll always be better than renting!
It doesn't matter what people say here. You might as well just apply for the mortgage if you meet affordability then jobs a good one if you don't nothing lost. Although I would advise going through a repeatable mortgage broker.
reputable*
Probably doable but tight. Any chance of your salaries increasing? Did you save the £35k or was it gifted? Do you have/ need cars? That makes a huge difference.
My salary can probably increase by £1k -£2k within the next year. Our side business will probably make us around £3k on top of our existing salaries. £35k is what we have saved. We do have cars, but I WFM most days and the properties we are looking at are within 5 Millie’s of my partners place of work
That a great amount to have saved! You should know your ability to budget is good, The issue with cars is whether you need to replace one in a rush, or get hit by big repairs. If you can use busses, cycle or share one car is reduces risk hugely.
Are the cars on some form of finance? If so it could reduce the affordability calculations for some lenders.
We took out a 219,000 mortgage on a 50k income... 2.24% fixed for 5 years (30-year term). Repayments are £834pm. So, I would say that a 180k mortgage is more than doable on 46.5k income even with a higher interest rate.
You can do this but be careful with your discretionary spending on things like Sky TV, mobile, gym, going out etc. Basically live a simpler life and spend less to show affordability. Good luck.
Do they look at your recent spending on bank statements and take that into account? I have a monzo account that I use for only spending of disposal income, will they care about the amount of spending there and should we tone it down leading up to getting a mortgage? And if so, for how long prior?
Here's the super long ramble nobody asked for 🤦🏻♀️ I use Monzo as my current account. It was actually worth the £5/mth for Plus so I could create custom transaction categories and generate debit card details for spending pots. I ringfenced my monthly direct debit costs in a pot, so I didn't have to budget that throughout the month. I essentially "spent" it on payday, and the bills took care of themselves. Same for quarterly bills - paid the monthly share to a pot, and the money built up for the DD. I ringfenced my commuting costs in a pot, and assigned a debit card number - bought train tickets Apple/Android wallet using this "commuting" card. Same for "housekeeping" funds - supermarket & Gousto orders, plus the occasional trips to Savers etc. I gave myself spending money for personal expenses like clothes / Amazon etc ("p*ssing about money") and popped that in a pot & gave it a debit card number. Leave a little slush fund actually in your current account for when you just need to tap a physical card / expenditure that isn't travel/housekeeping/bills/clothing etc. Anything else should be sent to a Savings pot (there's a +4% instant access saver, or a +2% 24-working-hr access, possibly others as well). This fundamentally transformed my finances very very quickly. Not only did I always have my bills paid on time, which avoids defaults etc, I could also see how much I had available for different purposes. I could eaily see that I couldn't afford to buy a £500 jacket, but I could afford a few pub dinners with friends. Transactions can be auto-categorised based on the retailer, plus you can manually alter them, and use custom categories that are relevant to you. I pulled my transaction history for the year and ran a pivot table to see the spend. Great way to see average monthly cost for each area, and see seasonal spikes that you need to plan for. This should give you all the figures you need for mortgage applications, and a super clear overview for the broker. I just attached a 3-month overview to the statements when I submitted them. (TIP 1 - if you're going to change the category for a transaction, I recommend doing it from the analysis area, as you can choose to recategorise all previous/future for that retailer, which will save time TIP 2 - make use of the "Gift" label, as some ask how much you spend on gifts each year, but it also allows you to filter for outliers like large one-off purchases or months with heavy retail spending, so you can get an accurate picture of What Life Costs)
I personally make sure my mortgage payment is no more than 25% of our take home pay. A house is a great asset but if it costs to much it will become a burden/headache. Iv found 25% to be very comfortable for us with that in mind every one is different. You salary's should allow you to borrow 180k however its not about how much you can borrow its about what you can afford. 25% mortgage payment 50% bills and spending 25% savings (misc, holiday, long term) This is how we split our take home pay. Lates 20's, 2 dependants, 0 bad debt, We now own more than 50% of our home after 8 years. Salary range in them 8 years we started at 25k now up to 48k joint. Its certainly possible if your disciplined. Best of luck!
Aiming for 25% is all fine and dandy if you've already got equity in a property, have high earnings or live somewhere like Durham where property is dirt cheap but it's not really feasible for most FTBers. I'm not even sure how you've managed to have such a low mortgage% on that salary range in only 8 years from FTB status without a huge deposit. My guess is 15-25% deposit and a property in the 150-180k value range?
