To feel so anxious and unsure about this house move? Does this budget look ok?

[ruminator8]

Long post - thank you to anyone who reads it all!

Background - I am an anxious person who overthinks, worries and ruminates on so many things. Sometimes when I share my worries with others even my DP, they look at me as though I'm mad.

We have been trying to move for more space for over 2 years on and off. Our current 3 bed semi feels to small to be comfortable for the next decade as our kids become teens / young adults and we aren't able to extend to make the house as we want it duo to plot size. We are wanting to move to a bigger 4 bed. Various hitches and setbacks along the way, all related to the housing market or my uncertainty about houses we viewed. We own our home outright, having recently cleared the last of the mortgage of £180,000 that we took out 10 years ago. I've worked part time for the past 10 years since having my eldest. We now have 2 kids, both primary age. I now earn more FTE and work more hours than I have ever done in the past 10 years. My partner earns over £60k pa gross working full time and gets a work car. Our total net after tax is monthly income is £5447. We are both mid 40s. We have no other debts beyond a mortgage (we clear our credit card balance each and only use it to accure cashback). Neither of us expect a promotion in the next few years and we generally get modest annual pay rises and no bonuses. We both have private life insurance, partner gets death in service cover through his work, good sick pay, own job ill health retirement cover and has a good pension he can access at age 60. I have 5 years of critical illness cover beyond the occupational sick pay term in my job and an occupational pension (and a couple of other pensions from previous jobs, all defined contribution schemes so nothing amazing.) I run my own car which is 11 years old.

We have had an offer accepted on a great property at the upper end of our comfortable range at £610k. To make the monthly payment affordable we've applied for a 35 year mortgage on a 5 year fix initially. Total amount we're borrowing is £260k. (We would plan to pay it off sooner as we did with the last mortgage we had which was initially a 25 year term but which we paid off in 10 years.) We will be keeping £30k back in savings a s an emergency fund but will need to dip into this if my car dies soon (amount ?) and also for a few furniture items for the new house - no more than about £3-4k.

I am an anxious person by nature and am more risk averse than most. I grew up in a family that struggled with money and parents who worried about it a lot and refused to have any debt beyond a mortgage. I am riddled with anxiety about this move on so many levels.

• we are buying at the top of the market it seems as house price falls are predicted and while these don't hit all areas and houses the same way, I can't help but worry.
• we are fixing for 5 years for certainty but at a high rate (5.39%)
• we are potentially entering time when kids get more expensive (secondary school / teens) re: food, clothing, general expenses, even if childcare is not such a major expense anymore. There are secondary school buses, uniform, trips etc to plan and pay for and just the general stuff that teens want I guess plus birthdays and Christmas.
• we are not extravagant in terms of the latest brands / tech etc
• we do like 1-2 holidays abroad each year (nothing fancy, approx £3k a week) and a couple of UK weekends / short breaks which maybe cost another £1k total.
• our 2 kids do a lot of extracurricular activities atm - approx £75 worth a month each, with related costs for some of these as and when the need arises - e.g. a new bike / gum shield / kit depending on the sport.
• partner and I don't socialise loads and aren't big drinkers. We have maybe 1 night out a month each (meal with friends) and 1 date night out (meal, drinks, cinema) about once every 6-8 weeks. As a family we tend to have meals out on birthdays or once every school holiday.
• I have a cheap gym membership at £25 a month and partner does his own training so only really spends on kit and occasional race fees.
• Mainly food shop at Aldi / Lidl with the odd treat smaller shop from M&S or Sainsburys now and then.

We have budgeted and have factored in higher energy and insurance costs for the new, larger house. The house needs no immediate work as is in a great state at the moment and has been renovated by the vendors over the past few years.

