Disagreement re. DP with finances/budget - what do you think?

[Raceacrossworld]

DP and I are looking to move house, however we have had a disagreement over budget and what would be affordable.

If we were to get the Mortgage I think would be manageable, our outgoings would look similar to the below. I think it would be fine but DP doesn’t believe we have sufficient left over funds.

We have an emergency fund saved already.

Can I ask for your thoughts?

Monthly:

Combined income post tax/NI/pension contributions is £4000 + £100 child benefit = £4100 total

-Mortgage/house bills - £1900
-Nursery (we have one DC) - £100
-Petrol - £150
-Other (eyecare, phone contract etc) - £50
£2200 total

Food at an estimate c.£450 a month

Bills + Food = £2650
£4100 - £2650 leaves £1450 for social, savings etc.

I think £1450 left over is plenty, we aren’t particularly extravagant people. We enjoy the odd meal out, DP goes to watch football maybe twice a month.

This would be a move to a house which in theory would last us for the foreseeable, so the need to save heavily would be removed somewhat. We would still want an abroad holiday a year and luckily have 2/3 years until DC starts school so can go away out of school holidays etc.

Any thoughts welcome!

Personally I agree with your husband that it's too high. The mortgage would take an entire salary away, if one of you lose their job - him in particular - it's putting your family in a difficult position. It just puts a lot of pressure on the highest earner to maintain their income for a long time.

I can't imagine your estimate includes all costs for you.

Here are the categories I use for my own expenditure. Unless you can fill in similar for yourself over an entire calendar year and come out with a significant gap between what you earn and spend (I think you will find this incredibly difficult - I think you've missed most expense categories and have grossly underestimated your spending), then this house is unaffordable. Our family take home around £9800 each month and would consider your mortgage very expensive.

Categories:

Kids:
Wrap around care:
Clothing
Swimming
Music/other activities
Holiday clubs
Kids other
School meals
School trips

Bills:
Mortgage
Council tax
Electricity/gas
Life and critical illness insurance
Professional fees
Water
Home/contents insurance
TV licence
Window cleaning
Garden waste
Phone
Investment fees
Pension
Pension fees

Expenses:
Home improvements/maintenance (budget 1% of house prices per year for this)
Personal
Eating out
Presents/parties
Food
Work lunches
Home items (furniture/cleaning products etc)
Xmas
Adult time/babysitting
Days out
Health
Emergency
Miscellaneous

Children's savings:
JISA
Children's SIPP

Savings:
Mortgage overpayment
ISA payments
Premium bonds
Lisa payments
Interest etc.

Holidays:
Accomodation
Tolls
Insurance
Passport/visas
Ferries/travel
Others e.g. crit'air /car modifications

Car:
Fuel
Service/MOT
Car repair
Breakdown
Parking/tolls
Bus/p&r
Taxes
Car wash
Other

Subscriptions (adults):
Sport
Music lessons
Charity
Amazon prime
Apps/other

I'm pretty confused. If OP came on here saying I only have £1450 left after everything is paid she would be met with pages of 'boo hoo you', that she's boasting, tone deaf, can't read the room etc.
£1450 is obviously plenty left and way more than a hell of a lot of people.
OP just make sure you have everything included and you will be fine with that.

You’re doing that thing that “spenders” do when they add up their outgoings to justify something and ignore a lot of costs as “they don’t count”

I agree with previous posters, you are not allowing for a lot of normal costs. I think you are being a bit too relaxed about budgeting and really understanding where your money goes.

I highly recommend downloading all your spending transactions from all your accounts for a period of at least 6 months, plus check all the annual or one off payments, and enter it into a budgeting spreadsheet. This is about what you are currently spending not what you 'want to or 'think' you spend. It really surfaces the true costs of small things that add up. Years ago I was spending £5 per work day on takeaway coffee and a breakfast snack like a muffin. At least I was until I realised that was £1200 per year!

I recommend this one:
https://www.moneysavingexpert.com/banking/budget-planning/#spreadsheet

It has a column to enter 'desired spending', so you play around with increased mortgage and bills and decreased spending in other areas if necessary.

Other questions. You are part time, are you still paying in full time amount to a pension? If the agreement is you are part time for childcare (and saving money on nursery fees) then partner should be topping up the difference. This is how women end up missing out come retirement and is part of the motherhood penalty.

Are you BOTH saving for the long term future, not just an emergency fund but for example are you both making AVC;s into pension, are you spreading your savings across Stocks & Shares ISA as well as cash etc.

Basically because you have a decent income and comfortable life you aren't counting the pennies enough to really know if you can afford a bigger mortgage.

As for the mortgage, it depends why you want to move and how much extra that LTV is. I was spending 35% of my income on mortgage and service charges alone for a long time. It was OK but meant being careful in other areas.

I don't think you understand budgeting if you're discounting things that are paid annually from savings. You still need to budget to replace those savings annually.

What is the effect on the £1900 mortgage of mortgage rates increasing by, say, 2%?

If I were you I’d look for a mortgage with a repayment of no more than 25% of take home pay. Could you extend the term for now to make it more affordable? You can always overpay up to what you think is affordable, but then you have some flexibility if things go wrong to stop the overpaying.

