To go for the highest mortgage offered?

[BraOffPjsOn]

Hi all,

DH and I have been getting our house ready to sell in the next few months we’ve been here for over ten years and now with two children we need something bigger.

I’ve been keeping an eye out on what goes on the market and the price I thought we’d be able to afford.
I’ve done a few mortgage calculators now though and they are estimating that we could borrow quite a bit more. With the current interest rate fixes it looks like we would pay £300 more a month to do this - we’d up our years as we don’t have that many left currently and I’ve also gone back to almost full time so we’ve not gotten used to the extra money yet really.

I do remember when using those calculators years ago that our mortgage in principle was a little less though so I’m bearing that in mind.

So AINBU to go for a more expensive house and maybe take on the highest mortgage offered?

Or AIBU and it will stretch us too far and be a horrible stress?

Arbitrarily pick two properties on Rightmove one with your current budget and one with the extended budget and run all of the numbers and see if it still makes sense. It won't be just the mortgage that's more it will be the stamp duty, conveyancing, council tax, energy bills and so on will also be more.

The other thing I would say it's ok to have a broad budget range when looking. When we were looking for our last house we were looking in the £450-650k range and honestly found houses across the full range that we were interested in and put offers in at the top and bottom of our budget. There were some houses where I would have stretched the budget and others that we walked away and said nice house but not worth that money to us. In the end the house we found that was right for us was towards the bottom on the range. It fulfills all of our needs and we are very happy here.

It's difficult for anyone on here to say without numbers. Can you do stress tests and work out if you can afford the monthly repayment if the interest rates go up a lot?

Absolutely not
speaking as someone who saw there mortgage payments literally double in the early 90’s

The question I’d be asking myself is could that mortgage feel like a bind in years to come? If one of you wanted to retrain, take a career break, or reduce hours would the size of the mortgage prevent that and are you OK for that to be the case?

We've always gone to the top end of affordability, but we both earn very well. It really depends on your circumstances.

It really depends. Can you afford for the mortgage to increase overnight? Ours went up £1000 per month when we had to remortgage and the rate had gone from 1.08% to over 4%. Can't say we saw that coming really ( when we moved to the house years before )

Essentially we spent as much as we needed to, to get the house we needed in the area we wanted to live, i wouldn't rush in to just borrowing as much as possible if you don't need to.

We're mortgage free and have been for years. Only possible due to getting a mortgage based on one income. If we'd stretched ourselves it would have meant more stress all round. In our 40s and 50s.