To think we could manage a £2200 mortgage payment

[Dyr]

on a take home pay of £4k.
After purchasing the house we would have £40k - £50k left in savings / investments.
The repayments would be about £2.2k per month but our combined take home would be £4k, and due to the jobs we are in its unlikely to increase. late 30s/early40s with 2 kids (primary school age)

I'm afraid you can't afford the house you have your eye on.

Think of it this way: you've dodged a bullet. That house you want badly enough to consider this, would end up being a millstone around your neck. You'd regret the day you set eyes on it.

Leave it be. Better to have peace of mind in a home that's "fine", than sleepless nights over homelessness in a house that you once thought was your dream house.

No way, that would be insanely tight and you’re one unforeseen incident away from financial disaster. Ours is 2200, on a monthly take home amount of much much more than you, and I wouldn’t feel comfortable increasing it.

£63 left over a month but with £50k in savings ‘for a rainy day’.
You have no financial sense.

No I think that's too tight. More than 50% of your take home is risky in my view.

So when food costs continue to rise, when clothing prices continue to rise, costs of everything else goes up, you're going to be in a very sticky situation indeed.

I have no idea at all how you'd get approved for a mortgage that would leave things so incredibly tight.

That's insanity. We bring in similar and until a payrise in a couple of months we will be finding the new mortgage of £750 a pinch. We don't live a lavish lifestyle and only have childcare costs for the school holidays.

If you have budgeted and only have £63 left after your outgoings then what happens if you want to go out for dinner one evening? That's gone straight away.

I'm sure it's doable if you live very frugally but that's miserable. I actually had a conversation with my husband then other day about never moving to a bigger house unless we get some serious payrises because I don't want to cut back on enjoying life just to fund a house, that was based on repayments of £1500 a month. A nice house is amazing but if you have to scrimp to afford it it's not worth it.

That a rather, um, unusual definition of 'struggling'.

You can't be serious.

We are struggling with ours at the moment as we have 2 high outgoings that will end - high childcare (1 year left) and elderly horse (maybe 5 years if that). In the near future we will have £1500 a month reduction in outgoings from that.

So in our case we are hobbling through some difficult years in our dream home because we know circumstances will change soon. Also I have a BTL which if it all went tits up I could cash in sooner than planned which would radically reduce and potentially pay off the mortgage. So we are taking some risk and have nothing left over after bills but it’s carefully considered. I wouldn’t do it if there was no way to increase income or reduce outgoings.

Add it all up and it's the entire salary nearly. I have forgotten a few things. Once I have put all of that away I have £200 in my checking account. And it's gone because of course things break in our house almost monthly sometimes many things in a row. Just a couple months ago washer, dryer, and boiler broke in a few days apart from each other.

And we had £0 in savings and emergency before the cost of living crisis because we have been renovating our house and used it all up. It's still not done so we slowly chip away at it now.

But you have a significant amount of discretionary spending here that you could cut if you had to or even just to free up money for other things.

Your grocery spend is far more than it needs to be.
You could cut your subscriptions and internet by more than half
Clubs and gym/swim are entirely optional, as are social and gifts.
You're counting over £400 in savings as 'money gone'

You could probably free up about £1k from the above by trimming costs or reallocating.

Spending over £1k pm on groceries and £400 on gifts and socialising is not 'struggling'.

Yes, you have a high income, and no, you don't have to go without nice things, but you can't honestly claim to be 'struggling every month'.

You're struggling?
I could find plenty on that list you could cut back on.
Jesus!
You do know there are people who can't afford to eat?

I think it depends on the standard of living you want and luxuries etc. I would say it is possible to manage on very little if you have to. If you don't have to though, is it prudent to leave yourself with just £63 per month. We have really noticed the increased in what our children cost compared to the primary years. School trips at secondary seem to start from around £500, music lessons, clubs, Christmas and birthday presents. Holidays also cost more whem they are older. If you are in the privileged position of being able to even consider at £2200 a month mortgage I would always recommend being generous in provision for the unexpected.

I was also making the comparison between the primary years not nursery years. OP said her children are primary aged and so probably not costing as much in nursery fees etc.

Grocery bill is trimmed already...I shop exclusively at Lidl and cook for all 5 of us from scratch.

I don't spend £400 on socializing. That would be amazing. That was combined with our emergency fund and other funds. I spend £100 on socializing and don't use it every month. We have no family here, and use it to roll over for a babysitter once a year or a date night plus having an occasional coffee, etc. It's our eating out etc. So actually it's not a lot for a family of 5. We HAVE to put our savings in because when things break in our house it's usually £1000 to fix and everything is breaking all the time because of its last replacement/age. Gifts is saved for all birthdays, classes, etc. I save for the year by each month so it's not a lot in the end for all of us. When you budget for the year each month and live in an expensive area...and only have £200 ISH leftover that just gets eaten by something that pops up it's not a lot. Especially against the original income.

I say this with kindness OP....don't be so fucking ridiculous

Yes,i n 1990 we paid 50% of our net income with both of us working full time, on the mortgage (interest only). It was worth the sacrifice, longer term.

Yes I do know that! I have been one of those shockingly!!! My mil pays for their activities now because it was not an option for us to keep it financially. We thought our mortgage was going to increase by 2 or 3k which would mean our mortgage would have been nearly 6000k a month from 2600! We now are saving every penny to get to 10k saved incase we have to worse case move back to our home country which would be 20k minimum to do. It's easy to judge without knowing all facts.

We have more than that a month coming in before tax and we wouldn't pay that for mortgage with other outgoings and 3 kids it it would make things incredibly tight. We're dreading renewing our mortgage soon and paying just over 800 at the moment. My advice would be to leave yourself some wiggle room the basics are just going up so much at the moment and you may also find you need money for house maintenance etc which isn't cheap either. I think you would be mad to take that on personally.

@Xenia how much money did you have left over after your 50% income on the mortgage?

Not in a million years would I get a mortgage that high with only £4k take home. You might get by most months, but what about unexpected expenses or savings? Car needs replacing? Funeral? Holidays? Family stuff? At 20 I probably would have thought I could do this. At 40+ I have the life experience to say don't do it!

Ah that makes sense - sorry for misreading!

I do agree that £63 a month left over is not a good idea

its also difficult sometimes to say you shouldn’t spend 50% of your income on a mortgage. I mean, say you earn 20k a month (not talking about me fyi but have friends who earn more than that) and your mortgage is 10K a month you’ve still got 10K a month to live on. Vastly different to someone having 4K a month take home and a 2k mortgage

No. £63 left a month is nothing. I'm surprised your broker let you believe that.

Ooft no, way way too risky!! We struggle with a similar income and our mortgage is £1k less than that!!

Buy a home that you need rather than one that suites your aspirations. You will be far happier.
We never made the step up to dream home, as a result we can afford nice cars, have privately educated DS. We can afford to pay for the big stuff rather than living on a shoestring. I have never budgeted for food or the extras because there is always money left over.
The housing market is on the brink of collapse and it will be catastrophic for those who have taken huge risks. I sold my first house in the 90s for 20% less than I paid for it. Fortunately I had still had the equity I had invested having paid high mortgage payments. But I know a number of people who lost everything.
Buying at the top of the market may result in you being trapped for years in a house you can’t afford. And then if you sell it with negative equity you lose your savings as well.