Mortgages

[scoobydooby]

Can anyone tell me if there's a general guideline figure of what your monthly mortgage repayments should be as a percentage of your monthly income? For example, should it not exceed 20% of your income?

Many thanks XX

[dans1977uk]

There is no set figure for a percentage of your income. In this country lenders tend to offer a multiple of your income, say between 3 and 5 times, though this varies between lenders, quite significantly.

In France and Spain lenders look at your net monthly income (EG: after tax) and will offer a loan which gives a monthly repayment up to a set level of your income.

Many lenders in this country are now using a similar system based on affordability, so perhaps if your income is only �10,000 per annum 50% of your income would be a very high amount to lend as the remaining 50% wouldn't leave enough for household running costs, but if you earn �75,000 if you had to live on 50% of the income after the mortgage it wouldn;t be a problem.

Take some independant advice from a mortgage advisor near you as there are so many options it can be bewildering!

Hope this helps a bit! Dan

[scoobydooby]

Thank you for that. But is there anything to say that if you're over a certain percentage then you're out of your depth?

V

[chitchat]

What lenders are looking for is your monthly costs ie gas, electric, insurance, travel costs, housekeeping etc including your mortgage. Add all those up and subtract this from your monthly take home pay. You should be left with a reasonable surplus. Anything over �100 would be good. If you are left with a negative figure - ie your outgoings are more than your monthly income then they wont give the amount of mortgage that you are looking for. Lenders are now being more sensible about the amounts they lend. No point in lending you so much that you cant afford to pay it back and you get yourself into trouble. Hope that helps