To move to a bigger house but have less money ? £1900 mortgage

[Pinkysparkles]

DH and me are both late 40s. Have a 2 and 3 year old. A boy and a girl.

We live in a tiny 2 bed and our mortgage is £900pcm. After tax we clear £5200.

We have bills and nursey fees .But at the end of the month we still have 1500 left. But this is used on savings, holidays and spending.

I want to move from Our tiny two bed soon , especially as we are getting older and don’t want a mortgage into late age. I want the children to have their own bedroom when older.

The house we are looking at , a 3 bed, would take our mortgage payment from 900pcm to £1900pcm. It would be for 20 years.

My obvious worry is that we would have £1000 less a month. Which scares me . Am I crazy to do this. But the alternative is a boy and girl sharing a room forever in our small 2 bed. There is no way we can extend .

Due to our ages , I feel pressure to act. If we do not move I will over pay the mortgage on our current home and we could be mortgage free in 10 years but the house would still be too small.

AIBU to push on with a move in this climate ?
DH as ever , happy so long as I’m happy.

We have no debts or loans for anything .

Are you looking for mortgages online or going through a good broker because in my experience they can get much better rates. Also can extend term past 20 years.. (obviously you want that paid off a lot sooner but this will be doable if you keep reducing the term)
I would be cautious about buying something that needs loads of work unless you are good at DIY as it is very expensive to get anything done these days.
You need another bedroom for sure its just 1000 a month for another bedroom in slightly bigger house doesnt add up for me...

Personally I’d opt for a longer mortgage term now to reduce the monthly payments short term to cope better for the next few years. You will always have the option of readjusting the term every time you remortgage and taking a few years off once nursery stage is done or wages increase. You also always have the option of overpaying (usually up to 10% of the mortgage value without fees every year). Taking a longer term mortgage now doesn’t mean you won’t still pay it off in 20 years.

As pinksparkles says you could take out e.g. mortgage insurance to feel safer if one loses jobs

You definitely will need that extra space.

Re: holidays- your kids are young enough now they won't kind doing stay-cations etc so you can save there

I’ve always tried to keep my mortgage payment between a quarter and a third of our take home pay. And when’s it’s been a third, it’s always felt a tight squeeze.
So at £5200, I wouldn’t go over £1300- £1700.
I would try and buy something cheaper, or extend the term to 25 years.
Once your nursery fees reduce, you could then overpay.

Even better if you waste money. Have a look at your finances and see where you can save and start making some changes so you have more disposable income. Do you both have stables jobs? Or a skill where you can find employment easier if made redundant. Most people would not be able to survive well in their current circumstances if one person lost their job..absolute worst case you could see the bigger house and moving back to a smaller house if something had happened. Yes, you would have wasted money on stamp duty I guess but your new buyer house may have increased in value and provide more equity. From what you have said I don't think you acting unreasonably to get the new house.

I would wait until nursery fees have finished so you will have more disposable income. In the meantime save some the extra money that you'd be spending on a mortgage and then take a shorter term out when you do move so that your mortgage would still finish 20 years from now rather than 20 years from when you move iyswim.

The south east is ridiculously over priced so I’d move to a cheaper area to get better value for your money.

We moved abroad and went from a 3 bed to a large 5 bed detached with 2 acres. We’ve made new friends here and the schools are better too!

I don't really understand why you would get a shorter mortgage than now?

If you have 30 years left, then a lender was happy for you to be X years old when it finished.
You've not gotten 10 years older with the mortgage term staying the same.

We moved from a 1.5 bed to a 3.5 bed about 18 months ago and pushed our costs considerably (London, no plans to leave). Together we bring in around £5,400 and our mortgage is £2,300. One child in nursery with associated costs. We still waste some money, but are generally reasonably frugal overall, I think. It definitely feels doable to me and I'm really happy we moved when we did - I love having some space & being able to host.

I wouldn't personally buy a house that needs significant work at this point, even if it was cheaper. You're in your late forties, both working, and have two small children - I think that's enough to be getting on with, and the point of moving is to increase your quality of life, not add more stresses of a different kind. Plus getting work done is really very expensive now. I say go for it! Good luck!

editing to add: Partner is in early forties (I'm late 30s) and that did have an impact on the mortgage terms available to us.