Reply to: How much are you prepared to pay towards mortgage?

[DirtyDog]

No he just lives in the London region..... A lot of my friends living in the SE spend more than 60% of their permie income on rent let alone a mortgage that is actually going somewhere.

Absolutely not.

I just structure my pay frequency differently.

[NorthWestPerm2Contr]

As little as I can get away with. I have no real interest in paying my mortgage off, that leaves me with a big chunk of total assets in a very illiquid form which would also consume a big proportion of my IHT allowance.
I would much prefer to have half of it still owned by the bank and use the relatively cheap money to invest elsewhere.

chicken and egg situation.

Bring down interest payments so you are paying less to the bank and can afford to invest more or use the money to invest instead of paying off the mortgage....

[lukemg]

As little as I can get away with. I have no real interest in paying my mortgage off, that leaves me with a big chunk of total assets in a very illiquid form which would also consume a big proportion of my IHT allowance.
I would much prefer to have half of it still owned by the bank and use the relatively cheap money to invest elsewhere.

[PEEL]

No he just lives in the London region..... A lot of my friends living in the SE spend more than 60% of their permie income on rent let alone a mortgage that is actually going somewhere.

I live in central London and spend and in my last permie role was forking out just over 30% of my takehome. I know people who don't work in finance that pay out 40% - 50%. The justification is that you earlier in your career you expect your pay to jump more than the inflation on your expenses, so the % will go down until you upsize and then the process starts over!

[NorthWestPerm2Contr]

60% of net monthly income goes towards servicing your debt, your mortgage? Is your day job running a government of a European country?

No he just lives in the London region..... A lot of my friends living in the SE spend more than 60% of their permie income on rent let alone a mortgage that is actually going somewhere.

[amcdonald]

Correct. I remember the day as accountants and partners somewhat panicked

I was on a campsite on the outskirts of paris, hiding in a tent belonging to a load of irish students....

At the time the ERM wasn't the worry, it was the drunken french farmers wandering round fire off shotguns and burning effigies of Mitterrand

Plus the fact that my holiday spending money was tied up in Travellers cheques (thankfully in dollars), so was largely unaffected at that time

My mortgage was only £300 a month, so wasn't that bothered by the hike in interest rates

[mickey]

As a percentage of net monthly income, somewhere in the region of 60%

60% of net monthly income goes towards servicing your debt, your mortgage? Is your day job running a government of a European country?

[SantaClaus]

Can you imagine what will happen to the housing market, and more importantly economy, if that happened again?

It's not going to go from 0% to 12% in a few years let alone a few days....

Yep, the politicians will see it doesn't. Too many vested interests.

Just keep cranking up the quantitative easing machine.

[DirtyDog]

As a proportion of your net monthly income.

Would it be more like 30% or would you risk paying 50% or even more?

As a percentage of net monthly income, somewhere in the region of 60%

As a percentage of net annual income, about 14%

[NorthWestPerm2Contr]

You clearly weren't around on Black Wednesday as interest rates went from 10% -> 15% and back to 12% over the day....

Can you imagine what will happen to the housing market, and more importantly economy, if that happened again?

It's not going to go from 0% to 12% in a few years let alone a few days....

[eek]

ERM?

Correct. I remember the day as accountants and partners somewhat panicked

[SueEllen]

You clearly weren't around on Black Wednesday as interest rates went from 10% -> 15% and back to 12% over the day....

ERM?

[Antman]

I remember that, before that it'd been 10 francs to the pound for donkeys years overnight it went to 8 francs

[eek]

The can't see interest rates going up for a long time yet and when they eventually do it would be very gradual. Otherwise the bubble will fully explode.

You clearly weren't around on Black Wednesday as interest rates went from 10% -> 15% and back to 12% over the day....

[NorthWestPerm2Contr]

Not to dissimilar figures to us, I'm guessing your outside of the S.E. bubble from your username so a bit of house price inflation/stability could be a good thing. It will be interesting to see how bringing forward the help2buy scheme is going to impact the none S.E.

The can't see interest rates going up for a long time yet and when they eventually do it would be very gradual. Otherwise the bubble will fully explode.