AIBU to give up being mortgage-free to buy our dream home?

[Dreamhome4]

We’ve been offered what feels like our dream house — it’s spacious, in a great location, and ideal for our young family. The current owners are relocating abroad and have offered it to us for £50k below market value.
Right now, we’re mortgage-free, which I know is a rare and lucky position to be in. But to buy this house, we’d need to take out a £275,000 mortgage over 35 years. Monthly payments would be £1,220. I’m currently a stay-at-home mum to our toddlers, so we’re living on one salary. After all bills, we’d have about £500 left over each month for the next two years — but we’ve also got a £20,000 emergency fund as a safety net.
In two years I’ll be going back to work, and we plan to start overpaying to bring the mortgage down.
We could wait until I’m working again to buy, but honestly I don’t think a house like this will come up again — it would give the kids so much more space to grow up in, and really feels like a forever home.
AIBU to even consider this when we’re currently mortgage-free? Or is this the kind of opportunity that’s worth stretching a bit for? No matter what, we will definitely have to move in the next five years for more space.
Would really appreciate your thoughts.

A lot of these replies seem to be from people who must be much older and have no experience of current house prices. 275k is not a big mortgage. I would do it, you know in 2 years your income will increase

Yes, very definitely go for it. You sound well organised financially and very sensible. You won’t regret it. Best wishes.

I’d do it in a heartbeat. You’ll likely regret it if you don’t. If you need more money sooner, you can get a job sooner..just a thought.. That’s not a big mortgage by today’s standards, and you are getting offered a very good deal on the house.

Are you joking? £275k is as much as a single person on £68K can borrow. That’s double the average household income. It might not be much in comparison to insane house prices, but it’s still a big mortgage.

If you are managing to save so much currently, what are you saving up for? Are you investing well? We overstretched in the past and it’s the best thing we ever did.

It’s not a parent selling it. Due to our financial stability, the sellers want us as it’s a shorter chain.
@CyclingAddict - we are putting the money away for a bigger house. I just don’t know if this is too much of a stretch. The sensible part of me knows it’s only for 2 years. And £500 after all bills are paid isn’t the worst. We probably live off less than that now due to putting every penny away in savings.

How did you feel about your living situation before you heard about this house? Were you planning to move or were you quite content with life?
I really wouldn't do this. Life is completely unpredictable, especially just now. You are in a fantastic position at the moment. Do you really want to lose all your security?
£500 for incidental expenses sounds a lot but it really isn't. Especially as you haven't included predictable expenses in your budget. I know you think if you are short of money you can take what you need from your savings but savings can be decimated really quickly if a disaster happens.
I assume that there are no holidays factored into your budget either. What happens if you really need a break? Holidays, even UK based breaks, are really expensive.
Children only get more expensive as they get older. Have you factored in the increased costs and demands there?
Mortgage/ rent is a fact of life for most people your age. Being mortgage free is wonderful. Do you really want to be tied down by debt when you don't have to?

@MereNoelle food will be paid out of the budget, so the £500 left does not include food

I don’t think £500 is a lot for a family of 4. What about holidays? Going out for dinner from time to time? Doing day trips with the kids? Getting a haircut? Buying birthday presents?

As PP said, you might end up just ‘existing’ for 2 years, which doesn’t sound fun.

Being MF is where it's at. Why spoil things??! You'd be mad.

But they’ve been saving for years solely in order to be able to move to a bigger house, so it’s obviously a huge priority to them. The question isn’t whether to move and take out a mortgage, that’s the plan regardless. The question is whether this particular mortgage is too big.

Still, not something I would do with a young family as they get more expensive as they get older. I've 4DC and glad not to have any mortgage due to the cost of living and allows us to save up for stuff quickly. OP, please think this through carefully...

@MereNoelle this is it exactly.
Also, just to add, we aren’t the type to live a mortgage free lifestyle. So yes, we could stay mortgage free and go on a 5-8k holiday with the kids. However, we wouldn’t enjoy that as I would always feel the money is better invested elsewhere. We have been mortgage free for the last 3 years, and we have never been ‘splashy’. I think we get more joy out of saving than spending. I can’t wait for the day we have the bigger house and we can actually spend knowing that every penny doesn’t need to go towards saving for a new house.
I think once we have 2 incomes again, it will be very different as my wage can be used for ‘fun’.

Only you know how much this house would make a difference to your family.

Is the £500 for fun money? After you have paid for food and everything else?

If it includes food then I think you would need to take on a part time job around childcare responsibilities eg in the evenings and weekends.

Do it - in all these worst case scenarios (illness, not getting a job, money feeling tight etc) you still have the option to downsize again, selling it and making the £50k profit yours to put towards the down-sized house. Assuming it really is £50k below market value, then I would risk eating into the savings a little bit to make it happen.

I also think it is a great plan to sell it before paying the whole mortgage off, once the kids leave home. This is the period in your life that you need the bigger house, not to be saving for a house you buy later that the kids will live in less than 10 years. Now is when you need a garden, now is when they have lots of stuff and as a SAHM you are spending your time in the house.

It sounds a great decision and you sound careful and financially literate. Go for it (and allow yourself to be excited)!

Go for it or youll always be kicking yourself for not buying it

We're nearly mortgage-free (a few years older than you) and the thought of taking on a £275k mortgage now for 35yrs gave me slight heart palpitations. That doesn't mean that it won't work for you, of course!

But that's more than the entire value of our house, and as many PPs have said, interest rates could do anything. Are you saving any money to send kids to uni/help them out financially when they're older?

IMHO, if a house involves taking on a new £275k mortgage for 35yrs at nearly 40, with only one of you working, it probably isn't your dream house. But lots of people do similar, and they cut their cloth accordingly.

What salary were you on in your last job and do you expect to be able to achieve that again when you go back to work

So since becoming mortgage free 3 years and for at least the next 2 years, you’re not going on any holidays? You might prefer to invest money than spend it on travel, but it’s not just you you have to think about. Are your husband and kids on board with no holidays for 5 years?

I definitely wouldn't. The job market is absolutely horrendous currently and I can't see it improving soon. I've been on both sides of the recruiting process recently and it's far more competitive than ever. People taking massive pay cuts even for part time roles.

I would hunker down and wait until you have paid work guaranteed.

I’d do it. You’ll manage

I would do it so that dc have the benefit of growing up in the dream house and you could potentially stay there forever. I think it's worth it for those reasons.

@Crushed23 we have been on holidays, and we will be going on more. I just meant that we don’t splurge on really extravagant holidays.

I can’t see how £500 a month after bills would leave room for holidays for a family of 4, but you must be better at bagging a bargain than me!

This!!