Double spend on mortgage, dream house vs. Smaller mortgage with more spending money?

[Sunnydays888]

Posting for traffic. I’m interested to know what people generally think is ‘stretching’ too far when it comes to mortgages and house purchases. We have just put our house on the market as really keen to move to a bigger house, out of town/semi rural but the two houses we are interested in would essentially be double what we pay now, per month.

This isn’t a humble brag, I know we are in a privileged position but I’d like a bit of perspective from those in a similar circumstance. Take home of ~£9k per month between us, 1 DC in full time nursery, currently paying about £1,600 a month on mortgage. Houses we are looking at would be around £3k - £3.5k per month mortgage payments. A big jump, obviously.

We could afford it, but I know we would need to be more careful about spending (obviously bills would be higher and we have things like commuting costs, some finance we are paying off etc.)

Question is, I suppose, what’s the maximum you’d pay on a mortgage a month in proportion to your salary before you’d feel over stretched?

And what do you prioritise, big, spacious house in ideal location but less able to be frivolous with money (which we probably are at the moment) or stay in smaller house for longer (until more of mortgage paid off or pay rise) with more scope for spending, holidays etc but feel dissatisfied with the house?

We decided to renovate our current house rather than move and increase mortgage. Decided for now we would rather have the extra spending money and be able to afford things like clubs and activities for DC than scale up and be more restricted money wise.

There are 2 ways to look at it.

1. Keep moving up the property ladder whilst you have the income to do so that when you need to you can sell and afford a small nice managble home in your older age and have spending money, until you have to sell it to go into care.

1. If your family isn't going to grown have a smaller home and a smaller mortgage (renovate as needed) and save and spend the money as you see fit

The recommendation is to spend no more than 28% of your take home pay on housing costs. So you'd be above that, and you have high childcare costs at the moment as well. Remember all the services associated with your house will go up as well: insurance, council tax, gas, electrics, water. I think this jumpis slightly too much. What could you get if you had a mortgage of £2500pcm? You do have room to increase your mortgage and I think that's more sensible long term than frittering away your money.

We bought our current house in our mid 40s and went from having about 18 months left on the mortgage to having a 20 year left but I never regret it because this house gives us so much more space which with 3 teens is really useful. But only you know how important this house will be and if you're prepared to cut back other expenses to afford it.

We went for 1/3 of our take home. Good job we had savings and investments as life has thrown us a number of curve balls. We were intending on spending those on upsizing. On the plus side our dd is alive and she may not have been were we not spending vast sums of money putting her through private school and over a grand a month on specialist care for her.

We did this - pushed up to the limit of what we could afford after lockdown in a smaller house with our kids. The maths for us was making sure either of us could pay the mortgage if needed (like if one of us is off work for a length time for any reason). I wouldn't go higher than that without good reason.

Oh and yes - the mortgage was one thing but bigger house means way more things that go wrong too so the very unexpected bit was how much more we are spending on random repairs.

We’re about to do this. Our mortgage repayment will almost double. It does feel scary, and it will require some lifestyle adjustment. An opportunity came up to buy a truly beautiful home in the right area, which will improve our quality of life as a family hugely. We’re a family of introvert homebodies so don’t really go for drinks or meals very often and are used to a holiday maybe every 3 years. We run an old car between us and are planning to hold onto it for as long as possible. What I’m saying is, in our case, the house we live in is the most important investment for us so we’re happy to stretch and make other concessions in order to have what we really want. However, I do keep panicking at the thought because it’s a bigger leap than we expected to be making 🫣

We’ve stayed in the smaller house and prioritised holidays, having a wonderful life with our children and saving for their education and the house deposits they will no doubt need. No regrets. Moving house is for you not your children as they will be fine anywhere as long as it is a loving home.