AIBU to ask for realistic mortgages and incomes from average/middle income houses?

[SmallHouseEnergy]

Live in an affluent area, but in the smallest houses (3 bed end terrace, good sized garden. Bedrooms are all small, 2 singles and a small double. 1 bathroom, 1 living room, 1 kitchen - again, small).

1 DC, me and DH. Hoping for another DC asap. TTC.

We have plenty of space to extend massively to side but astronomical costs for extensions so may not for a long time.

DCs peers all have big houses, 4/5 bed, massive size. One even has a mansion and pool.

We have been and got quotes for extensions, and also figures for what we could borrow on a bigger house. Being told we could go up to £400k house which seems like insanity. We earn £85k for reference joint, per annum. Current mortgage is smallish, £160k.

I am after some perspective for average/middle earners outside of London please. If your household income is £70-90k per annum, what’s your mortgage and monthly payment roughly? Does it work? Or are you stretched?

we are torn between doing a medium extension and adding an extra £60-90k mortgage or moving to a bigger house possibly an extra £120k for next ‘level’ up not even more bedrooms but just an extra bathroom and a dining room, with a decent garden still. Aib

In a large village in the SE, 5-bed terraced townhouse bought for £310k 8 years ago, now probably worth around £330k. Think have about £130k left on mortgage and pay £915/month.

Joint income is about £80k. We are four years into a 10-year fix mortgage at 2.75%. We could probably afford somewhere more expensive and nicer (although our house is "five-bed", because it's a townhouse it doesn't have the traditional layout nor living space of a five-bed) but are however trying to save enough to pay off the rest of the mortgage by the end of the fix so we have more disposable income and freedom by the time the DC are mid-teens.

Start overpaying your mortgage by the amount you’d pay if you upsize - you’ll soon see if it’s manageable or not. I’d overpay for the next couple of years until you get post-maternity leave and big childcare bills and then look to move with a bigger chunk of equity….and confidence you can afford it.

For the extension, if you’ve got some rough drawings you can always ask an estate agent to give an estimate of the value it would add to the house if it was complete.

We bought our first house this year. Joint income about 90k, 1 primary school age DC. Mortgage about 330k for 3 bed detached in the south, paying 1750 per month. We can pay the bills each month and can enjoy life but can't afford to go on holiday and if a big expense comes in such as car repairs, that will need to go on credit card and then we have to cut back. I am part time so have more earning potential once DC is older but for now I wouldn't want to be much more financially stretched.

£75k income. Mortgage is £750 pcm because we fixed for 10 years at 2%. That's about 16% I think?

We could move - 2 adults 1 child - but we don't want to add another 120k (would sell for about 280k and need 400k for detached) as it would double our payments.

£50k household income and mortgage of £1002 (not a slipped finger). Have just less than £200k mortgage on a £370k house. The deposit was part flat sale and part inheritance.

Honestly OP I would stay where you are and wouldn’t even extend. You have a three bed house, each of your children will have their own bedroom and that is more than good enough.

We earn £75k combined and our mortgage payment is £1150 a month. We had quite a bit of equity and took a 20 year term to naturally overpay from the start. I would not want to pay any more than that and we don’t even have children.

Life is so expensive now, you’d be much better off investing and building wealth rather than sinking everything into a single asset. Do not play the keeping up with the Jonses, you’d be amazed at how many of them are living paycheck to paycheck.

Thanks again all. I know the sensible option is to overpay, (we should have been doing this for the last 5 years, stupid and an oversight on our part due to neither me or DH making the plan to ring up and actually overpay!) and see how we are after 2 years. Rooms and house is technically big enough for now, and smallest room is a box room but fits a single bed and small wardrobe so fine for now or even for 5 years. I just would like more space. Extension works out cheaper if it all goes to plan (have heard horror stories on here re hidden costs) but I keep thinking is it worth extending a terraced house? Especially if the house it’s attached to isn’t as well maintained!

Our income is a bit more than yours we went from a 350k house with a mortgage payment of £1200 a month to a 675k house and our monthly payment is now £2100. We still live the same lifestyle we had before just sometimes opt to not save one month if we are running low. We do have a big savings pot from our house sale which we like to top up most months.

NC just for this.
Same income as you, mortgage of £800 pm but fix ends next year so based on rates now that will go up by around £200. 100k left on it. We save anything from 400-1000 each month, but we are also having to put lots into pensions as we neglected those for years.

Have you had quotes for that possible extension? We were due to add a bedroom + ensuite in our loft (no dormer, just velux windows) plus knock down a kitchen wall. Quotes for that, excluding the cost of fitting a new kitchen ranged from 60-85k. A year ago the quotes were 8-12k cheaper. Prices for building work are bonkers and ours wouldn't have needed any actual extension.

We decided not to bother adding that kind of stress and rejig things to make the house work better instead. I like a pp motto "small mortgage, big life"

85k combined salary, £570 per month. 60k left on a £100k mortgage, (£120 k total for house). 3 bed semi in scotland. No plans to move but we have a decent sized garden and could extend and build a garage/4th bedroom. But probably won’t 😬

Have you had quotes on that? We are doing similar, and quotes came in at well over 100k for just the extension. The kitchen, flooring, bathroom etc are on top.

