AIBU to go to the top of our budget for a bigger house?

[LoftyOtter]

We’re currently mortgage-free but considering moving to a bigger house as our current home is getting too small for our growing children. To do this, we’d need to borrow £275,000 over 35 years. Once the mortgage and all bills/food are paid, we’d have around £500 left each month for savings and emergencies.
Right now, we’re on one income as I’m a stay-at-home mum, but I plan to return to work part-time in 3-5 years, which would ease things financially. That said, it’s hard to ignore how comfortable it is being mortgage-free—we don’t have to worry about unexpected expenses or big financial shocks.
Would it be crazy to sacrifice that security for more space? I keep going back and forth between thinking it’s worth it for our children’s sake and worrying that we’ll feel too stretched.
Has anyone been in a similar position? Any advice would be really appreciated!
We are both late 30s.

I wouldn’t. £500 is not enough of a buffer for me.

OP what are house prices like by you? What's the minimum level of home you're trying to achieve? Is there a compromise from 0 mortgage to £275k mortgage?

You child could have waited to go to uni until they were no longer linked to your income, i.e. after the age of 25. They could have gone to a local uni and lived in your house. Just like a purchase of a new house, you had options to consider. You chose the most expensive option.
How can we plan for something in 15 years time? University may be free by then or there may be none of them left.
Similarly, you can make a choice to not finance your childrens' car(s) and they can work and pay for their own lessons. My teen doesn't even want to drive. Which is fine by me so long as she is happy to walk and use public transport to get places.
These are all choices available to you.

I agree it's not worth fretting about uni too much at this stage, I wouldn't make any major life decisions on the basis of it when kids aren't even out of nappies. I doubt my youngest will want to go.

For us by the time ours were early teens I worked out I will be paying off my student loans until eldest is 15 years old, so the £400 I'm currently paying will go straight into savings and if I keep that running that should maintain what both would need to go, and we'd be able to top up if necessary. My point, when it becomes necessary, you'll usually figure out a plan, one way or another.

I wouldn't hesitate. You've said you'll be left with £500 each month and that you will have savings of £10,000 for emergencies so I don't see any reason not to move to have the house you want. We really stretched ourselves when we were in our mid 20s and spent over 70% of our combined take home income on our mortgage. It was a real struggle and we lived from hand to mouth for several years, but it enabled us to move to our current house ten years later.

OP we did this, we had a fairly smallish mortgage and bought a bigger house moving out mortgage to £275k. We took it over 25 years as that’s all we could do at our age and are now overpaying to get it paid off within our 10 year fixed rate (which thankfully is ridiculously low)

This is the things we considered:
What happens if one of us looses our job?

How are we going to save for retirement?
Can we afford this when we have two kids at university at the same time?
Can we still afford nice holidays (something very important to me as my work is really stressful)
Can we afford big house repairs?
Can we afford to do cosmetic changes?

We ultimately bit the bullet and did it as we wanted more space, are closer to our kids school and to have the ability to have enough space if our children needed to live with us for a bit when adults.

We have been fortunate enough that my job has taken off and our income has increased enough to allow us to over pay the mortgage and be able to put reasonable money into our pensions.

We are having to time things so that our mortgage is paid around our kids going to Uni but that means sacrifices elsewhere.

I don’t regret it at all but i do sometimes wonder how much better off financially we’d be if we’d stayed where we were. however i also know I’d have always wondered what if had we not done it.

My biggest worry is one of us looses our job, or becomes unwell and can’t work. I also know if our earning hadn’t increased as well as they have I’d have been way more stressed about our outgoings. So do consider your future earning potential and are you willing to go back to work full time if you need to.

The recommendation now is for parents to prepare for it. Sticking your fingers in your ears and going la la la is nuts. When all their friends are off and they want to start their careers waiting 7 years is ludicrous. What are they supposed to do during that time whilst their peers are off getting degrees and first jobs? My dc didn’t live near a uni for what they wanted to do. They also have to get into said unis so need to hedge their bets re applications.

