Advice please - To buy a bigger property, or not to buy a bigger property

[FussInBoots]

DH and I have found a dream property that ticks most of our boxes.
It just needs renovating, but a lick of paint here, some carpet or flooring there and I genuinely think it's good to go.
We could replace the 14year old boiler system, and the electrics, but both have been checked and both are okay.
Bathroom and kitchen are very outdated and will be changed when we could afford it
This property has an outbuilding where my husband would work his 2nd job from.
My question is, we live in a semi detached 3 bed that we completely renovated, we've maximised every square inch of the property to use for our family of 5s needs. (14,11,8)
Do we stay where we are, with a £230pcm mortgage which I'm overpaying at the moment at £400 extra pcm, husband is also paying an additional £300pcm for his studio.
Or, do we buy this outdated property, that is our dream size, with the additional outbuilding.
It would mean or mortgage payments would go up to £1300pcm and we'd be tied into a mortgage for 25years
Whereas with the current over payments on our current mortgage, we could be mortgage free in 8 years
We keep flitting from, you only live once, to, we love having disposable income and holidays.
The kids would absolutely love the new property once they've got they're rooms decorated.
We saw the dream house yesterday, and it was lovely, and looks like we're putting our house in the market tomorrow to be in a position to put an offer in.
Any and all advice welcome, sorry, I knownits a long post x

Key question here -how old are you and DH?
if you will be working and able to pay the increased mortgage for the next ten years, when you factor in uni costs etc, then IMO go for the dream house.
it will be a good investment, and you can downsize when the kids have flown.
can your DH have his studio in the new house?

So you are paying £930 currently and will go up to £1300 for a tons better property, I would go for it so long as the location is good.
And so long as you are cool about dh working from home and he doesn't need to drive to work and back for his mental health.
And so long as you have security in your income.

Yes, DH and I are both in stable employment and are 36 and 42 years young, so still feels like a long way off retirement just now.
The house we're looking at has tons of potential and with a little bit of modernising it should increase the value easily and quite quickly.
DH will be able to convert the outbuilding to his studio pending council approval etc, but that would be the plan!
We will be porting over our current mortgage balance of £50k which has 2 years left on a 1.64% rate (I know... we haven't seen a rate that low in what feels like forever) and we'd be getting an additional £175k-200k ish (depends on what our house sells for and what the vendors agree to) on a 4.5% mortgage.
Just feels scary giving up a painless £230pcm mortgage for a chunky £1300 pcm.

If you can afford it I would definitely do it.

I personally wouldn't as I'd prefer the disposable income and smaller mortgage but you need to do what's right for you and your family.

Could one of you manage the new mortgage and bills on one wage?

This is a really good point.
We could... JUST afford the bills on 1 wage if needed and we would have to sacrifice other things, so it would be felt if one of us loses our jobs etc.
I will need to start looking into insurances to cover us for loss of income with a mortgage this high I think

Being mortgage free has given me much more freedom, I'd stay put.

With all costs constantly increasing and your vagueness about when you would be able to renovate etc, I’d play it safe, stay put and enjoy lots of disposable income and being mortgage free before 50!

Myself and DH are the other way round and I kind of wish we’d started smaller and cheaper tbh and not have the £1300 mortgage

Its a tough one

Thank you, what do you find the hardest thing about the mortgage payment each month?
Does your net income allow for any disposable income, or is it all on the house?
What would you say is a reasonable mortgage payment for you and your family?

I bought the big house. It has 6 bedrooms, I have just ripped out the entire downstairs to replace the heating electrics and kitchen. All the bathrooms need sorting. It’s been nothing but a headache that dominates my thinking all of the time.

I think it’s worth it in the long run (but only just!), but my eldest is only 10. Yours might have moved out before you’ve had a chance to enjoy your dream family home.

If it's a bigger house, remember to account for the additional council tax, utility bills and higher maintenance costs and add that to the jump in mortgage rates so you are making an informed decision about what you are taking on.

Is the outbuilding in a useable state for working in?

