Would you move in this financial situation?

[Dizzymisslizz]

Due to circumstances I’ve been left in roughly this position:
Salary 190k
Mortgage £630k, currently fixed but expires at end of year so will go up. Likely to be £600k debt at remortgage point.
House value £1050,000
Childcare £1.4k pcm
Savings 10k
Age 47 and mortgage runs til 70
i love the house, the children love the house, they’re settled at school / nursery, friends nearby, great childcare set up. Area seems to be in high demand so house prices round here going up.
i can afford repayments but the whole thing feels very squeaky. Won’t be any breathing room or flex for disasters or chance to do work on the house etc.
SO - could sell but my life is v much here and selling is expensive. And so much upheaval after a rocky few years. Also feels impossible as would mean school places, losing childcare etc.
but is it worth it just to feel less stressed about it all?? WWYD?

how much are your monthly payments out of your income?

I’d do it.

You need to increase your savings though, so the safety net is a bit bigger. That will probably help you feel less stressed about it.

Your mortgage should still be about a third of your income, which is normal.

Currently £2800 but could go up as far as £3400 if rates stay the same. (I do have £1k pcm child maintenance in addition but nervous of counting that as can change).

do it as in stay?
I agree about savings!!

Oh sorry you prob mean you’d move

Worth bearing in mind the costs of moving, which could be easily £50K. Which represents 12 months of mortgage repayments.
How long will the childcare payments be for?

Yes agree about cost of moving. Childcare payments at this level for next 2.5 years, cheaper after (though children expensive in other ways!!).

You can’t move though can you?!

You have curated your children’s lives around this location and home!

I know it sucks and I bet the house is not even that amazing compared to what you can buy outwith the area but I think for now you just get on with it

Moving would cost a lot and in all honesty just say that you moved and your new mortgage was 1k a month less - well what will 12k a year do for you? Probably not a lot!

I was in the same situation as you but when I looked at what I’d save I thought it wasn’t worth the aggro

I mean how much stamp duty have you paid? Then you’ll have to pay it again etc

I’d stay. I don’t think the mortgage sounds problematic given your income and childcare cost.

How much would you realistic save by moving?

I don't think 3k of 9/10k is that significant tbh

thank you!! Seems like it’s not totally impossible or crazy to stay.
I guess the mortgage reduction could go into savings, which I really need to build up - but does seem hard to square with how big the disruption would be.

Other views v welcome though

Just stay. If something bad happens you can sell, you’ll have equity in your place and you can always rent somewhere. Can you afford income insurance?

Think I should look into mortgage protection as I don’t have it currently

As you’re in an area where you could sell pretty quickly I’d be inclined to stay and make it work. If it doesn’t you can sell.

How long is the term of your mortgage- could you lengthen it to reduce monthly payments to enable you to build up a cushion? Long term pain for short term gain.

My understanding is that you can reduce the term of your mortgage at any point (I assume subject to affordability). So you wouldn’t be committing yourself to the extended length.

And are you factoring in bonus payments? If they are additional they can support the nest egg growth or go into pension (though I know they’re not guaranteed).

Your childcare costs are about to drastically reduce, I'd stay if I were you.

Stay. Childcare costs (at that level) are temporary and the additional you may save in the short term would be eaten up by stamp duty and moving costs.
Sounds like you’ve built a nice life, sometimes you just need to put up with temporary higher costs for better long term gain.

I’d stay. To earn the salary you have you need bomb-proof childcare. It seems you have that right now. Don’t mess it up or your life will be so much harder.

Your monthly take-home after tax is £6,333.

Take off £3400 for potential mortgage leaves you with £2900ish, then childcare and ACTUAL ESSENTIAL bills, how much are you left with?

Childcare years are TOUGH but your figure AFTER your mortgage is paid is still waaaaaay more than my gross, it's up to you if you can make it work until dc starts school.

I never understand the can’t move because of family, schools etc. Surely you can downsize locally and keep all that the same? We’re about to go from £1.4m to £695k with no mortgage less than 5 mins drive away so everything else stays the same.

it is mega expensive to move, I’m even having to pay £7k just in early replayment fees and stamp duty when I only paid the last (huge amount as had another property) lot 5 years ago.

Will be worth it to save c£7k a month in mortgage and reduced bills etc for us anyway.

For you I’d say stay put for 12 months then review. Anything could happen.

I can't see why you'd move unless your job is very precarious and you wouldn't be able to find another job with similar pay readily if you lost it for some reason.

Is your income after making pension contributions? How much pension do you have and do you make contributions at all now?

You do need to build up a savings buffer in an ISA so you have access to emergency funds. On that income you can probably max out the annual ISA allowance, then I would look at mortgage overpayment or pension contributions for the surplus.

I'm risk adverse so I'd probably move if you can do so and still keep your job. Do you WFH at all? If you do WFH I'd bite the bullet and move whilst your DC are young. You could get a house costing a lot less so reduce your mortgage. It gets harder to move them as they get older and develop friendships. When they are young they adapt far more quickly. Debt worries me to death so my views are biased by this. You need critical injury insurance and a policy that will pay your mortgage if you lose your job. It's really well worth paying for that piece of mind. Personally I'd pay some of the savings off of the mortgage. You'd save so much interest payments. Also do you really want to be working until you are 70? I'd also suggest you start saving for kids uni places from the time they get to Year 7 as on your salary they wouldn't get much maintenance loan.

Can't edit a post twice apparently...

Take home minus £3400 mortgage minus £1400 childcare PLUS £1000 a month still leaves you with over £2500 a month for everything else. That's still more than my gross before I pay any bills. Plus you have £450k in equity should disaster strike.

Once childcare bills drop in 2.5 years you'll be back up to 4 grand a month with an extra £100k equity in the house. I think you'll survive

My take home after tax and 10% pension is more like £8.6k so a bit more than you estimated.
good point about childcare costs going down - though will always be expensive due to work.
i do have a very very good childcare set up here and need that flex!!

I have critical illness cover through work and am going to look into mortgage protection. Savings only 10k, pension currently £300k. If contributions at 10% from now then projection looks okay.
cant reduce term unfortunately as already runs til age 70.