Had an offer accepted on a house, and now I think the mortgage repayments are going to be too high. I’m terrified.

[Hfjshdhs]

We have sold our house, and had an offer accepted on another house. I didn’t think the offer would be accepted, but since it has I’m absolutely terrified that we won’t be able to afford the mortgage repayments and I’m thinking about pulling out.

The mortgage repayments are 29% of our take home pay.

We have two children and won’t have any more. They are both currently in very expensive childcare, but the oldest will go to school next year.

Until childcare costs go down things will be tight. Not too tight that we can’t pay bills, and we have savings for unexpected costs. But it feels uncomfortable after having lots of income spare. The kids can still do activities.

We would get a 5 year fixed mortgage so we know what our costs are, and in five years we should have had pay rises/promotions, and both children will be out of full time childcare. We should in theory be back to where we are now financially.

The house we made an offer on needs a lot of work. It’s liveable, but not ideal. It’s also in an absolutely ideal location, and could be absolutely amazing once we can afford to do renovations. But that won’t be for another 5 years at least.

Basically, I feel sick at the thought of moving there, not excited. My DH is also 50/50 about it.

If we don’t buy this house, it’s back to looking, and barely anything is coming up.

Any advice?

Think of the long term. We lept and did it, eventually made the changes we needed to make and love it
Think of it as a challenge to make the cheapest wholesome foods you can. Childcare will end even. Everyone is giving money saving tips at the moment. As a side note we wouldn't be able to afford to rent the cheapest house round here now but we've ended up with something much better for us that's s ours

Would it help to separate your feelings about the house from your feelings about the money? If money was no object, would you feel excited about moving to this house?

If yes, (and you can afford it, even with a tight year or two while the kids are in nursery and you're doing the place up) then it's the right house for you. If you still wouldn't want to live there then you need to re-think.

As PPs have said, it makes a difference if this is supposed to be your forever home vs one you'll leave after 5 years or so.

We did similar when we moved to our current house, and it was definitely worth it. 8 years and 2 remortgages later our mortgage has reduced by 24%, our wages have increased and our kids have left childcare so we are a lot more comfortable.
What’s the rate like for a 2 year fix? We fixed for 2 years initially as we knew we would be in a better financial position in 2 years, plus the LTV had reduced so we could get a better rate.

Two year fixed rates are 1.09%, which is crazy.

It is absolutely our forever home. The potential it has is amazing. If money were no object then we would be so so excited.

We are currently on the cusp of catchments for a good primary. If it’s a weird year then we will be put in a bad school which would be hard for us to get to. It’s a big driving force behind the decision to move.

The only thing that has stood out for me is that it will need renovations. Are you happy to postpone these for quite a while and then move any spare money straight into a few years of renovations?

I think 30% is the average although I understand your concerns. It is not ideal but would an interest only mortgage just for now and to get you in be lower? I did this for the first two years.

The trouble is interest rates will increase.