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eosh
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what's your minimum mortgage repayment %

Fri May 16, 2008 6:58 pm

Hey there,

This might be something that you'd rather not answer and that's fine, but i was just wondering what % of your salary do you put into your mortgage?

DH and I have seen an awesome house in a suburb we love (currently living in the same suburb but in a villa. We want to upgrade to a bigger house before any babies come along) but even if we sell the place we are in now, our minimum repayments seem HUGE!

If we factor in that I will stop working for a period of time when we do have a baby, our minimum mortgage repayments are 75% of DH's after tax salary 8O I know that if your mortgage repayments are more than 30% of your before tax income then you are officially considered to be under "mortgage stress" (ill have to find out what DH makes before tax to do the calculation). If the two of us remain working full time, the repayments would be 46% of our after tax income.

Is anyone else in the same boat of facing a seemingly huge mortgage? Is there anyone who has stopped working to have children and still has a big mortgage? I'd love to know what its like when you actually get there and suddenly have a lot less money to live off. Do you just cope or do you revert to living off "black and gold" and shopping at "good sammies"? Of course, I still look for a bargain and to save money wherever I can but we are pretty comfortable at the moment and don't need to worry too much about chasing the cheapest groceries around, still both buy our lunch at work most days, can afford to run and maintain two cars. We don't take holidays or go out for dinner much, don't buy CD's/DVD's unless they're on sale, don't buy new clothes/shoes very often or only when absolutely necessary and are lucky enough to be in a villa that hasn't needed renovations or any fixing up.

My mum seems to think that such a large mortgage is fine and we should go for it. But this is also the same person that until recently thought we should be able to afford to live in suburbs where the average house price is $800K (she's not even close) so I'm not so sure that she has any idea of the reality of what its like to try and buy a house so I'm not sure if i can trust her opinion. I know she's been there herself and raised three children on 1.5 incomes but it was also 4 times more affordable to buy an average house on an average income 30 years ago compared to now (read that in one of the papers last week).

Sorry for the massive rant, I am just feeling so stressed about the whole thing today and would love a comparison for how much other people commit when they buy a house :(
 
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zoltansprincess
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Re: what's your minimum mortgage repayment %

Fri May 16, 2008 8:28 pm

We have a huge mortgage too, comparative to income! But we are at the start of our professional careers and are still young (im 21) so by the time we have kids (e.g. in 6 years time) our salaries will be higher, our mortgage will be slightly more managable, and we will have paid off our hecs debts already. Despite this though, I am assuming I will have to return to work before 12 months in order to comfortably keep up with the repayments - this is a given though surely for most peoeple who buy now/have bought recently. In Brisbane, most suburban house prices are well over $400k, with very few under that price - and that's just for something entry level.

Only you know your budget though - can you be strict? are there a lot of extras you could cut out if you had time off to have kids? Can you pay more off before you have kids then have a break on paying your mortgage?

I would sit down and work out your finances, keeping in mind the cost of child care, nappies, baby items for when you do decide to have a family
 
Skylah
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Re: what's your minimum mortgage repayment %

Fri May 16, 2008 9:06 pm

We bought our house on what we can afford to pay on one wage in case one of us got sick or we had kids etc. At the moment its at 14% of our combined income after tax. Its a modest 3x2 that would need to be upgraded if we have more than 2 kids.
 
Ezza's-gettin-hitched
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Re: what's your minimum mortgage repayment %

Fri May 16, 2008 10:08 pm

Our mortgage is 95% of my income after tax and approx 47% of our combined income after tax.
 
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Andie1983
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Re: what's your minimum mortgage repayment %

Fri May 16, 2008 11:47 pm

Our min repayments are about 15% of our after tax pay per month combined

ETA: I forgot about our investment property, that takes it to about 23% for both houses

As for the OP's question (sorry too tired last night), only you can know whether you can afford the extra. There are things to consider - how long do you want off after the baby is born? When are you thinking about having a baby - will you be able to save and put some fall back money aside or pay extra on your homeloan so that you had something to eat into before you finish work?

FH and i are very similar in that we are very comfortable right now. FH is the main income earner, but my salary is pretty decent as well and it really helps us get further ahead as well as live a very comfortable life same as you. Ideally I would love to quit work altogether when we start a family but who knows with the way interest rates are headed and knowing that the extra money could really help ease any stress we may have.

If it were me, I would probably go for it. But I would have a set plan ie when is a baby coming along, will we have time to save some money for a fallback etc. I wouldnt just jump into it. I would definately utelise the option of paying extra off the loan in the really early stages before bubs came along. There are lots of little things you can do.
Last edited by Andie1983 on Sat May 17, 2008 10:31 am, edited 1 time in total.
 
nikeedee
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Re: what's your minimum mortgage repayment %

Sat May 17, 2008 9:15 am

FH and I are doing pretty good, our repayements are just under 10% of our combined income
 
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zoltansprincess
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Re: what's your minimum mortgage repayment %

Sat May 17, 2008 9:40 am

nikeedee wrote:
FH and I are doing pretty good, our repayements are just under 10% of our combined income


wow is that after tax? I'm jealous! :lol:
 
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erinjb
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Re: what's your minimum mortgage repayment %

Sun May 18, 2008 10:50 am

Our mortgage repayments are 100% of FHs salary, although we choose to pay more than necessary. We do our day to day living and saving with my salary.
 