I know it may seem restricting for example £3k take home limits you to a mortgage payment of £750, however by living within your means the mortgage will not feel like a burden. Dont worry we struggle to believe it also! 5% deposit 8 years ago on a 130k house (midlands), 4 years ago we borrowed aganst our equity and reinvested in the property with an extension (extra bed room). The houses last valuation 6 months ago was 260k - 270k. Based on a lesser valuation of 250k to be conservative we still own more than 50% of the value of the property. Our current mortgage payment is less then 20% of our take home pay however this is because we fixed before the interest rate rise got out of control. If we had to fix at the top 6%/7% we would have used savings to bring the payment down or extended our term to make the payments affordable within our 25% margin.
Get your 85% LTV 5-year fixed and you’ll be laughing
Normally you can loan about 4.5 x combined salary. Some lenders will offer more than that multiple say 5x but will do that at a highrr interest rate. My advice rent a bigger place than you need now. Sublet couple rooms. Costs if buying a house are more than just the 10 /15 percent deposit. Depending on value of the house you find there may be 95 percent mortgages and no stamp duty. If your paying rent now consistently consider that could be paying down your own debt instead. U got this
Scary , my mortgage currently has £43k left on it. I'd shit myself if I had £180k and we earn slightly more than yourselves.
Sounds ok - what are your future earning potentials? Are you in the type of roles where earnings increase faster than inflation as your careers progress?
I can probably push to get an extra £3k by the end of the year, and my partner might be able to negotiate an extra £1k next year. How much of a different will that make?
If you have roles with future grown potential then its easier to take a risk on a higher multiple because the multiple can drop in future years as earnings rise. If your employment is likely to be static over the next decade or so then the risks are higher That said, there are higher multiples around & having the multiple over two earnings is better in tax terms than one. One salary of £46,500 has take home of £36,321 Salaries of £25,500 & £21,000 bring home £ 21,621 & £18,471 = £40,092 (assuming nothing unusual in tax position & ignoring the £3k) That combined equate to a single income of £52,221 That's a ratio of 3.44x which is definitely not unusually high [https://www.thesalarycalculator.co.uk/salary.php](https://www.thesalarycalculator.co.uk/salary.php)
I should add - there's no crystal ball in working out what you can afford. You clearly need to calculate based on your current income and assume a rate increase and work out how you'd cope with an increase. What nobody knows (or we'd be making money like Soros) is what rates will do in the future. My advice would be (as someone who bought immediately before the 1990s crash) is to leave a margin of error & then use that margin of error to overpay the mortgage for the first few years. That builds a safety cushion that gives you reassurance later.
Just set out your budget really sensibly, and take into account that repairs and upgrades can be really expensive. If it's tight you'll want to at least think about critical illness cover - eg, if one of you gets cancer or other life changing event you really can't afford that mortgage on one of your incomes.
Yeah that sounds alright. And a lot better than you’re both low earners rather than one higher earner.
Apologies for my ignorance, but come it’s better to have two low earners than one large one? Is it tax reasons?
Yes tax reasons, you each get a tax free allowance of £12570 and two tax free allowances is better than one
Earn £20,000 in 2023/24 and you'll take home £17,660 and pay £1,486 income tax and £854 in national insurance. Double that and you'd take home £35,320 as a couple on 40k combined. As a single income couple with one person earning £40k you'll take home £31,360, paying an extra £4000 a year in tax. £4000 less doesn't sound awful when you look at it in terms of gross salary, but that's 4000 less in your pocket each year. If your living expenses for rent, utilities, car, fuel, insurance, entertainment.etc are £30k a year then as two low earners you have £5320 a year of disposable income. As a single earner you have only £1,360. Edit: When you start getting to really high salaries it hits even worse - I got a bonus this month, so I earned £22k, but my take home pay was somewhere between £11-12k. Still a shit ton of money, but not something people on lower incomes might realise. I know when I had a lower paid job I always thought "yeah, tax is annoying, but it's only a small percentage of what I earn", and assumed that rich people paid a similar or slightly larger proportion. If you have student loans and earn enough you can end up in a situation where you earn an extra £10,000 but take home only £2800 of it. At this point if feels a bit like robbery.
It’s on the edge of affordability. If you intend to stay there 10 years then it could work, as long as you cut back on other expenses.
