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Original poster

Should we stretch ourselves with mortgage for perfect home?

25 replies

Tiggerslovetobounce · 12/08/2019 21:24

Has anyone stretched themselves financially for their perfect home and not regretted it?

We need to decide how much to offer on a lovely place in a great area that ticks all our boxes. If we go full asking price which I think we'll have to do it will mean our mortgage doubles (it's currently very low) and we won't have very much disposable income. At the moment we live quite comfortably and don't worry about money at all. We don't live extravagently but we also don't worry about paying bills etc.
But we will get a lovely home for our family and can move away from our current home that has made everyone unhappy living in.

Should we do it and just live very carefully?

What are your positive stories about how it's paid off for you, or not.

OP posts:

newmobile · 12/08/2019 21:31

We did it. Was mortgage free and moved to our dream house so now back to square one financially. No regrets though as we love the location and all of the space we have gained. Need to think before we spend now though so less meals out and outlet shopping for us only now.

BigSandyBalls2015 · 12/08/2019 21:34

No brainier if you’re unhappy where you are.

Wellhellojonsnow · 12/08/2019 21:36

Can you borrow enough and checked with an AIP? Lenders are currently pretty strict so if they are happy to lend you then it shouldn’t be that bad.

We have recently moved to a much larger house with a much bigger mortgage. I was a bit eeek on completion but do not regret it one bit now. We spend such a large proportion of our time indoors in the UK climate it’s lovely to have a dream home to enjoy!

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General money

LemonAddict · 12/08/2019 21:37

We’ve done it with every house.

Couple of houses ago, we literally spent 12 months after we moved in living on Asda smart price food and food from the fruit trees in the garden (we had cherries, plums, apples and pears) until DH got a payrise and I got a new job.

And then every time we’ve sold to move up the ladder we’ve made a really good capital gain.

PerfectPeony2 · 12/08/2019 21:41

I personally wouldn’t. We thought about it but I would hate to have to worry about money. I grew up with a mother who was obsessed with how much everything costed because we just didn’t have very much money.

Although affordability rates are strict, they are likely to go up in a few years so there’s always that chance that after your deal ends (say 5 year fixed). Your payment will be even higher. But if you intend career progression in that time then it wouldn’t matter so much.

I love the idea of a big perfect house but once reality sets in I think it’s better to wait for the right time when you can comfortably afford it.

Original poster

Tiggerslovetobounce · 12/08/2019 21:44

Yes we'd be borrowing from a high street lender and we've done all the sums for affordability based on all our outgoings. At the moment I save a lot every month and I won't be able to do that going forward which is strange for me as I've always been a saver not a spender.

There are other cheaper properties we could offer on but none of them are as nice. New one has a huge garden which is one of the main drivers for the move.

Also we won't have the money to be able to fit new kitchen and bathroom but there will be space for kids to play and make noise. The other stuff is just aesthetics right? And it's liveable as it is. I just can't afford my dream bifold patio doors.....

OP posts:

Cohle · 12/08/2019 22:00

We did.

In some ways I don't regret it. Many years on we've always managed to pay the mortgage just fine and we've both now earn more so that the payments are totally comfortable. I love our house and it's increased massively in value.

However, it did weigh on my mind a lot in the beginning and our outgoings did inform my career choices in some ways.

TowelNumber42 · 12/08/2019 22:04

Depends. We hated the feeling that we were screwed if one of us were out of work for any length of time. The lack of a fuck off fund affected us more than we thought it would.

JoJoSM2 · 12/08/2019 22:08

I only borrowed the max amount as a ftb to get onto the property ladder. With the subsequent properties, I never even got close to borrowing the max amount. I'd hate the stress if interest rates went up etc.

To make the right decision, I'd factor in whether your earnings or expenses are likely to change, whether you'll pay the place off by retirement etc and make sure you can afford repayment when interest rates are 5%

ShirleyPhallus · 12/08/2019 22:08

We are in the same position now

My reasoning is that we both have great employment prospects in buoyant areas, and if we didn’t stretch ourselves now then we’d be looking for a new house in 3-5 years and so pointless to pay stamp duty once now then again in such a short space of time

applepieicecream · 12/08/2019 22:10

Remember that if you can afford the repayments you’re essentially saving. When you eventually downsize your pot of money is likely to far exceed what you could have saved

neweeeyebrows · 12/08/2019 22:10

We did it last year. Had a fairly small mortgage but did our sums and decided to go for it.

We don’t regret it one bit - we have more space and live in a much nicer area, a bit further out of the city. It’s so nice to see the stars at night .