We have a budget as follow for the new house:

Mortgage £1650 per month

Outgoings (non-mortgage) per month

energy 250
home insurance 40
water 100
life insurance 50
council tax 203
car tax 12.5
mot / service 15
car insurance 25
tv licence 13.25
sky tv / braod band 62
mobile phone 26
amazon 8
car petrol 150
childcare 100
school lunches 26
boiler service 6.25

(Childcre includes after school care in term time and school holiday clubs averaged across 12 months)

Leisure spend per month for all 4 of us:

football 30
rugby 12
gymnastics 47.5
swimming 28
karate 23
cricket 10
gym 25

Groceries / household goods spend per month: £1000

The total leftover after all outgoings above is £1451.5 per month / £17418 per year and have allocated this as follows for now (I think we can reduce holidays and move more to clothes / shoes / haircuts and savings)

holiday 7500
christmas 2000
birthdays 1500
day trip 2000
savings 1418
meals / take aways 2000
clothes, shoes, haircuts etc 1000

DP feels if we don't move now we never will as I always find fault with potential houses and getting a mortgage will only get harder as we get older. My age at my next birthday already means not all lenders will lend us the amount we need over more than 25 years but we are lucky to have found one high street lender who will, hence our current deal.

Does this all sound reasonable ? Am I being ridiculous in being so anxious about it all? Sleepless nights and feeling sick etc. I think part of it is the whole way house buying goes and feeling we're paying too much / moving at a bad time. And part of it is my general anxiety. Help!

I personally wouldn't. We earn a bit more and I'd be mortified only saving £1418 a year on salaries like that. We save that a month and then dip in to as required.

Out of £5447 a month you're only planning on saving £118 a month? I'd find that risky.

You dont need to move
Kids have a bedroom each
You just want to
Which is fine . Up to you really. You have 7500 annually for holiday which can be dropped.

When your kids have a bedroom each already, what's the big deal?

Out of that £17000/year remainder, I would look first and foremost at saving at least £5000 a year, and budget the rest accordingly.

You seem to have budgeted generous round numbers for all the other items, then left savings as the odds and sods left.

It should be the other way around.

Bills.
Savings.
Fun money.

Sorry I stopped reading at, ‘nothing fancy, just 3k a week’

You can afford the house. You won’t be on the breadline. You might find you have to make some cutbacks in your lifestyle but probably not from what you’re saying

You've done extremely well to have paid off your previous mortgage at this point, is there a compromise here where you can move to a bigger house but not have to take out such a long-term mortgage? I guess it's about what you want to prioritise; it's great to be mortgage free but that's not much good if you get annoyed by your lack of space every day. Seems like you can reduce holiday and Christmas/birthday costs if needed, these all seem quite high.

Personally I wouldn't. We have a 270k mortgage, with 20 years left on it, similar age but double the income and it feels like we are on the edge of being comfortable TBH. The older I get the more I want to save just in case. A 35 year term is far too much OP, unless you're 20 when you start.

Sorry its not what you want to hear but do you really want that level of mortgage foe the next 35 years? (Also, remember rates could still go up as well as down)

This is my worry, the savings. We have previously saved to overpay the mortgage which clearly worked out. We will have £30k still saved after the move, give or take, but I want to be able to add to it.

Bedrooms, 1 each yes, but we both WFH and have no office space atm. Also can't imagine one of my kids in a 6ftx7ft box room until they leave home, hence why we want to move.

Our joint take home is similar and our mortgage is the same. Your bills are incredibly high - do you have a water meter? Our water is about £20 a month, energy £50 a month over the summer. There's a lot you could cut back on, so it's really deciding if you're willing to make those cuts to ensure you can afford the new house.

I probably would. Your rate is quite high and, I’d hope, you would manage to get 1% lower in 5 years. And you’d be borrowing on less.

I would look at how you could increase amount you’re saving. But I would also look to getting a great savings account- you can easily be making 5% on the 30k at the moment, which is not to be sniffed at!

Yoi could just ditch one holiday a year whether it’s an abroad or staycation. That will add another 2k a year to the savings pot. And I reckon, if you were more careful, you could shave 200/m off the food shop. 200/week should be fine!

You don't need £6k of holidays a year, £1000 a month on groceries is a lot. You could make savings. But I wouldn't do all of this so my child wasn't in a 6ft 7ft box room, my child pretty much is in a box room and more than happy with the space saving ways we have set this up.

I have 1 of mine in this size room who will be until they move out , my dh had a room the same size til he moved out . It really isn't that important to have a big room it's a space of their own which some kids never have .

Our take home is similar, and our outgoings are pretty similar too. We also go on x2 holidays per year (1x sun, 1x ski at a similar cost to yours) Our mortgage is £1265 per month and whilst things are 'ok' it's not as comfortable as I'd like. I wouldn't like to have a mortgage much higher.