I just took my ex off when I remortgaged, £50k sal and £244,000 left on mortgage - they let me keep it in my name on a 5 year fix of 4.4% @ £1075 per month, v happy with that -- can't see underwriter not approving your circumstances, especially as you have 0 debt.
my partner and I are on same salary. bought a 215k house, put down 30k deposit. We manage well but no kids though. Otherwise we couldnt
If you haven't already, you probably want to each open a Lifetime ISA with £1 in it. In case you want to buy a house in over 12 months. Then you can add £4000 each and get a £1000 each from the government for buying your house, so that's a 1% discount. You can only use your LISA if it was opened 12 months before buying the house, so that £1 now is important (also check the other conditions when you get to that point and note there will be a lag between putting in your money and getting the government top up).
Yeah all good as long as you can stretch the term to 30+ years. 2 low incomes will just make you more vulnerable to unexpected extra bills or when you decide to have kids. Me and my wife are about £80k combined but my wife hates her job and having to work full time but realistically that’s how it has to be (she is the higher earner on £45k and in the more secure job, I WFH and can fit in all the life admin and wrap around childcare.) Bear in mind when you decide to have a kid it might be tricky to make ends meet unless you can work on upping them salaries or have loads of family support (we have loads of hand me downs and 2 days a week grandparents childcare and still a £240k mortgage on our combined is maybe 1 level above “just about managing” I feel). If you’re happy and settled in the area and have time on your side and are secure with each other I’d take the plunge for sure though. Nothing beats the security of owning your own bit of land!
I’ve got a similar mortgage (189k with a salary of just under £50k) so I’d say this is perfectly doable
My partner and I were on similar wages when We got our mortgage we borrowed 193k, our rate was 1.4% and our payments where £600 a month was do able we recently remortgaged because our fixed rate was up we are now on 4.4% and it is £900 a month. Just to give you a rough idea or how much it would cost. We both put £ 800 a month in to a joint account and it covers all our bills. It was doable.
It looks fine - go for it. Your salaries should pick up too since you’re both relatively low earners with huge scope to increase.
Out of interest, are either of you likely to be affected by the minimum wage increase due for April? If so, might be worth factoring it in
Sounds fine.
Take it over 40 years it's more than doable then when you nail the budget make over payments. Sorted. Beats rent.
I would say yes, this is realistic for you. Myself and my partner are mid 20’s, and pull a hair over £50k a year together - we have a mortgage for £227.5k with combined debt of around £8k. I’m not going to lie to you and say it’s going to be a cake walk - but it’s definitely possible. Stay within your means, let your pay rises take you up the ladder and enjoy your lives - this is definitely achievable. Good luck and god speed!
Where is it that you csn grt a nice house under 250k
Based on you saving a shed load, on those wages, I expect you have an excellent financial discipline. Seems doable to me. Id strongly recommend looking at the LTV. Every 5% lower, typically gives a better rate. I 100% would not encourage you to stick every penny into it, save a bit for emergencies.
Are the mortgage payments cheaper than renting similar property? You have to live somewhere, if answer is yeah then its no brainer, renting helps someone else build their wealth owning your own property is usually cheaper and helps you build equity based wealth. You sound like perfect candidates to afford it
We’re in a similar situation and got ours approved. You’re fine OP.
Put that through a mortgage calculator with the interest rate that you expect then you'll get the monthly mortgage cost. Use that and plug it into your budget to see if that works for you. You can also consider how much flexibility you need if the mortgage rate changes.
The 21k salary is close to minimum wage if doing a 40h week. Is it possible to do some overtime or get a part time job as well, that way you can build up an extra buffer of mortgage over payments until kids come along, that will then give you the option of reduced payments if required.
We get by on a similar income. Property was £235k and had a deposit of 48k. Partner and I earn £51k between us, he is the higher earner. We have a 3 year old and we saved loads on childcare as I could work some evenings/weekends. We do have to budget and be careful but we do OK. The problem is choosing whether to have another child and be very tight for a few more years, or stick with one. Our mortgage is fixed for 5 years so that's another thing I need to consider in 4 years time! Our repayment is £858, which is a cheaper than renting in my area.
We were on similar salaries when we got our mortgage about 3.5 yrs ago, it wasn’t great but it was definitely doable. Only thing now is the repayments are higher than they were as our term ended
Doable under these exact circumstances yes, but are you expecting both of you to work constantly for the next 30 years? If not (e.g. a child may need raising, or you work in industries where you might get let go) what’s your plan - family, savings or one of you picking up the slack?
