Would you take on the mortgage?

[CheckofSense]

We’ve found a house we love, currently renting. We’ve been declined for a high street mortgage due to some 5/6 year old credit issues. Everything done well for 4 years.

We can get a subprime mortgage fixed for 2 years when we can switch to high street lenders.

Due to DHs age, if we don’t do it now, we will struggle as he is 51.

High street would have been £1690, but sub prime is £1930 pm.

My income is £3400 pm, DH is £2300, £100 Child Benefit, Board from DD £200pm (not keen to budget this but unlikely to change in the next two years).

Bills account:

Category
Bill Type
Amount
Housing
Mortgage
1,930.00
Utilities
Gas & Electric
214.00
Utilities
Water
54.00
Council
Council Tax
182.00
Media
TV Licence
14.95
Communications
Mobile phone
42.08
Communications
Mobile phone
176.82 (DD pays £80 of this)
Fitness
Gym membership
53.28
Fitness
Gym membership
53.28
Subscriptions
Amazon Prime
8.99
Subscriptions
Amazon Music
10.99
Subscriptions
Netflix
12.99
Subscriptions
Disney+
8.99
Entertainment
National Lottery
42.00
Insurance
Pet insurance
103.63
Savings
Premium Bonds
100.00
Finance
Home insurance
15.77
Health
NHS prescriptions
11.45
Health
Opticians
18.00
Family
Account fee
15.00
Savings
School lunches / bus fare
90.00
Finance
Retail finance (DFS)
30.00
Weekly (avg monthly)
Child pocket money
43.33

Total: £3275.00

Unfortunately our pet is likely to pass soon, so insurance will stop and we can cancel the lottery payments if needed. Gas & Electric likely to go down now we’ve cleared a significant debit balance and new house would be more economical.

This leaves all of DHs wage for food, petrol, savings and discretionary spends.

My original post says that this leaves all of DHs salary for food, petrol and any other discretionary spends. This is what we do currently. My salary into the bills account paying all of those bills listed, plus £1k into savings then DH gets paid weekly and we use that for food, petrol and any other discretionary spends. We do put minimum £100 pw into a separate savings too, but this isn’t true savings as we use it for annual car insurance, any holidays, Christmas etc.

Don’t get all the comments about your spending

if you’re saving £1k a month what is a few lottery tickets and music subscriptions

people only need to curb their spending when they can’t afford it

that being said I wouldn’t want to tie myself to such a huge mortgage on your wages not at the ages provided. But if that’s the house then that’s the house and better than renting.
you’ll be sat on an asset that will increase for retirement

people only need to curb their spending when they can’t afford it

I disagree. Why spend more than you need to? If you can get something for £20 a month, why pay £40 a month for the same thing? Why pay for things you're not using? The OP has 3 media subscriptions and a TV licence. Do they really watch all of those? Why not cancel a couple of them and watch the other and then swap when you get bored of it?

Few people have so much money that they don't need to think about what they're spending and no-one knows what's around the corner. If you continue to spend 'because you can afford it' you're trapped in a high cost lifestyle and will have no resilience if your income reduces or stops for whatever reason, because you don't have sufficient savings to fall back on. You're also at risk of being forced to continue working when you want to retire or reduce your hours. If you had a better pension or more savings, you'd have the freedom to choose to stop work or work less if you needed or even just wanted to.

I'm sorry, I work in this area and have to respond to this.

As long as you have been honest on your application for income protection then an insurer will not 'wriggle out' of paying. In fact in 25 years of advising in this area the only client who was not paid out had deliberately lied to get cover, and then tried to claim for said illness 2 months after commencement.

Income Protection is one of the most important plans available as its the most claimed on.