To not want to borrow maximum amount? Mortgage with DP

[LuDa4]

Can I ask for views on this please.

DP and I
Mid 30’s
1DC, not having more
Joint earnings - c.£65k
Joint monthly take home - c.£4200
No other debts or car payments etc
Deposit a c.£150,000

We can borrow up to £380,000 but would look at needing £250k which would mean a monthly Mortgage payment in the region of £1300-1400.

DP thinks we should push ourselves and get as good a house as possible within the budget.

I am more cautious and think we should leave some breathing space and be a bit more cautious.

He says the banks won’t lend us what we can’t afford.

After mortgage/bills, I think we will have around £2000 left each month not accounting for food.

Any thoughts on what we should do?

DH and I are super risk-averse and for both of our houses we have kept significantly below what we could borrow. Our second mortgage was a few hundred less per month than you are proposing to borrow OP on combined salary of x1.5 what you and your DH are on.

We overpaid when we could and paid our mortgage off 5 years early. This left us with the equivalent amount to support DCs at university so minimising their loans which will help them financially throughout their lives. We were also able to have a slightly better lifestyle.

Of course part of me still regrets not pushing ourselves further and the fact we see peers living in brand new 4-bed detached houses does make me a little green-eyed. But, the larger part of me welcomes the financial security we had and now have.

Edited for typos

"Just because you can, doent mean you should"

There's a lot to be said for borrowing less, overpaying and being mortgage free while you're young enough to enjoy it :)

Myself and DH had the same dilemma 20 years ago. We knew we wanted children so opted to go for what we could afford on one salary rather than two. So glad we did. When we moved in I was pregnant with DS and whilst on maternity leave was made redundant. If we had pushed ourselves, we would have lost everything. Now 20 years later, we were able to overpay on our mortgage and just last week, we paid it off.

Thanks everyone for the replies, all valid and reasoned points.

I will sit down with DP later to discuss further. We need to find the balance between a house which is sufficient for our needs whilst not being too big a financial burden. Prices have gone silly in the past couple of years for what we’d ideally want, although a lot of houses are online for months so we can always offer below I suppose.

Back in the very late 80s, lots of people lost their houses when the interest rates when up to about 15%. Could you afford your monthly repayment if your interest rates doubled? If you can’t, don’t borrow that much.

@TarkadaaaahlingI work in mortgages. Not a specialist lender and we will now lend 6 times income on that salary. Madness I agree but we are doing it

Agree that it's madness. What's the plan when unemployment rates rise further and the default rate rises, then nobody can afford to buy the expensive houses that need to be sold? What if there are mass layoffs due to AI? Is your company planning to rely on taxpayer bailouts?

Houses are not an investment. They have only really risen in cost (not value) due to banks wanting to lend as much as possible for as long as possible.

I can't believe we've learned nothing since 2008. OP sit down with your husband and watch the big short. If that doesn't convince him not to over-borrow, then nothing will.