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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To feel worried about the cost of this purchase

49 replies

treesareyellow · 29/05/2023 20:11

We are putting in an offer on a house tomorrow. The mortgage payments will be £500 more than what we are currently paying in rent. We have been cleared by a broker to borrow well over the value of the house we’re offering on, so that’s not the issue.

We won’t be on the breadline but I’m a little worried at the thought of losing that £500 each month - a big proportion of it will be interest as todays rates are 5%. It’s 30% of our joint income, we will progress in our roles but very slowly. At the moment that £500 is our fund for holidays, days out, overnight stays, basic clothes, footwear and birthday gifts for others etc. If we buy this house we can feel secure knowing we’re homeowners but what fun is that if you have zero money after essential bills each month to actually enjoy life, never mind save/repair the house if need be

AIBU to worry or are things this tight for everyone at first?

Btw, can’t buy a smaller property as flats are few and far between in our area and we would then need to upsize soon and dont want to risk negative equity trapping us somewhere too small

OP posts:
peacelemon · 29/05/2023 20:12

It's fine you don't need holidays

Sissynova · 29/05/2023 20:16

At the moment that £500 is our fund for holidays, days out, overnight stays, basic clothes, footwear and birthday gifts for others etc. If we buy this house we can feel secure knowing we’re homeowners but what fun is that if you have zero money after essential bills each month to actually enjoy life, never mind save/repair the house if need be

No, it’s not normal to put yourself in that situation. If you have basically zero money after essential bills why on earth would you move to this house?? You cannot afford it. What’s the point if you can’t do anything enjoyable like holidays or birthday gifts, never mind not being able to afford basic clothes, shoes or repairs?
Totally stupid.

Don’t delude yourself into thinking you could afford this or even a bigger loan.

ChopSuey2 · 29/05/2023 20:17

Having £500 left over for clothes, holidays etc is quite a lot. How many of you are there? I think it's likely savings can be made in other areas to allow some fun spending. Have you done a budget?

Original poster
treesareyellow · 29/05/2023 20:17

Sissynova · 29/05/2023 20:16

At the moment that £500 is our fund for holidays, days out, overnight stays, basic clothes, footwear and birthday gifts for others etc. If we buy this house we can feel secure knowing we’re homeowners but what fun is that if you have zero money after essential bills each month to actually enjoy life, never mind save/repair the house if need be

No, it’s not normal to put yourself in that situation. If you have basically zero money after essential bills why on earth would you move to this house?? You cannot afford it. What’s the point if you can’t do anything enjoyable like holidays or birthday gifts, never mind not being able to afford basic clothes, shoes or repairs?
Totally stupid.

Don’t delude yourself into thinking you could afford this or even a bigger loan.

We’d still have circa 700/800 a month for all this, just not £1300 as we have been used to. Worried that’s not big enough. Sorry I should have been clear.

OP posts:
NewAnon · 29/05/2023 20:18

I don't know, but we're in a similar position.

We're FTB - rent is £2k pm (and has stayed the same for 11 years), mortgage will be £3.5k per month.

Which is around 30% out monthly post tax take home pay.

I tell myself we've been spending within the same limits for a couple of years while we save for the deposit to buy the house. So really it's no change, just that the money is going into our property, rather than our landlord's.

But still, it's a big step up, ditto were leaving a cheap council tax area, and will need things like building insurance (not just contents), and as we're heading out of London will probably need a second car, and will have to heat a 4 bed house, rather than a 2.5 bed flat...

Original poster
treesareyellow · 29/05/2023 20:21

NewAnon · 29/05/2023 20:18

I don't know, but we're in a similar position.

We're FTB - rent is £2k pm (and has stayed the same for 11 years), mortgage will be £3.5k per month.

Which is around 30% out monthly post tax take home pay.

I tell myself we've been spending within the same limits for a couple of years while we save for the deposit to buy the house. So really it's no change, just that the money is going into our property, rather than our landlord's.

But still, it's a big step up, ditto were leaving a cheap council tax area, and will need things like building insurance (not just contents), and as we're heading out of London will probably need a second car, and will have to heat a 4 bed house, rather than a 2.5 bed flat...

