Double spend on mortgage, dream house vs. Smaller mortgage with more spending money?

We’ve stayed in the smaller house and prioritised holidays, having a wonderful life with our children and saving for their education and the house deposits they will no doubt need. No regrets. Moving house is for you not your children as they will be fine anywhere as long as it is a loving home.

We’re about to do this. Our mortgage repayment will almost double. It does feel scary, and it will require some lifestyle adjustment. An opportunity came up to buy a truly beautiful home in the right area, which will improve our quality of life as a family hugely. We’re a family of introvert homebodies so don’t really go for drinks or meals very often and are used to a holiday maybe every 3 years. We run an old car between us and are planning to hold onto it for as long as possible. What I’m saying is, in our case, the house we live in is the most important investment for us so we’re happy to stretch and make other concessions in order to have what we really want. However, I do keep panicking at the thought because it’s a bigger leap than we expected to be making 🫣

Oh and yes - the mortgage was one thing but bigger house means way more things that go wrong too so the very unexpected bit was how much more we are spending on random repairs.

We did this - pushed up to the limit of what we could afford after lockdown in a smaller house with our kids. The maths for us was making sure either of us could pay the mortgage if needed (like if one of us is off work for a length time for any reason). I wouldn't go higher than that without good reason.

We went for 1/3 of our take home. Good job we had savings and investments as life has thrown us a number of curve balls. We were intending on spending those on upsizing. On the plus side our dd is alive and she may not have been were we not spending vast sums of money putting her through private school and over a grand a month on specialist care for her.

The recommendation is to spend no more than 28% of your take home pay on housing costs. So you'd be above that, and you have high childcare costs at the moment as well. Remember all the services associated with your house will go up as well: insurance, council tax, gas, electrics, water. I think this jumpis slightly too much. What could you get if you had a mortgage of £2500pcm? You do have room to increase your mortgage and I think that's more sensible long term than frittering away your money.

We bought our current house in our mid 40s and went from having about 18 months left on the mortgage to having a 20 year left but I never regret it because this house gives us so much more space which with 3 teens is really useful. But only you know how important this house will be and if you're prepared to cut back other expenses to afford it.

We decided to renovate our current house rather than move and increase mortgage. Decided for now we would rather have the extra spending money and be able to afford things like clubs and activities for DC than scale up and be more restricted money wise.

There are 2 ways to look at it.

1. Keep moving up the property ladder whilst you have the income to do so that when you need to you can sell and afford a small nice managble home in your older age and have spending money, until you have to sell it to go into care.

1. If your family isn't going to grown have a smaller home and a smaller mortgage (renovate as needed) and save and spend the money as you see fit

We had a big jump in property a few years ago. Over double the size of the house and the mortgage was just over double.

We've made it work and we love our home. If you really love the house then go for it if you are sure you can afford it.

It depends how much you have to cut back. No holidays, clothes, etc - no. Buying own- brand Tesco rather than Waitrose, yes. Think about what standard of living you want to maintain, and cost it all out, and then decide.

I think 25% of net pay is the maximum I'd want to pay on my mortgage, TBH. Over a third sounds a bit scary, and by the time you've factored in the higher council tax and running costs, your disposable income would be squeezed pretty badly.

We went from a small sub £1k to well over £3k mortgage a few years ago. It was a bit of a shock to the system once we saw the full extent of the higher utility bills and all that.
We've actually increased the monthly payments further now to shorten the term by a few years, but as a percentage of income we stayed below 25% and we have savings/shares that we could cash in if one of us lost their job.

I'd want to maintain my lifestyle so I wouldn't overstretch myself on a house personally

Definitely wouldn’t go over 30% of salaries on mortgage, even that is pushing things. But doubling a mortgage in itself happens throughout life as houses and salaries get bigger.

I wouldn’t be comfortable paying more than a third of take home but I’m cautious by nature when it comes to finances.

When it comes to having a better house vs having more spending money I think that everyone compromises, it’s just about working out where you draw that line. What is your idea of acceptable, long term budget tightening and what are your non negotiables? What really matters to you? What would you be willing to cut back on or cut out?

For me smaller house so we could overpay the mortgage . While it would have been tempting to have a bigger house, mental health issues meant that job situation changed so smaller income.

I think you need to consider the possibilities of job security and whether that high salary will last.

To be life is for living not being a slave to the bank. I would never sacrifice holidays, meals out, the fun things in life for a house. But that's just me. Best of luck with your decision

Wouldn't go above 25% of net pay and much prefer to be in the 15-20% range.

If you're not planning to have another DC then I suppose your nursery fees will come to an end soon enough.

We bought a bigger house which doubled our mortgage but we were still v v far away from maxing out affordability. Assuming you have 6mths plus of expenses in savings then that's fine.

If you feel fairly secure in jobs, then generally the advice is go for the best house you can afford.
property in the uk has overall been a sound investment and you will have a good platform to downsize from later.
we have always busted a gut to get a good house, skint for a few years but it evens out.

We have a similar take home pay and a similar current mortgage. We were toying with either a bigger house with 3500 mortgage or private school. We chose private school and another BTL, but outgoings are essentially the same. We were comfortable with this because we have no other finance payments so our total outgoings every month, incl food, are about £4,600. Meaning either of us could cover all the bills in the event of redundancy / job loss.

I think you just have to be comfortable with what you choose.

It really depends. We (early 40s) were mortgage free and then decided to double our living space and have a mortgage again so DC could grow up with sufficient space and we easily can host guests. We are now in our forever home.

We went with 2/3rds of the maximum mortgage offered to us, to ensure affordability. It is around 20-25% of our take home.

So we made the leap, but did not 'overstretch' ourselves. No kid is going to care about a great house if their parents are stressed out of their minds or working themselves into an early grave.

How secure is your work and are you insured against serious illness? Also are you likely to get salary increases in the nearish future?

We bought a much larger house but DH was a partner in a successful business which was why we were able to stretch ourselves.

We are currently moving and our buyers are definitely stretching themselves but I wonder if they have truly factored in all the costs of running a big house and think they could struggle. They have been a bloody nightmare though so I have limited worry for them.

Good luck

Asset rich - cash poor

this is not for me. Life’s for living and enjoying. I’d never be a slave to a mortgage its like a death grip

Dream house. Sakaries generally rise, property generally goes up and the more you’ve spent, the larger the impact of the % rise.

Many years ago, just starting family, second house we’d ever lived in. We spent half our monthly income on mortgage to get our dream home. Never regretted it. Really had to tighten our belts but it was totally worth it, we lived our house and didn’t mind not going out any more/ no takeaways etc. ended up staying in same home for 30 years!!!

We've moved to a bigger house that doubled the mortgage. We have a lot less disposable income now but the house is big enough for 3 teens and although the mortgage payments are high (£2.5k per month) at least we get an asset at the end of it. We also still put a lot into pensions.

We won't have a holiday abroad this year (last year we had 3) and a lot less takeaways but will still get a decent holiday in the UK. In 10 years time our outgoings will be a lot less and our disposable income will be high so for me it's worth the short term drop in disposable income.

We always spent 1/3rd of our take home on mortgage.