Mortgage advice

[patternsg]

Hello,

This might be a stupid question but we are looking to move & in order to do so we need to borrow more money. On one hand the cost of living crisis is terrifying but then prices keep going up & we need more space. How do you know what's a sensible amount to borrow? I'm petrified we are moving at the wrong time, etc.

What we need would take our repayments to 28.5% of our salary. Our salaries still have room to increase & we are out of the expensive childcare years.
We are looking at cheaper properties so we have the cash from our equity to do any work/give us a bigger savings buffer.

It really depends how much you earn and what your other commitments are. If you are paying 30% of 300k there should be loads of scope to economise elsewhere, not so at 30% of 25k.

We were paying about 20% when we moved here and that was very comfortable. It’s lower now and I often think we could easily have spent more in retrospect.

It would leave us about 4k a month. don't have any debt.

Sounds more than safe enough for me then.

thanks @Asdf12345 it feels ok on paper just it's such an uncertain time at the moment so who knows what the future holds.

On the plus side inflation could help erode the value of mortgage owed over time (assuming your wages keep up with inflation).

On the minus side you need to think about how much of an increase in mortgage rates you could take if they go up.

Also consider energy efficiency rating of the new property. If it is much better than current that could save you up to hundreds a month given energy prices (and vice versa).

If you can't manage on £4K a month the rest of us are fucked

Seriously though it's good you're thinking about this.

Would you feel better if you saved up a bit more of an emergency buffer just in case if unexpected costs?

On the minus side you need to think about how much of an increase in mortgage rates you could take if they go up.

this is what is worrying me. I'm planning to fix for 5 years & save/overpay during that time & hope they don't go interest rates don't go into double figures.

Also consider energy efficiency rating of the new property. If it is much better than current that could save you up to hundreds a month given energy prices (and vice versa).

We are looking at projects & ones we have seen are not great currently but we would put in new windows, new boiler, etc & we have actually gone for something smaller than originally planned to reduce costs.

If you can't manage on £4K a month the rest of us are fucked

I hope I don't sound insensitive.

Would you feel better if you saved up a bit more of an emergency buffer just in case if unexpected costs?

It's whether we wait a few months and save up more but will prices keep going up.

Would you feel better if you saved up a bit more of an emergency buffer just in case if unexpected costs?

It's whether we wait a few months and save up more but will prices keep going up.

In the long term yes house prices will continue rise. In the short term, who knows.

How much available credit do you have if the shit hit the fan?

by credit do you mean cash?

@patternsg

by credit do you mean cash?

No I mean credit.

If you had a large emergency fund in cash plus a 0% or low % credit card with a high limit then you'd also have that to fall back on if needed.

I have a credit card with about 16k limit on it for emergencies.

@patternsg

I have a credit card with about 16k limit on it for emergencies.

Yeah I don't think you need to worry!!!

I'm with other PP's OP i think you are just fine, but I do understand the anxiety. I am fortunate that I don't have to choose between heating and eating, but feel guilty that i still feel a sense of panic about our finances, which i hate because we are so much better off than many people.

I think you sound sensible not insensitive at all.