Absolutely. It feels like a scary step, doesn’t it?! It will definitely feel different for you especially because of the car, too. Sometimes you have to take the leap of faith with it as we’re same and the money we would’ve spent we have just plugged into savings, but I’m struggling with the thought that we can’t just think - yay, we’ve reached our savings goal, now with that leftover income from now on we can go make some memories - cuzzz it’s all going to the bank in interest.

OP posts:
ChopSuey2 · 29/05/2023 20:22

treesareyellow · 29/05/2023 20:17

We’d still have circa 700/800 a month for all this, just not £1300 as we have been used to. Worried that’s not big enough. Sorry I should have been clear.

Show quote history

£700-800 for essential bills or after bills? If £700 includes just bills and food, maybe you are overextending yourself. If £700 is after bills then you are more than fine. £1300 for clothes and fun is ridiculous, £500 is definitely enough unless you want trips to expensive places regularly and/or you're a huge family.

Original poster
treesareyellow · 29/05/2023 20:24

ChopSuey2 · 29/05/2023 20:22

£700-800 for essential bills or after bills? If £700 includes just bills and food, maybe you are overextending yourself. If £700 is after bills then you are more than fine. £1300 for clothes and fun is ridiculous, £500 is definitely enough unless you want trips to expensive places regularly and/or you're a huge family.

Show quote history

Yes, after. Just worried about a big car repair one month and other costs rising but I suppose everybody’s in that situation

OP posts:
Lemonfanta4 · 29/05/2023 20:27

Do you have a savings pot?

if I had decent savings it wouldn’t concern me but if that’s it I would be concerned but not enough to stop me buying the house

presuming you can cut back on other outgoings if you needed to

Sunnysidegold · 29/05/2023 20:27

Now you just need to allocate a bit for your emergency fund. I do think it can be a bit scary at the start but as you say, your earning will increase. It's just trying now to work out how you budget for the things that go wrong in a house, or for maintenance repairs and decorating.

bibbityboppityboo · 29/05/2023 20:28

@treesareyellow

You'll cut your cloth accordingly! Do you have a current savings pot as back up? £700 after bills just means you'll need to prioritise differently.

Don't forget that extra £500 is paying off your mortgage - your entire rent payment is lost at the moment, paying someone else's mortgage. Now your payment + the extra will be paying towards an asset. Think of it as long term savings if that helps?

NewAnon · 29/05/2023 20:29

I think it's because we've got into the habit of collecting money, like people collect stamps, we got used to squirrelling away money - and now the 'money collection' will be largely gone, and our ability to add more to the collection will be slowed.

It is scary - BUT I tell myself, we're very lucky, to have these choices.

Though it still feels grotesque that even with two people working, and each earning a solid salary, we still have to leave the city to get enough space for the family.

mewkins · 29/05/2023 20:33

It's annoying when people do what I'm about to do but in honesty first time buyers have been in your exact position for decades and decades. When I bought my first house everything was a stretch, holidays were off the cards as were decent cars etc and all time and money was put into doing a house up slowly.

Original poster
treesareyellow · 29/05/2023 20:34

NewAnon · 29/05/2023 20:29

I think it's because we've got into the habit of collecting money, like people collect stamps, we got used to squirrelling away money - and now the 'money collection' will be largely gone, and our ability to add more to the collection will be slowed.

It is scary - BUT I tell myself, we're very lucky, to have these choices.

Though it still feels grotesque that even with two people working, and each earning a solid salary, we still have to leave the city to get enough space for the family.

True

OP posts:
Jojobees · 29/05/2023 20:41

Have you thought about costs you won’t have paid as renters? Like buildings insurance? Also repairs/on going maintenance? Boiler goes?
But the security of not being beholden to the rental market would quash any worries for me. Nothing stopping your landlord raising rent by that £500…. At least you will be building some equity and not paying someone else’s mortgage.
Happy home owning 😀

Original poster
treesareyellow · 29/05/2023 20:44

Jojobees · 29/05/2023 20:41

Have you thought about costs you won’t have paid as renters? Like buildings insurance? Also repairs/on going maintenance? Boiler goes?
But the security of not being beholden to the rental market would quash any worries for me. Nothing stopping your landlord raising rent by that £500…. At least you will be building some equity and not paying someone else’s mortgage.
Happy home owning 😀

I have, and they scare me! End of the day, the bank still owns your house I guess until you’ve paid the last penny of the mortgage. We’re housing association and have been here a good while, we haven’t got a lifetime tenancy but they can’t review the cost of the rent for another 2 years.

