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!

You're 45 and mortgage free. In 10 years your kids will be off the nest and won't care how titchy their bedrooms are.

That's a crazy age to take on a 35 yr mortgage, a millstone round your necks when you cannot control where health , or the economy, will take you.

It sounds as though you are wanting to make a big financial leap without it affecting your current lifestyle which I think is completely unrealistic, most people have to make sacrifices to buy a much bigger house and are happy not to have expensive holidays, you really don’t need to spend nearly £10,000 a year on holidays and day trips, you have to cut your cloth and as for having a mortgage until you are nearly 80……….

Just do it and stop worrying about paying the mortgage off. You can downsize when the kids leave home.

It's miserable living in a house that is too small. I know lots of people don't have a choice but if you do, more space is nice. I would reduce to one holiday a year though.

We were in a similar situation a few years ago and we moved. I am also very risk averse. We have a lot of equity in the house and so we pay interest only. We save what would go towards a repayment mortgage but it means that pot can be used in an emergency without having to remortgage. I agree with your husband that it's now or never.

No way I'd take on a 35-year mortgage in my mid-40s, and I am surprised the bank will allow it. Living mortgage free is incredible, I would live in the smaller space and have a tonne of spare cash / savings for retirement!

A 260k mortgage on your income isn't risky, it's what around 3 x your income.

Granted this is MNs & you will get lots of we earn 500k but only borrowed 50k. I don't understand the 35 yr stretch though but you have a low LTV so can always downsize before you pay off the mortgage.

I think I'd go for it, you have plenty of scope to reduce outgoings by cutting back on holidays. Extra space for growing DCs is great if possible.

We have a very similar income and our mortgage payment is exactly the same. We are very comfortable and it has honestly never occurred to me to worry about a payment at that level.

You have so much flex in your budget it is unreal (we spend half of what you do on holidays, Christmas, day trips and have a perfectly normal, comfortable life).

In your position I would go for it, but have half an eye to overpaying as and when you get any extra money in, or at least apportion some of that to overpayments.

I honestly don’t get all the people saying ‘just go for it’

Where is the extra money going to come from to over pay the mortgage?

And without some serious injection of cash from somewhere to over pay and clear the mortgage in less than 35 years, this budget needs to remain constant until they are 80!

That is insane!

Blimey I wish I had a 1000 for shopping each month. My family is 4 kids and 2 adults 1 dog 2 cats and our big delivery monthly shop is around 150 with 70 left for top up milk bread

Are your kids likely to go to Uni? As things stand they would only qualify for the bare minimum maintenance loan so you may have to support them financially.
Are you redundancy proof?

We didn’t go for the big house, it means that we will both be retired by 57. It also means not having to downsize nor ever having big bills. We are in a 3 bed semi.

It’s also very true about your children leaving home in around a decade. Maybe consider a really decent garden office.

I am not knackered totally but every decade means a bit of a slowing down even if in good health. I could hill walk 20 miles when I was 26 at 56 I can do 10 miles.

There's 2 schools of thought with mortgages. Neither are 'wrong' - you either play it safe or take a much bigger risk for bigger returns. The more space, the less likely you are to need to move again and the more expensive the house the more likely to hold/gain value (yes, even in a falling market).

You don't need a cash injection if you can sit on the property for a decade or two, but they are only in their 40s, so likely to continue upping income for some time yet.

Risk averse people won't do what OP is doing because life can throw a curveball: divorce/redundancy/illness etc.

DH and I did exactly the risky (or riskier approach) option (for ref, OP, we didn't have the holidays for a year or two to replenish the savings pot) but it paid off.

Stretching yourselves in your forties for security when you are older is scary/risky and might well mean a few tight years, but certainly not 'insane'.

I honestly don’t get all the people saying ‘just go for it’

Where is the extra money going to come from to over pay the mortgage?

Many look at mortgages as a form
of renting but just from the bank & this way they live in the house they want & hopefully gain some equity. They already have 350k of equity so it's a risk but not insane by any stretch.

I get why people may choose to stretch themselves for their working life but not until you are both 80!

It really is insane to do that, especially when the OP states they don’t expect any pay rises in the foreseeable future.

You are a prudent budgeteer.

You have plenty of room to manoeuvre.

What @dodeca said.

You worry too much.

& obviously the op can cut some spending if she wants.

I get why people may choose to stretch themselves for their working life but not until you are both 80!

That's not really the issue though. My aunt had an interest only mortgage for decades & then only recently switched to repayment. She's downsized now in her 70s, she had more than 1m in equity...

The OP spends over 10k on holidays, days out & eating out. There is room in the budget for overpaying!

You've clearly gone to far with the price of the new house given your modest earnings. Its a risky move and the lack of savings per year (which is tiby) could leave you vulnerable to emergencies needing £££. I would look at houses more in budget so that you are secure financially.

But isn’t the point of this post that they don’t plan to use that money to overpay?

I’m still intrigued to know which lender would lend up to 80 without a pretty massive and secure pension / investment portfolio anyway?

@ReliantRobyn how is a 260k mortgage on an income of 80/90k going to far?

Plus they have 30k in savings

@Butterflyfluff whereas the money for overpaymets going to come from? How about from the enormous holiday fund? Or the takeaway fund?

@ruminator8 I'm pretty cautious but Id look to move if I were you. 2 people working from home require some dedicated office space.

@Butterflyfluff but they still have that option. likewise the 30k in savings is an option.

I would be inclined to go for it too. As a previous poster noted, It's miserable living in a house that is too small- esp. when you are both wfh too so are there for most of your time.

If things got hard and you needed to, you could always reduce the amount spent on both takeaways and your weekly shop (no more treats from Sainsbury's etc), as well as cut back on holidays/ Christmas etc and tell the kids put trousers on rather than sitting about in shorts in the winter!!

Not ideal but I think it's worth it to allow you to have an office space at home etc. It's a scary world out there so if DC have then got a bigger bedroom/ more living space as they get older then they can have their friends over etc and you won't be worrying about them walking the streets so much.

House prices probably will fall a little in the short term but hopefully it won't be by much due to demand V supply of housing in the U.K.

I think you've proved that you can afford to move. But is it wise in the current climate? Not sure.

As each DC had their own room & they are still young I personally would wait a while & sink the extra into savings.