Ezza's-gettin-hitched
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Re: what's your minimum mortgage repayment %

Sun May 18, 2008 10:55 am

I can't help but be envious of those of you who only use 10-15% income on your mortgage :(

It upsets me that we both get paid utter $hit :evil:
 
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Andie1983
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Re: what's your minimum mortgage repayment %

Sun May 18, 2008 11:33 am

Cheer up Ezza, our house isnt some sort of mansion, its very modest but cute :) we have high incomes yes, but we saved our butts off to buy our first home and have put as much extra into it each month as we can which has lowered our repayments. We have refinanced to buy another house, and in doing so have lowered our repayments on our own home IYKWIM. If we still owed the same amount and didnt refinance we would probably have higher repayments (although with interest rate rises I think it works out about the same as 2 1/2 years ago when we first started out :evil: ). Plus there are things like property prices in the area etc to take into consideration - you being in Sydney probably have a huge repayment, and the cost of living is probably very high up there. KWIM??

I dont believe it matters how much you earn, you can definately get ahead in life. There are little things you can do here and there for example putting an extra $10/wk (making sure its a weekly payment) on a $400k loan at 9% over 30 years, you are going to save yourself nearly 9 yrs (8yrs 10mnth to be exact) and $265k in interest 8O Its amazing how it works, but can you imagine what you could do with that $265k instead of give it to the bank?? I know not everyone can afford that extra and some loans arent set up that way, but if you can, this is something I highly recommend.
 
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ziella
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Re: what's your minimum mortgage repayment %

Sun May 18, 2008 2:17 pm

Our mortgage repayments are currently approx 15 - 20 % of our after tax income.

FH and I are by no means earning fantastic incomes. Our combined incomes are less than $110k a year. We have a small mortgage, and thats because we only have a 2br unit. But this suits us at the moment. On this income, we are also saving $1k a fortnight to go towards the wedding.

Once the wedding is over, we are putting alot more onto the mortgage than we need to. This will allow us to refinance, and maybe buy a property in Melbourne for when we do start to have kids.
 
Little Princess
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Re: what's your minimum mortgage repayment %

Mon May 19, 2008 12:37 pm

our mortgage is about 30% of our income perhaps a bit more with all the interest rate rises but thats cool. We're both still in uni for the next 2 years so our incomes are going to rise substaintially so we're really happy.
 
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princessbridzilla
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Re: what's your minimum mortgage repayment %

Mon May 19, 2008 12:58 pm

Our mortgage repayments are 44% of our combined income after tax I know this is pretty big but by no means do we feel uncomfortable paying it. I think the main thing you have to factor in though is rate rises and if you will still be able to afford you repayements if they keep going up in the last few months with the rate rises our repayments have gone up $100.
 
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MissAlia
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Re: what's your minimum mortgage repayment %

Tue May 20, 2008 12:55 pm

This is so interesting!!!
100% of my wage goes on to the house but in 2.5 years we have over $30,000 in surplus.
so hopefully when the interest rate cycle starts to turn we'll have more.
So when we do have kids it won't be to much of a drama.
But we are very lucky in the house that we brought. It's 40years old 3 bedroom nothing wrong with it. But its on a massive block so we could always knock it down and build 3x3bedroom town houses. Which are selling for $300,000-370,000. i love living within 10kms of the CBD!!!!

But at least we have houses i just think of all my friends that live at home that only have car loans. They might have cash but i have a house!
 
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bridetobe08
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Re: what's your minimum mortgage repayment %

Tue May 20, 2008 2:17 pm

Ours will be (house is still getting built) about 37% of our combined after tax income. It was 41% but I just got a night job (as well as my full time job) to help out with money so that it won't be as tight. The area that we live in is quite expensive but we needed to get into the market so bought a block of land ($230k) and building a house ($180k), but as soon as it's built we'll have made a profit on the value/cost of about $45,000. The only way we could have gotten a cheaper mortgage was to move to Brisbane which wasn't possible
 
KateM
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Re: what's your minimum mortgage repayment %

Tue May 20, 2008 2:26 pm

Ours will be pretty close to 100% of my salary - and DH and I are on similar money so nearly 50% combined. Its going to be hard.
 
kylee
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Re: what's your minimum mortgage repayment %

Wed May 21, 2008 2:46 pm

We use exactly 66.66% of my wage on our mortgage (that includes paying extra) with the other 33.33% I pay off a car loan, and save for the wedding. FH earns the same as me, we use his wage to live off. I don't want to brag but we do it pretty easily at the moment. Things will be a lot harder once we are married and have kids. The only reason we do things so easily, is because when we bought our house, it had to go solely in my name and the calculations were done on my wage only, FH was a very naughty boy before I met him and had too many black marks on his credit history (they all come off for good next year)
 
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Re: what's your minimum mortgage repayment %

Wed May 21, 2008 3:20 pm

Our repayments are about 33% of our combined salary (after tax). We moved from Sydney to Canberra so that we could afford a nice house, and it's a modest house - 3 bedroom, 525 sq. metre block. We're doing a lot of work on the house at the moment, and I'd say it's getting close to the best house in the street! (Even though they always say to buy the worst house in the street!). So yeah, we're pretty comfortable in our repayments and could handle a few more interest rate rises before it really started to hurt us (but hope like hell we don't get anymore!), and I earn an average wage, and FH earns a bit above average I'd say (although he thinks he earns an average wage).
 
nikeedee
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Re: what's your minimum mortgage repayment %

Wed May 21, 2008 3:36 pm

zoltansprincess wrote:
nikeedee wrote:
FH and I are doing pretty good, our repayements are just under 10% of our combined income


wow is that after tax? I'm jealous! :lol:

Yeah that is after tax and our loan is much smaller becasue our house was purchased way before the current boom.
 
dcee
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Re: what's your minimum mortgage repayment %

Wed May 21, 2008 5:42 pm

Probably just under 50% of our combined wage but that is also putting some extra away for when the time comes to go down to one income.
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