OP posts:
zurala · 29/05/2023 20:45

£700 fun money is amazing! We are a family of four and don't have that. You will be fine, you're just used to having a shed load of money, and instead you'll just have a lot. You'll cope. I'd love to have that amount of money after bills.

Original poster
treesareyellow · 29/05/2023 20:47

zurala · 29/05/2023 20:45

£700 fun money is amazing! We are a family of four and don't have that. You will be fine, you're just used to having a shed load of money, and instead you'll just have a lot. You'll cope. I'd love to have that amount of money after bills.

We don’t pay nursery fees at the moment too! Sorry to dripfeed, but that would come from the 700 (P/T place)

OP posts:
kerryno · 29/05/2023 20:49

It's quite a mindshift getting ones head around interest rate rises & what that means in terms of paying so much just to service debt but what can you do.

kerryno · 29/05/2023 20:50

We're FTB - rent is £2k pm (and has stayed the same for 11 years), mortgage will be £3.5k per month.

Which is around 30% out monthly post tax take home pay.

But you'll have more than 7k left a month. I'm sure that will cover hearing bills & a second car...

kerryno · 29/05/2023 20:52

Though it still feels grotesque that even with two people working, and each earning a solid salary, we still have to leave the city to get enough space for the family.

London? How much space do you need. 3.5k mortgage will definitely get you lots of options in London.

shivawn · 29/05/2023 20:53

Your posts are very contradictory. Your OP clearly said this £500 was your non-essentials fund and that you'd be left with zero money after essentials, not even enough for house repairs or savings. Anyway it seems like now you've got £700 left for spending and saving.

Honestly for me it would be tight, £700 goes fast and there always seems to be something every month and I'm assuming that any savings will have to come out of this £700. Still, you will be okay with good budgeting and it's worth the sacrifice to become homeowners.

Original poster
treesareyellow · 29/05/2023 20:55

shivawn · 29/05/2023 20:53

Your posts are very contradictory. Your OP clearly said this £500 was your non-essentials fund and that you'd be left with zero money after essentials, not even enough for house repairs or savings. Anyway it seems like now you've got £700 left for spending and saving.

Honestly for me it would be tight, £700 goes fast and there always seems to be something every month and I'm assuming that any savings will have to come out of this £700. Still, you will be okay with good budgeting and it's worth the sacrifice to become homeowners.

You’re right I’ve not been very clear I don’t think! I meant we use that £500 that will potentially soon go on the mortgage, currently in the leftovers pot for fun and clothes etc. Not that we only have 500 for that. But 1200-500 = 700 left. Thank you :)

OP posts:
Lcb123 · 29/05/2023 20:56

I’d say it’s worth it. The mortgage payment is guaranteed not to rise during the fixed rate period whereas rent will. £700 for non essentials seems plenty

JC89 · 29/05/2023 21:07

It really depends on your situation, £700 a month after mortgage and bills sounds doable, but you need to think about what you are currently doing with the extra £500 - does it go into savings? Think what you would have to cut /reduce and how much you are prepared to do (would it mean no holidays or just fewer/cheaper/shorter holidays?). There may be unexpected costs e.g. work needing doing to the house. But it is also worth thinking of it as an investment - presumably you would have the mortgage paid off by the time you retired (when your income is going to drop!) but if you are still renting at that point you will still have that to pay. Consider that as well when you are thinking about how much you are prepared to cut now

If your budget is tight, can you get the mortgage over a longer period to reduce monthly payments? Is this something you could do when the mortgage comes up for renewal if money is tight? I expect you would have more options for this the further you are from retirement! Can you do this to reduce the required monthly payments but then overpay the mortgage (gives you the option of reducing payments again if you need to, but you would be trying to pay it off quicker to avoid paying extra interest).

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