To buy or not to buy house

[Mum3202]

We have around £65k in overall savings that we’ve been saving for the last 10 years. Our budget is £400k (houses are all in this price range on the location we need to be for work so sadly we won’t be able to go any lower than this).
10% deposit £40k, stamp duty £5k, mortgage fees, etc £5k, house extras, etc. £5k. Around 55k total, worst case scenario.
We have a DC now and the idea of being left with just around 10k for emergencies scares me. For context, family wouldn’t be able to help financially if we need and we won’t be getting any inheritances in the future. So it’s just really us to look after ourselves and DC.
DH is 40 and I’m 35. We would like to pay a mortgage in 30 years if possible.
We are renting atm and we’ll need to move next year anyway as DC will need his own room. So the question is rent a bigger place or buy a house.

AIBU - to buy a house now. Wait a few years and save some more.

AINBU - buy the house now.

Thank you.

That’s a big mortgage at your age…def can’t find anywhere cheaper?

I would buy, like the security of it being my home (albeit mortgaged). How much would mortgage be in relation to rent? What are you worried about happening? There would presumably be a solution, e.g. mortgage payment holiday if you needed or insurance you could use (I am lucky to have good sick pay cover with work)

Buy now, always. We bought this house and thought they'd never be more expensive. 9 years later we'd need £200k more

House prices rarely ever come down enough or ever to justify not buying now.

This. And once you’re not saving for a deposit you can build an emergency fund.

Yep, buy as early as possible

Buy now!!
The sooner you buy the sooner you can start chipping away at your mortgage.
There really is nothing to be gained by renting for another few years and you will regret not buying sooner.
It’s scary going from seeing £65k in your savings a/c to ‘just’ £10k but try to think of it as just moving the money around into bricks.
Best of Luck OP!

I think if you're going to have to move - and presumably pay more in rent in a bigger property - you're better off buying as I think it will cost you less in the longer term. Are there also opportunities for promotions or pay rises in your jobs? Do you have childcare expenses that will reduce dramatically at some point?

If you're renting will you be first time buyers? In which case you won't need to pay the stamp duty fee

Mortgage rates are likely to come down, so don’t tie yourself to a long term fix.

Could you cope if your mortgage increased by 50%, or if one of you lost your job?

What would the difference be mortgage Vs rent? I'd imagine they'd be similar. You've built up those savings in the last ten years. Once in your own house you'd easily build those back up again so it wouldn't just be 10k. It always feels tight whenever you first move into a new home but it does get easier over time. Also don't forget when you come to renew in a few years time interest rates 'should' be lower. Whenever we've got into a new mortgage deal we've always tried to over pay the difference we've saved each time by going on a better rate/lower mortgage deal.

Edit: since having a mortgage we've always had a back up 'long term savings' account. It has enough at the moment to cover three months mortgage payments and bills. We have other accounts for emergency funds such as the boiler breaking, fridge freezer dying all sorts of things. However our mortgage back up is ring fenced for that only.

Sadly no. We are already looking at around 1h30 commute each way. If we were to go even further where houses are slightly cheaper it would be around 2h commute each way and travel costs between £400-£500 per month which we can’t afford.

Mortgage around £2000. Rent when we move to a bigger place around the same or more. Yes, I would like to have that security too. Even more now after having my DC. Anything such as sickness, job loss, etc.

Thank you. We usually have pay rises every year but it’s not a lot (between 3-5%). When DC goes to school in 4 years.

This is psychological.

I’ve NEVER had a £10k buffer and always had to mortgage to the max I could get with scraping last pennies together.

Owning is so much more secure than renting, if it helps to think of it like that. House prices will never be cheaper than today.

Yes, we are. If we buy after March 2025 (which might happen) the stamp duty threshold will be £300k so unfortunately we will have to pay stamp duty in the remaining £100k.

Thank you. We couldn’t cope with just 1 salary. Hence the reason for worrying about savings.

Thank you. Mortgage around £2000. Rent when we move to a bigger place will be around the same or more. It worries me that we won’t be able to save the same amount per month that we save now as we’ll have other expenses such as an increase in commute expenses, council tax, etc. So it will takes a bit longer to build back our savings.

Buy.

Our country builds a tiny amount of homes a year and last time I checked we have inward migration in the hundreds and hundreds of thousands. The housing crisis is going to get WORSE.

Another thing to check is the direction of the market for your specific property and similar properties in your area. You can’t rely on the headline figure.

I hated paying rent and really wanted to buy. I don’t regret it - the total costs are marginally more than renting, but I’m paying off the mortgage.

Of course there is always that concern. If you hold off for say two years then that's two years you could have paid off some of your mortgage. You are also at an age (similar to me) where you might begin to struggle getting a 30 year deal if you leave it much longer so would have higher repayments on a shorter term mortgage as a result. Therefore even less to have in savings.

Where the mortgage rates at the moment are sat around 5% in two or three years time on a short term deal a new term might perhaps be 4% (I'm no economist). On a 350k mortgage that would be a drop of approx £200/£300 a month and you've paid some of the mortgage off in that time. So for the short term pain of putting less in savings after your initial painful first mortgage you will be better than renting.

You've got to play with the figures in a calculator and see what the pros and cons are to it.

There is always that little niggle I have if DH loses his job and the limited few months we have to cover the mortgage. However we currently have over £100k equity in our house. We would sell and downsize to a smaller house to lower the repayments. These are things you can play with over time, if you can't pay your rent when you've exhausted your savings then you are turfed out.

This was us a few years ago OP, we bought the house. Had massive income reduction 3 years in that fortunately that coincided with school and no longer having nursery fees. Mortgage is totally comfortable now and house is worth 30% more than we paid. And savings have recovered, not to what they were, but we have a decent safety net. You could wait but there a fair chance houses will get more expensive anyway. I’d say go for it, you never know what’s round the corner. But I understand it’s a tough decision!

Buy. Otherwise tot continue to pay someone else’s mortgage.

One, you will absolutely have to pay stamp duty as first time buyers, there is no exemption for first time buyers, it's only the thresholds that will change and marginally at that. Second, I agree with everyone else about buying. Our first mortgage as first time buyers (35 and 36 years old ) was 570k with 100k for a deposit and we had no savings either, however we did have good jobs and it wasn't like all of our money or even a large part of our monthly salary was going into the mortgage. If you are in the same position then I wouldn't worry too much about savings. We also sold our house 2 years later for 870k, so we ended up making money on it. We were lucky, we sold at the height of the COVID bubble so obviously that's not likely to happen again, but it also likely won't go down in value in the UK where housing is at a premium.

I'd say buy too
You can then pay down your own mortgage instead of someone else's
Your choices will be yours