There's a difference between having to make do with a certain amount, and actively choosing a certain amount, though.

I would say £1450 a month is a pretty decent amount to make do with 🤷‍♀️

Hm, not when your mortgage comes to as much as OP's does and they'd struggle if one of them lost their job.

I think you still need to factor in the things you pay annually as part of a monthly budget or you could end up with nothing left to pay them in the month they’re due!

I would say the majority of families rely on 2 incomes and would struggle if one person loses their job.
I agree it's not loaaddsss of money left over but it's the same as what so many people have and way more than what a lot have.
It's just such a different response to what the majority of finance threads on here would say.

I think the responses are different because OP's budget is so, so vague.

She says she has £1450 left which does sound plenty, but there are also loads of expenses that she hasn't accounted for.

So you are going from £1400 to £1900 bills. You currently save £1000 pcm.
So the £500 increase means that you will save £500 a month. And you are using those savings for some annual costs like a holiday? That £500 could be chipped away very quickly. Will you actually be doing any long term saving? And will you have blown your emergency fund buying the new place?

Leaving aside the actual numbers, I think this is the sort of decision where the more cautious person has more sway. Imagine if you argued in favour of getting a bigger, more ambitious mortgage, and then one of you lost their job and it all went wrong. The emotional consequences on your relationship would be huge. And bad.

£1400 mortgage is way too high for £4k income. I'd say £1k max. Less than that if you're planning another child/mat leave.

In theory we could yes, DP thinks anything above 25 years is silly though. 30 or even 35 years does reduce the amount quite a bit and the intention would always be to pay off before then (e.g pension lump sum or inheritance).

We have a slightly higher income than you (£4.5K). 2 DC, 1 primary 1 secondary. Our mortgage is about half what you are proposing. We don't have anything like the disposable income you do. I've set things out below for our current month that I am spending your "spare" £1450, it's a total of £1589.50.Granted we have a car loan and pay wraparound which is a big chunk of that. But your current car won't last forever. You might have another child. You might have to pay wraparound in primary if your situation changes.But I haven't included, haircuts, clothes, presents, Xmas, etc. I think you are leaving yourself no wiggle room at all and I personally wouldn't go for a mortgage that big with your household income.Wrap around care: £400 p/m (1 child)Swimming: £37.50 (1child)Music: £52 (1 child)Football: £20 (1 child)Karate: £40 (2 children) - occasional extra costs for grading, etcHoliday clubs: Nil as OH works F/T term timeSchool trips: Currently £100 p/m towards a France trip for older childInsurances (Car/Life/House/Breakdown): £100 - this is for 1 carWindow cleaning £10Phone x3 (sim only): £30Holidays: £350 (this doesnt go as far as you think for 2A2C in August)Fuel: £100Car tax/MOT/service: £30 (not including repairs)Car loan: £300Bus/Occasional Taxi: £20

So you don't have £1450 leftover. You understand that, right? Because you're paying bills out of that amount and spending it on your expenses.

Look at your savings. How much more are in them on 1/9/25 compared to 1/9/24. Remove any bonus amounts, interest paid to you, gifts to you and any other non guaranteed, contractual income that you've received (regardless of what you did with it) in this period. Divide whats left by 12. Its not £1450 per month, is it?

As others have also said, your food and general outgoings sound very low i.e. unaccounted for. I went through my bank statements recently - there are all sorts that keep cropping up with kids as they grow such as gifts for their friends' birthday parties, their own birthday parties, devices, clothes, shoes, books. 50% on income on a mortgage does sound very high for a family of three with changing needs.

With a lot of mortgages you can overpay 10% a year without penalty. So if you can afford £1400 a month now, going up to £1900 is £6K extra which I'm guessing isn't likely to be 10% of the mortgage.

So personally I'd extent the term to whatever makes it around £1400, but set the direct debit to pay £1900 and see how you go. If its working, keep it at £1900 and pay it off in 25 years. If you've overstretched and feel like its a bit much you have the room then to reduce the direct debit down to the £1400 mark if needed.

Remember you're likely only looking at a 2-5 year fix, you can always adjust then based on how stuff is going. Remortgage longer if interest rates are up and are in different jobs, reduce the term when you refix if overpaying going well and have a better job etc.

I would be very cautious with this thinking. Our incomings were higher than yours at the beginning of 2025 and less outgoings until DH lost his job, he had a approx £30k payout. We are now struggling and in the backlog of universal credit applications. DH who is highly qualified and vast experience hasn’t even had one interview in 9 months of applying for jobs. He is not the only person we know struggling, our friend who works in recruitment has also told us things are really hard atm.

During this time we’ve had unexpected house costs, 2 floods, car that we owned outright packing up so needing to buy a new one, kids went through growth spurts and had to buy all new uniforms and replace shoes faster than we ever had before, school trips and so on. Plus mortgage and other bill increases.

I am with your DP on this, in this climate I would absolutely er on the side of caution with everything.

I was thinking that, they will dwindle pretty quickly with insurance etc being paid from them.

OP, how much do you have in savings?

About £80,000 combined , with £50,000 earmarked for any future move

Sorry missed this earlier, the Mortgage isn’t £1900, that’s the total of the Mortgage plus utilises/council tax etc. Mortgage more like £1400