Posted on 6 January 2014 by Esme
Hello, My parents are midway through a divorce and are selling the family home to each buy separate properties. My Mother and I are discussing potentially buying together. We will have a deposit of £250k but are looking at homes in London for around £550k - £600k. I'm 23 and earn £26k a year, my mother is 52 and earns £85k a year. She will only be working for another 10 years or so, do you think we're likely to find a mortgage for what we're looking for?
If we start by looking at the top end of your price range with a property at £600,000 and putting down a £250,000 deposit, then the loan required will be £350,000. Assuming you have no other liabilities, then this looks feasible. However, we would need to be sure that you can afford the monthly payments? A mortgage of £350,000 over a term of 10 years will cost £3,380 at 3%, £3,544 at 4% and £3,712 at 5%. If the monthly payment is affordable, you may also want to plan for eventualities should something happen to your mother or her income as your salary on its own wouldn't be sufficient to maintain the repayments on your own.
To answer your question – Yes, you could find a mortgage but you will need to carefully address present and future affordability. I hope the above helps and we look forward to assisting you.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.