To take on a mortgage in the middle of a cost of living crisis?

[MarianneVos]

Current situation: 3DC under 4 years old (so none in school yet), small 3 bed semi. We're tight for space: DH and I both WFH two or three days a week with desks in bedrooms as no other space, pram has to live folded up in dining room so barely space to get round table, tiny kitchen (no space for dishwasher/tumble dryer), one bedroom is box room, only one toilet in bathroom upstairs etc. Location nice countryside but a bit isolated, country roads often with no pavements, would end up being taxi drivers to DC when older, have to drive to office. But it is liveable although frustrating.

Potential move a few miles away: 4 bed house with home office spaces downstairs, 4 toilets (one downstairs), 3 bathrooms, decent sized kitchen, playroom, utility room, cloakroom, big hall that could leave pram in. Pretty much dream home and location except for garden which is small, but we have discovered we are too lazy for garden maintenance and couldn't afford this size of house in this location with a bigger garden. Walking distance to centre of large town, great bus service, cycling distance to my office, big housing estate so safe roads for walking/cycling, near parks. We currently have a large amount of savings.

Currently we're mortgage free. New house would involve £100k mortgage, which is less than 2x either of our single gross salaries. 25 yr mortgage fixed for 5 years is 20% of my take home, or 15% of DH take home (IE 8% of joint take home). Hard to say how secure our jobs are, location means we'd have a good choice of employers though. Current childcare costs are very high but will only go down as DC start school. We'd have a small cushion of savings (about three months of take home) but everything else is going towards the house.

YABU: you should stay put to have the extra security of being mortgage free with decent savings in cost of living crisis
YANBU: it's worth the extra risk of a smallish mortgage and using savings to get a forever home that would be much more ideal for the family

I'm feeling pretty risk averse in this climate now.

I have been looking to move for a while, but nothing coming in that I want in my price bracket. But now I'm not sure I'd buy even if I found something.

HOWEVER, in your situation I'd be jumping at that!! My ONLY hesitation would be living on an estate, after living where you are now. Everyone can be quite crammed in, noise can travel, parking can be a nightmare.

oh and one other would be the garden, but if you're happy with a small garden & parks nearby, that's your call, BUT you can't just Chuck the kids out to go to the park until there much older, whereas they could play in a decent size garden.

financially though, I'd have ZERO hesitation in your situation. I'd look at fixing for 10 years.

BG told me I can take my fixed tariff to a new house. Yes, it'll cost more if it's bigger still if I heat the whole house, but the rate will stay the same.

8/15/20 % of income is tiny. I wouldn't be at all concerned financially.

I was ready to say no, but based on the size of the mortgage and the obvious huge benefits I would. Try to get a good fix for 5+ years, it doesn't sound like you'll have any trouble paying it.

We did that when DC2 was born about 7 years ago. We were very risk adverse and we were mortgage free. But we took the plunge to move to a bigger house and so glad we did. If you keep your jobs, with such a small multiplier, you can be looking at mortgage free again fairly soon. We saved up for a extension too and extended to add WFH space. Go for it. It’s miserable when your house is too small. The kids will need a lot more space once they get older.

Gosh go for it at 8% of earnings. Think about quality of life too!

Those numbers are manageable. Even if property prices dip you will be fine and you are likely to live there for years.

Go for it.

I think you'd be nuts not to make this move. Sounds like a no-brainer to me.

I can see absolutely no downsides to this whatsoever.

House prices may fall.
Job instability may increase.

But your 3 DC will definitely get bigger. Move to the size of house your family needs.

Complete no brainer, get the mortgage.

The big savings are what's enabling the small mortgage, so they'll all go into the house, we'll just have three months of take home left in savings and these may need to be spent on stuff going wrong with the house (survey has thrown up a few issues)! Going from mortgage free + lots of savings to a mortgage and hardly and savings feels like a big leap even though we're obviously getting something good out of it.

I think I've gone into a bit of an anxiety spiral, I'm trying to avoid the news but I keep seeing things on FB and on here and then I start panicking about what might happen. The posts here are helping to keep me a bit more rational though!

Not sure if my post was clear, and not drip feeding but as others have queried, the figures are firm as we're SSTC on our house, offer accepted and survey etc done on house we're buying, mortgage sorted (fixed for 5 years although now I'm thinking we should have done ten!).

Yes, the small garden is a slight concern, although it's more usable/safe than our current very large one which we struggle to maintain properly!

I'm also a bit unsure about moving from a location where we're not overlooked at all, have fields behind our house etc to an estate where everyone's much closer together. I think overall the pros outweigh these concerns and we can't afford a bigger plot and I think the extra indoor space is a lot more valuable for how we live (difficult to tell if this will change as DC get older but hopefully not).

Parking shouldn't be an issue as there's a drive.

The new house will cost more in utility bills as it's almost twice the size, but the EPC is B compared to D here so hopefully won't be double the cost.

Our figures are slightly different but we're looking at doing something similar. I go back and forth as to whether it's a good idea when our current place is liveable but I think we will take the plunge.

Yep less than 1x joint salary.

'What's the point in living the way you are?' has really resonated with me. I think overall, if I can get rid of my anxiety about the cost of living stuff, I need to just focus on the move making us all a lot happier.

Thanks for all the positive posts of encouragement, I'm going to keep re-reading every time I have a wobble about things now.

This.

It's a no-brainer in my view, I would definitely do it. We moved last year and upped our mortgage so things are a bit tighter financially but the extra space for our family is worth it a thousand times over. Especially as the DC grow and want their own space a bit more. The other benefit is if you're staying at home and not spending money due to the cost of living crisis it's a lot nicer to have a bigger house to spread out in! I don't think I realised the low level stress our old (tiny) house was causing me on a daily basis until we moved somewhere bigger and all had more space to either be together or be apart from one another and not under each others' feet. Do it.

I would definitely do it!
However would probably look at getting a slightly bigger mortgage (repayments shouldn't be significantly more if you borrow even £10k more but an extra £10k in savings would feel very secure)

I think low level stress is exactly right.

Unfortunately the mortgage offer has been issued and we've signed all the documents so I think it's too late to change the amount. I agree though and had been thinking we should have asked for a bit more to have a bigger savings cushion.