So I would move, it’s needed will get you a better lifestyle, and cut back on holidays, why do you need two abroad a year? That’s£4500 right there, do you actually need todo the day trips? As the kids grow older surely they want to spend time with friends. Cut back on meals/takeaways if you want to save more.

I would relook at everything and cut back where you can to add to savings

I'm reading all the comments with interest.

Especially useful to hear those with similar situations.

We want to move not just for a bigger bedroom but for additional living space as the kids get older - we have no separate living space atm and their rooms are small to not as usable for hanging out with friends as they get older.

If we stay put we will have so much disposable income. We can save lots of course but DP says to what end? Save yes, but what will we be saving for?

We have no option to spend money on renovations and extensions here as what can be done has already been done iyswim.

I guess I would happier with a house costing £550k max and a cheaper mortgage with it. But DP thinks it's now or never.

It feels like after looking for so long we really pushed the budget to secure the house especially as it needs no work and now I feel we may have gone a bit too far. ...

Have I read this right?

You're both mid 40’s and taking out a 35 Year mortgage?

i.e you’ll be paying until you are nearly 80?

If correct I’m surprised you can even borrow that but you’d be crazy to do so.

You are not buying at the top of the market. It's a buyer's market now. My house was valued at £515,000 a year ago. Just sold for £435,000. We are downsizing so we have made a very low offer on our purchase.

Did you offer low on this house or go for full asking? Most vendors are reducing their prices and then taking low offers. Perhaps you should review what you are paying for the house. If you could have got it for a lot less then your outgoings would be reduced.

Some of your outgoings seem very low. I own a £700k house with £100k of contents insurance and my monthly house insurance premium is over £100. Likewise my life insurance is £240 though this does include critical illness. Have you priced everything up for the newer larger house re utilities?

You’ll be fine. Your DH is right. You’re fixing your costs for certainty. You don’t need to renovate. You will have £30K in the bank. You can just stop going on holiday if you have a year that means an unexpected expense. If you’re not moving again for a long while, the ‘top of the market’ is neither here nor there.

You’re clearly good with money and have a handle on costs. It’s confronting to pay more than you are used to but this sounds like a good move for the long-term. Take a deep breath!

How will you afford to overpay the mortgage with no wiggle room? A grand a month on what food, toiletries and cleaning products? That is a hell of a lot of money. I assume the £100 for childcare will stop in 5 or so years. It is really a matter of what your priorities are and whether the house is worth reducing your lifestyle for - a 7.5k holiday a year isn't necessary but may be to you and more valuable to you as a family than a house. Answer is you can't have it all without some cut backs. FWIW I have just taken on a bigger mortgage at 46 and will plan to repay it over 10-12 years and I am having to sacrifice things like holidays but then i am not fussed at all about them so it is an easy win for me - I love my house and it is top of my priority list.

Regarding savings - what would you be saving for? You have your emergency savings already and you don’t need to save for the next house. You probably do need to allocate money to overpay the mortgage due to its length. But what about your pensions, how good are they and do you need to plough more money into them now you’re older?

I’d personally take the bigger house over those holiday costs. Especially as it can be hit and miss whether teenagers actually get the most out of holidays. If you want the space (which I completely understand) there may be some compromises.

You sound very savvy and have thought about every eventuality so I think you could do this. However I do find it surprising that someone so anxious and financially aware is choosing to save effectively loose change after relatively extravagant discretionary spending in other areas. I wouldn’t do it on the budget you’ve set out - but it would do it with a re-jigged budget involving saving/overpaying the mortgage first after bills, before spending less on holidays etc.

As a PP says, saving is another bill to pay BEFORE the discretionary spending comes in, not something you do with any leftovers.

You sound like you are great with budgeting and understanding where your money is going.
People saying that you don't need two holiday etc but if it's what you enjoy then you shouldn't have to cut back on that. Especially when your own social outgoings seem low.
To go from mortgage free to a big over 1/5 of your monthly income seems quite a jump for me. I don't think I could handle it.
What about looking somewhere is the £350k £400k range so you have a great loan to value that has potential.
You mentioned you couldn't extend your current property so you can't be massively put off by it.
We've just renovated and it has cost more than we would have liked due to the climate but the outcome is amazing and it's added a lot of equity to the property.
You've got great credit, a decent fall back fund and your children don't seem to be tots so it's not the worst time to do it.