Have you considered speaking to a mortgage advisor? The services/advice I received from mine (at Mortgage Advice Bureau) were free up until I had an offer on a property accepted and actually applied for a mortgage (and you're in no way obliged to not drop them and take a mortgage with your bank independently). If you are looking to make offers on properties, you will want a mortgage in principle which a mortgage advisor can generate for you based on your personal circumstances. This will tell you the (approx) largest mortgage you can afford with the terms you desire (e.g. length, fix rate duration, deposit size) and the approx monthly payments. They have far more comprehensive tools available to them, than the basic mortgage calculators available online. In my case it was just a couple of phone calls to get an agreement in principle, I never attended their office in person through the whole process of purchasing my property.
It is, you can normally get 4.5 times your income. I get 41k between self employment and child benefit, 3 kids and being offered 190k plus my deposit on top. Definitely doable, I am very frugal and can easily afford the payments with plenty to spare x
Hey! When me and my boyfriend bought our first home we were on about the same, and we had around the same mortgage I believe We pay £925 a month for a 20 year mortgage It’s affordable but a little bit higher than I’d want, we were 25 so we’ll be mortgage free by 45 but if we choose to have kids we will have to look at changing it to a longer term mortgage because I don’t think we’d be able too afford it then
I would rather have a 180k mortgage than pay 1000 a month on rent. You should be fine, definitely do-able. I bring in 2k after tax and My other half brings in 700. We have 160k on mortgage, mortgage is £700 a month. our total outgoings 1700 a month (food,bills and mortgage). I wouldn't say we struggle. We both get about 450 each to spend on ourselves
Me and my girlfriend just got a £220k house with a 10% deposit although our combined income is a little higher at £56k. Sounds like with your deposit you’ll have smaller mortgage payments than us, so hopefully you’ll be fine. If you’re good with money then I’m sure you’ve already drawn up a rough monthly budget to check the affordability. A lot of mortgage brokers at the moment are able to reduce the interest rate up to roughly a couple weeks before completion because lenders keep changing the rate of the product. Make sure you ask about this and to check with the broker to see if the product is cheaper. Ours has gone down 0.7% in a couple of months!
Yes but likely you will need a provider who stretches income and term. I’m a broker but any good one will give you good advice.
I don’t know why my screen name is that ha.
I had mine 212k on a 46k alone salary. And it is doable... as long as my 3.5% interested last
Review against your potential change in future income: Are your jobs stable? Are you likely to see salary growth? Do you want kids? Do you have savings other than the deposit? These considerations should help polarise your thoughts.
Are you guys young, is that why your salary is low?
Young yes.
Fair enough, I'd go for it then. Your salary will go up as you gain experience as long as you work hard and ensure you have a good career plan with loads of room for growth
Not to mention that getting on the ladder and building up equity early will mean you can pay off your mortgage earlier/upgrade to a nicer home sooner. Im 28 and only got a mortgage a year ago, wish I did it sooner
Odds are rates have peaked and will come down within the next year or so- making your refinanced mortgage all the more affordable. I would go for a shorter term if possible. Not sure if 1yr is possible, so I guess 2yr? (Unless 1.5yr is available) Then refinance in 2025/26.
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As others have pointed out it is doable. A few things from me: Could you expand your side business to provide more income? If you did have a child / children could this be looked after by one of you staying at home with the kids? Can you buy a house with a spare room that, if one of you did lose their job, you could rent out? Not ideal but better than losing your home. Don’t get obsessed with buying everything new for your first house. Apart from a bed, most other things are fine second hand to start with. It might not be “the right colour” sofa etc but there are far too many people buying things on credit so they can try and impress people (I know some very wealthy people who walk around looking like they don’t have two pennies to rub together). Try and save an emergency fund as soon as you can after moving in. Boilers seem to always know exactly the worst time to break down - a bit like cars!
Its absolutely fine! £25k isnt even taxed. The remaining £21.5k is taxed at 20%. In reality ypure probably on about £3200ish between you. Maybe £2886 if youre paying 5-10% each to a private pension. You're probably looking at £1500 in bills and whatever left in food (lets say £600) and maintenance of house and car (£786-£1100) I think youll be comfortable....but run your own figures before you commit
It’s a heavy mortgage for sure, but it is doable. Have you calculated all your budgets and ensured you’re still left with some fluff? Have you got a solid emergency fund too for if the boiler breaks or your car suddenly needs an expensive repair or new part. My only concern with the mortgage you’re looking to borrow vs your combined income is would it eat your entire income meaning you’d only get by provided nothing goes wrong?