If you are a terrace or semi you will also need PWA x 2 which can easily be 2k

We are buying our first home. Around 90k combined income and we were told we could go to 425k house price wise. We are going through the mortgage process for a house costing 355k and with our very small deposit the mortgage will cost us around £1800 a month. Our plan is to overpay as often as we can. We are older and have stretched ourselves a little so we can give our two dds space as they are growing up, I don't think they will be able to move out at 20 like I did. Apart from a car loan for a couple more years and a very small credit card which is shrinking, we don't have any other debt.

We're in the income bracket stated in the OP. Mortgage is £600pcm on a small 2.5 bed semi. We have chosen not to increase/extend our mortgage for lots of reasons. We are currently not very rate sensitive which is very reassuring in the longer term. If you don't borrow much you're less affected even by quite significant rate changes.

Increasing the size of your house usually doesn't just increase the mortgage, but also the bills, the impact of which a few people I know hadn't researched well enough.

People talk about the nursery years as the most expensive and that you'll have more spare money after they start school, but IME every stage has its financial demands. You're faced with having to holiday at peak times, and we do like to have at least one holiday every year. Extra curricular activities get really expensive as they get more advanced - specialist equipment, tours/trips, overseas competitions etc. The university years creep up quickly as well. We now have one at university, and in this income bracket they'll only have access to the minimum loans, so that's a minimum of £5kpa that you're expected to chip in as a parent.

I have a colleague who has a large house in a smart area, but has to track every penny. Any unexpected costs means she has to find something else to cut down on that month. I know it's the financially savvy thing to have a bigger house and accrue equity, but I absolutely could not live like that.

how much do extended terraced houses in your area go for?

Usually people don’t make their money back on a house extension unless you do a lot of diy or make a very nice kitchen. It depends a lot on the area.

I would probably put up with the house as is for the next 5 years whilst your DC are small and then make the bigger leap then.

We did go for it and made the leap from a 200k house to a 450k house before we had our second DC but the living room in the first house was absolutely tiny, we would not have fit in it with 2DC. It isn’t just the mortgage that went up, all the bills are more too, the more expensive house is older and needs more costly maintenance - boiler, roof repairs, any room we want to decorate needs re skimming. The kitchen is older than me.

It worked out for us because my DH’s salary has increased substantially since we took the plunge. He was really early on in his career when we moved so he had a lot salary growth quite quickly. If it wasn’t for his salary growth I wouldn’t have been able to work part time after DC2. Frankly working full time with the childcare costs meant we only just broke even with the mortgage, bills and everything else.

I’m still stinging from the £2.5k monthly nursery bill for 2 DC before the free hours came it. We could have got a lot holidays for that and we had so much more spare money once the older one was at school.

University aged children however I am dreading financially 🤣

Ah, we only had one in nursery at a time. I do stand by extra curricular getting spendy when they get good/committed though. It's hard to image when they're small and just messing about with things, but at the moment one child's extra curricular activity is over £400 per month, and that's before before necessary specialist equipment (well into four figures) and a tour this year.

£100k between us. £340k mortgage but £100k equity (as it stands). Monthly payments £1500. Very affordable for us.

That’s nearly the same as student house rent!!

I think you are being a bit silly OP & you sound like you are desperately trying to keep up with the Joneses.

You have a 3 bed house. Currently 1 child. You don’t really need an extension or a bigger house.

noted you want to drop to part time & have another child so it seems really silly to overextend yourself just so you can compete with DC’s friends parents who have bigger houses.

the size of the house doesn’t matter, its the love that is within it

Salary of £94k, mortgage is £860 a month, house worth around £230k now but was £175k to buy, loads needed done! Around £100k outstanding on mortgage.

Salary of 60k, payments 700 per month, 90k left on mortgage ( house was 140k, could have borrowed much more but we loved this house )

Ive had some very good reality checks on here. @SensiblesalIt is a little bit of that plus the fact me and DH earn ‘good’ salaries for our area but nowadays it doesn’t seem to go far. Sometimes I feel a bit despondent, and wonder how we’re in a smaller house than our parents who earned far less. It feels like we should have more to show for our hard work. COL and housing in UK, I know.

I know we need to stay put. For those asking re extension - quotes so far are from £40-70k plus kitchen bathroom utility which I’m thinking £30k. So probably £70-100k all said and done.

We would have to stay put for at least 15 years for it to be worth that, taking us to late 40s/early 50s.

We may need to look at staying, no extension , for 3-5 years as a pp suggested and then revisiting!

@DaisyChain505@DaisyChain505 Small mortgage big life - seems most sensible I just need to find a way to make peace with it

We take home a bit under 100K together in a HCOL area. Had the same debate as you years ago and ended up moving 5 years ago when the kids were 4 and 8. House was £380, mortgage was £1200 but then we had the interest increase so it’s £1450 now. We are ok but things keep getting more expensive and some months we go backwards. My daughter has an expensive hobby, food keeps going up, the bigger house costs a fortune to heat (detached houses are so much colder than terraced!), we had to replace the windows - double the windows of our old house so that was £15K. We don’t regret it - our kids were sharing and that would have been really hard by now - but it’s definitely more of a stretch than we’d thought.

We are on the higher end of your salary bracket, two bedroom house, but only having one DC. Mortgage £700, almost paid off. We prioritise freedom and travel over a bigger house but we would need one if we had a further DC.