Cost of living is only likely to go up so that £500 a month is likely to turn into £300 and £10k in savings is nothing if you’ve had big bills for cars, teens, house upkeep, potential need for private health provision….No holidays for basically ever…

What pension provision is there?

Mortgage free in your 30s? God I'd sit back and enjoy but my house isn't massive anyway and houses 4 of us fine.

I don’t think you’re likely to get a 35 year mortgage at your age, OP. We got the max of 29 years which took us to retirement age.

I assume as you’re mortgage free, you’re currently ploughing quite a lot into savings? Increase those for a year so you’re left with the £500/month to spend and see if it’s doable.

@Ryeman depends on the lender, some go up to 75.

The mortgage term wouldn’t concern me too much if I had a longer term plan to reduce it, but the £500 per month would. For clothes, holidays, days out, social activity. What about clubs and activities for your DC? I wouldn’t choose to live on that little discretionary spend unless I had no option.

is there really no middle ground, no mortgage to £275K is a bit of a jump?

Have you found a house you want @LoftyOtter? If you haven't, tighten your belts now while you look bearing in mind a bigger house will likely mean significantly bigger bills than you are currently paying (especially council tax)

Are your children at school yet? Can you be more flexible with the area by increasing the commute to work for your husband?

Not every child goes to uni and if the trend continues your children may be living with you until well into adulthood so imo it's a smart decision to buy a bigger house to accommodate growing children.

You are basing the mortgage on husband's income and presumably you won't struggle to return to a well paid job when childcare won't be an issue. Making the belt tightening fairly short term. You're in a good position to do this, and you may find your perfect home a bit cheaper! Good luck.

I'd be too nervous about only £500 spare pcm. Broken dishwasher, roof repairs, mortgage rates, anything can happen.

Thanks again for everyone’s input on this, I do really appreciate it as I’m really don’t know what to do.
So we are based in Hertfordshire, if that’s relevant.

With regards to there being an in between property, that is definitely an option. The one we have our eye on that would suit our growing needs as a family is on a main road and needs work done to it. It would require a new kitchen, en-suite and bathroom as it’s very outdated. We would also need to get a driveway installed. These are things we could do over time as we saved. It would also need a load bearing wall taken down. That property would be a £160000 mortgage.

The house that requires the £275,000 mortgage needs no work done to it and is detached. It was originally advertised at £850,000 (Covid times) then it came off the market. However, it’s come on again last month at £800,000. When I enquired I was told they wouldn’t take an offer. However, the estate agents phoned last week saying we should now put an offer forward to see if they would go to £750,000.

If you do buy (and I think if it's correctly priced then it may be a good investment), go for the one that needs no obvious work. Get a solid survey to make sure that's the case. The cost of building work has gone through the roof.

The cost of any tradesman has gone through the roof so no imminent bathroom, kitchen, electrics,plumbing,outside work etc.

So what size house are you in now , what size are you looking at and how many kids?

Right now the economy is not in a place where i would cheerfully overextend myself.

You can't afford it. Most people can't afford a bigger house with a sahm.
if you want to be better off, why don't you go back to work?

Two young kids, pre school age which is why I’m not working. Our house currently is 82sq ft. This new one is almost 2000.
I have accounted in our budget the higher council tax and electricity.

Surely not 82 sq ft! 820?

This thread makes no sense. Op is looking at 800k houses and one mid level teachers salary and is apparently mortgage free on that as well... how does a teacher in their thirties have a 500k house fully paid off

I advise against. You can reorganise your house. Kids will move out one day.
You are in a great position to enjoy your life free from financial worries so focus on that.

Lots of people work at least part time around pre school kids. Presumably to get to where you have you must have earned more than your DH?

Perhaps they have suffered parental loss early in life and inherited money?

Yes it is the norm now. Among my peers anyway. 30s.