Is 875e pm considered an affordable mortgage payment?

M

matrix

Registered User
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Like the title says, we make ok money now and are about to purchase our (hopefully) forever home on a 30yr 875e pm. Bit worried that this may be on the high side as ideally we would like to reduce working ours/retire in our 50s. We have a reasonable deposit of 50% and are thinking of going for it instead of waiting for prices to drop.

Is 875e pm (30yr) reasonable compared to the median payment, we couldn't find much stats on it.

Thanks
 
I would think to get a answer to this you'd need to supply more info like how much you earn, take home pay and how much the mortgage is for and the rate you've applied for??
 
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Household Credit Market Report

This report collates information from a wide range of internal and external sources to give an up-to-date picture of developments in Ireland
www.centralbank.ie www.centralbank.ie

The Household Credit Market report published by the CBI may have data on average mortgages.
 
Cervelo said:
I would think to get a answer to this you'd need to supply more info like how much you earn, take home pay and how much the mortgage is for and the rate you've applied for??
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Sure:

Earnings: 86k
Monthly take home: 3780e (After pension and employer stock purchase program)
Property price: 425k
Deposit: 185k
Mortgage rate: 1.95%
 
For somebody on 86k, 875 pm is fine.

I personally wouldn't want a 30yr mortgage, too much interest paid.
 
Protocol said:

See table 1, the mean loan size is 200k outside Dublin, 300k in Dublin.

The typical original LTV is 80% for FTBs.

Mean incomes for FTB are:

Dublin = 93k
Non-Dublin = 70k
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This helps, thanks a lot
Protocol said:
For somebody on 86k, 875 pm is fine.

I personally wouldn't want a 30yr mortgage, too much interest paid.
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Agreed but we want to be flexible but aim to pay it off ASAP. One room will be rented out for 550e pm so it should help, i am just a bit cautious after witnessing the last crash.
 
Simply put you've more than enough income to cover your mortgage even if there is a rise in interest rates
I'm old school and also think a 30 year mortgage is to long but times have changed and there now standard for a lot of borrowers
But would agree that it gives you flexibility to over pay or not depending on circumstances
And the renting of a room is a nice bonus
I wouldn't be worrying about property crashes, this is a home your buying your "forever home" not a property investment per se
 
matrix said:
This helps, thanks a lot

Agreed but we want to be flexible but aim to pay it off ASAP. One room will be rented out for 550e pm so it should help, i am just a bit cautious after witnessing the last crash.
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You've a very decent deposit. You have an excellent mortgage rate. (7 year fixed I presume)

You will have extra tax free income with rent a room.

You have nothing to worry about.

Building costs and real income has grown substantially since the crash, so in real terms prices are not overly excessive and substantially below the "affordability" levels of 2007
 
Protocol said:
I personally wouldn't want a 30yr mortgage, too much interest paid.
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This is just not the way to look at it.

1) You should take out a mortgage for as long a term as possible and then decide yourself over what term to pay it off.

2) But a more important point is that it allows the borrower to decide what his financial priorities are. There is nothing wrong with paying mortgage interest over 30 years. It may make sense for the person to prioritise pension contributions over clearing their mortgage. It may make sense for them not to clear their mortgage quickly because they need the money to pay for kids' college fees. For example, it would be wrong to clear a mortgage at 2% only to find oneself borrowing at 9% to fund college fees.

Brendan
 
Brendan Burgess said:
This is just not the way to look at it.

1) You should take out a mortgage for as long a term as possible and then decide yourself over what term to pay it off.


Brendan
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Fair enough, as long as borrowers are disciplined enough to overpay, to prevent paying too much interest.
 
peemac said:
You've a very decent deposit. You have an excellent mortgage rate. (7 year fixed I presume)

You will have extra tax free income with rent a room.

You have nothing to worry about.

Building costs and real income has grown substantially since the crash, so in real terms prices are not overly excessive and substantially below the "affordability" levels of 2007
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Thank you for the reassuring words. I am going for it and will try pay off as much as possible after fixed term is up for now it is 10% per year. I guess family history of being burned has me cautious but i do realize the deposit is generating zero income plus i will need to buy sooner rather than later.

Thanks
 
Protocol said:
Fair enough, as long as borrowers are disciplined enough to overpay, to prevent paying too much interest.
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I think you are over concerning the issue regarding the amount of interest to be paid over the term of the mortgage. Monthly repayments are less punitive as the years go by as mortgage holders salaries generally increase and inflation lessens the impact especially if there is a significant fixed interest period. Right now when someone needs more money for other priorities and they are younger, a longer term mortgage is an attractive option. I'm halfway through a 35 year mortgage. It used to eat up 33% of my take home pay but now takes up less than 15%. I'm glad I stretched it out even if it meant more interest overall as it meant I had more disposable income during the times I needed it more when I was younger and on a lower salary. I'm now in a good position to overpay to reduce the interest whereas 10 or 15 years ago I wasn't.
 
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