We’re in a new build so don’t have to worry about DIY for a few years. We also increased our life and critical illness insurance to cover either of us being out of work if the worst happened.

Go for it!

PerfectPeony2 · 12/08/2019 22:13

Also don’t forget you will have to increase life insurance/ income protection, utility bills/ council tax/ home insurance will all be higher (potentially). I’m sure you’ve factored this in already but it’s just stuff that could add to the stress!

PaintingOwls · 12/08/2019 22:17

It really depends on your risk appetite. Mine is super low and I wouldn't do it, but clearly lots of people would.

Abstractedobstructed · 12/08/2019 22:19

We always bought very much within our means.
My MIL told us that one of the reasons she and FIL split up when dh was 6 was that FIL insisted on the biggest house on the largest mortgage they could get. Then when mortgage rates went up (70s) they could not afford to go out or buy anything and the stress of the money destroyed their relationship.

What if mortgage interest rates go up? Where would you be then?

I would always go for a more modest home with disposable income. We have climbed the property ladder fine and have a big house with enough bedrooms, but compromised on the driveway and being detached. We are happy and been mortgage free since our mid 40s.

NoSquirrels · 12/08/2019 22:25

At the moment I save a lot every month and I won't be able to do that going forward which is strange for me as I've always been a saver not a spender.

The mortgage is a form of long-term saving for your future. So from that perspective it’s fine.

But you really need to fine-tooth-comb your budgets (based on a larger house and increased costs) and go from there. Job stability etc also important.

We did the bigger house. Every now and then I wish we’d gone for a smaller mortgage/freedom! But mostly I enjoy the space and we’ll appreciate it long-term as the DC grow.

applepieicecream · 12/08/2019 22:30

We did the bigger house. Every now and then I wish we’d gone for a smaller mortgage/freedom! But mostly I enjoy the space and we’ll appreciate it long-term as the DC grow.

Agree, we’ve never done the absolutely huge mortgage thing but have a mortgage which would send many MN’ers insane with worry. We can afford the repayments but what’s most satisfying is knowing that even if the proverbial hits the fan our equity means that we can easily downsize and live very comfortably with the equity.

blue25 · 12/08/2019 22:35

It would make me very nervous TBH. We're almost mortgage free and there's no way I want to take a mortgage on again, especially a large one.

Think about how you'd manage if one of you loses your job, can't work due to ill health. It may also mean you're pushing back retirement etc.

For me, experiences are much more important to my family than how big our house is.

JoJoSM2 · 12/08/2019 22:41

Remember that if you can afford the repayments you’re essentially saving. When you eventually downsize your pot of money is likely to far exceed what you could have saved

That's debatable. Mortgages are debt with a lot of interest payable. Large properties also cost more in maintenance and bills. On the other hand, saving into a pension is very tax efficient and the pot builds from day 1. So you could get lucky if the house rises exponentially in value but under most circumstances, it probably won't be the best investment strategy.

Ididntwantthis · 12/08/2019 22:42

I did this, years ago. It was part of the reason my marriage failed. Too much worry, long hours working, and tbh the DC we said we did it for couldn't give a whatsit, then or now. I wish we'd stayed in our ordinary 3 bed terrace.

PowerslidePanda · 12/08/2019 22:44

If we didn’t stretch ourselves now then we’d be looking for a new house in 3-5 years and so pointless to pay stamp duty once now then again in such a short space of time

This. I'm a very risk-averse person, but am currently selling and upsizing for the first time and can't believe how much the sheer process of it is going to cost (stamp duty + estate agent fees + solicitor fees + movers costs, etc) - that's money down the drain, whereas money towards the mortgage is an investment. Well worth a bit of a financial stretch if it means it'll be longer before you have to move again.

lauryloo · 12/08/2019 22:55

I wouldn't

You just don't know what life will throw at you x but I'm speaking as someone who downsized their self build as I had to give up work

NoSquirrels · 13/08/2019 10:21

Well worth a bit of a financial stretch if it means it'll be longer before you have to move again.

This was also in our planning - we chose a house based on being there through secondary school and teen years and beyond, so factored in schools, transport links, etc. No plans to move, unless we need to downsize because life throws a curveball. And if it does, we'd be able to afford a smaller house outright.

Bodicea · 13/08/2019 12:06

It’s better to stretch a bit now than have to upsize again later. The sheer cost of moving these days makes it not worth it. I wish we had stretched ourselves a bit more as now as we can’t really afford the money or stress to upsize again, for the sake of an extra bedroom, but more land.

abombinitaly · 13/08/2019 18:08

Never. Find a lovely home and enjoy life too

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