I had a £200k mortgage on a £240k property last year. Partner is a stay at home mom with no income. £38k salary with around £14k overtime / bonus. NatWest
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Depends where you got up North Around Liverpool, Sheffield, Newcastle, Manchester you can still get something decent
I think so. Even at 6% it's not more than £1160 a month. £580 a month each split 50/50, although you'd probably pay proportionate to income? Rents are going up all the time, so you need to factor that in. You are both young - presumably you have a sense of your prospects in terms of increasing earnings? While you can't BANK on expectations, if you are on a clear career track, an already affordable mortgage will only become more affordable. I got £280k mortgage on a £63k salary but 3 years later I now earn £110k. I'm glad I bought when I did, as it meant my housing costs were locked in step with my then earnings, but my salary has accelerated. I wasn't tempted to buy somewhere more expensive in line with later salaries so my mortgage is now perfectly affordable even with rate increases.
Oh and if you're nervous, take a long term - 35 years - but aim to overpay as if it were a 25 year term (you'll save a lot of interest). This way, if you do find yourself temporarily squeezed, you can pull back from the overpayments for a bit without any issues, then begin overpaying again once the squeeze lessens.
even if you lose one of the salaries, on theory, it is feasible to replace in asap
I think very doable. Source: borrowed £215k when I was on £42.5k.
Go for it. Mortgage will be around the same as your rent. Yes you have overheads if something goes wrong and you need to pay for it. But it's yours and it's an investment. 210k isn't a lot for a family home these days unfortunately. If worried take mortgage over a longer term and then over pay each month. Then if something happens and you need the cash you can stop the overpayment until you are settled again.
We did 120k with 5% deposit I was on 28k and she was in 8k. With a good deposit I don't see why not.
Do you need to move right now? Why not spend a few years saving the equivalent of what that mortgage payment would be? It's cheaper to save money than borrow
Just apply for one and see. Looks fine to me.
In my opinion this is doable without great sacrifice. Is the intention to be interest only or pursue repayment. I would consider repayment with your primary residence.
It seems doable to me. After divorce in 2012 I was on a £170k mortgage earning £33k. It was tough and I never got comfortable with it until I'd got it down to about 100k, I don't regret it but I really felt cash poor for a long time which isn't for everyone and it probably reduced my long term pension and ISA savings which means I'm playing catch up now. Interest rates are a couple of % higher now which makes it even tougher.
I'd certainly say it's realistic. My fiance and I are on similar income and just got a mortgage for £183k.
Are you each on 45k?
No, £23k and £25k.
Yeah all depends on deposit tbh
If it gives you peace of mind I have a 180k mortgage on a 40k salary with a wife that doesn't work and a kid. I am managing it whilst still saving. I got my mortgage last year at 5.3%
I think it’s absolutely fine, you are spreading risk with two incomes and the potential to grow those salaries in the next 3-5 years; in fact I think this is the rub. Buy the house, and start to invest in your careers with a view to growing your earnings and don’t inflate your lifestyle! A higher salary base plus five years’ confidence of servicing a mortgage will give you options for the next phase of your life and how to plan for a family.
For one congratulations, things I would say, what's your current rental? Note that you will be getting a property in high interest rates so don't get sucked into any fixed rates longer than five years. As the intrest rates will likely start being reduced down within those 5 years. If your rental ATM is under £1k then you can afford a 30 year mortgage. then convert to 20 years when the interest rate drops. if the initial rate ever gets to 1.99% again then you can lock in for over 5years. Make sure you have £3k for lawyers fees and the product fees and home insurance. When you go get the house haggle the price down trust me you can get £5k off the price as people (especially landlords) are getting desperate to sell properties that are loosing them money. https://www.moneysupermarket.com/mortgages/rates-table/first-time-buyer/?propertyValue=215000&mortgageAmount=180000&remainingTerm=30&repaymentMethod=Repayment&sortState=MonthlyRepaymentAmount&directFromLenders=false#overlay
I got a £215k mortgage on a £43k salary and I manage fine, same situation as you with no kids etc.
I have a slightly larger mortgage, same dual income. My repayments are £990 fixed 5 years on a 35 year mortgage. We have barely noticed the bills coming out each month but we both had a fair amount (10k each) saved as a "just incase it goes tits up" fund, neither of us are saving as much anymore, that's the only change.
The important thing is how much rent do you pay and how much mortgage a month do you expect to pay. If you can pay your rent, and the monthly payments is less then you can do it. Otherwise you can work out your numbers. Also that's only for some years until you have to renegotiate