It seems very inexpensive to me but it depends on your salaries. If it is more than a third of your total income be careful. I'm ill and can't work. It could happen to anyone.
Fwiw we bought a house two years ago and it's gone up by 25%. We've replaced bathrooms and It was bought at a huge discount due to us being chain free buyers.

I’d look at extending your current property - taking on an increased mortgage which means working til late 60’s would not appeal to me

I'd be moving. Your kids could get a room each and be more likely to stick around after turning 18. Not sure if you think that is a good or a bad thing! The £300 you are currently paying to rent office space would become equity in a house instead. Then downsize after retirement and free up spends.

Easy to say when it's not my money though.

I wouldn’t. But I don’t value houses/homes like other people do!

I'd also move. You will value the space during your kids teenage years, and they are far more likely to need a home into adulthood rather than disappearing at 18.

We moved into a much bigger house when our kids were this age and no regrets at all.

Go for it! I think you'll regret it if you don't. Always thinking in the future that you missed the opportunity. So what if a few years down the line you realise you made a mistake, downsize back to what you have now. Worth the risk if you can afford the repayments. (Which personally, I don't think are outrageous for two earners).

Numbers wise what we owe is about 2.7x our income and about 25% of take home pay, so it is affordable in theory

We have 1 small child in childcare

Only run 1 car

Can afford small luxuries but not big ones like holidays every year

Doing up the house is a slow process

But DH finds his work stressful, we can’t afford it on one wage or to drop hours significantly

So I would overall have preferred a bit more flexibility and lower payment for peace of mind

But here we are and he won’t entertain moving 😂 Not yet at least

I do find money comes and goes though. Weve both been much poorer, then you do ok again. I guess that’s life!

If you believe you’ll love it, can afford, and it won’t add too much pressure then definitely go for it

The hardest thing about a bigger house which needs work with a bigger mortgage isn't the mortgage. It's the additional money you need every month on heating, council tax, water, electric, repairs and maintenance.

We moved from a terrace that we'd done up to a house twice as big which needed work 5 years ago. Nothing (apart from £2k on the roof) needed doing immediately but all the jobs are costing a fortune even when we do most the work ourselves.

It's great for the kids and we can afford it but it's literally costing us twice as much (which perhaps we should have expected given it's twice as big) - we hadn't really accepted that when we bought it.

Sometimes I think we'd have paid off the mortgage in our other house and that'd be lovely. But we moved to a better area for us as well as a bigger house so overall I think we made the right decision. Our kids are still little though (3, 6 and 8) so we'll want the extra space for longer.

Apart from the outbuilding, I'm not clear on what you're gaining?

How much bigger is this new one? More bedrooms? More living space? Garden, parking, garage?

What makes it a dream house over your current house?

Thank you, there will be 4 double bedrooms plus a potential 5th room in the attic instead of 2 big bedrooms and a box room which we have currently.
We're gaining an additional reception room and a closed off kitchen (currently open plan which i really don't like.)
It has a gated drive for multiple cars, instead of our 2 car open driveway.
The garden js 3 x the size of our current garden along with the house being detached (currently in a semi)
It already has an additional sun room attached to the back of the house which will extend our living space.
We do lose a utility room, but with a closed of kitchen, that's not as important.

The outbuilding is a garage/studio space/storage all in one, which doesn't encroach on the garden at all.
It has stunning features, although outdated we could definitely live in it straight away.

Thank you, we are trying to think of everything to budget properly, and we've learnt the hard way to always over estimate costs by at least 20% more, whatever we have left is a bonus.
But yes, this is why I posted to see views from people who have done it, people who thought about it and decided against it etc

Thank you for your reply,
I've just worked it out that new mortgage and other commitments would take us up to 3.7 times our total income, but 1x our annual is short term debt that will be cleared in the next 4 years.
Thankfully we don't have childcare anymore, but that was such a huge drain on our finances and moral! You would go to work to pay the childminder to look after your children 😔

There is no room to extend, but being mortgage free in the next 8 years is a very serious motivator