Would you consider doubling your mortgage (in cost per month) ??

[mosschops30]

We really need to move. Live in a 3 bedroom house and have no.3 on the way. Although we can manage where we are its not ideal.

So weve been looking for a while but because when we finally move it will be pretty much long term, as we know we will have children at home for at least 18 years, so the next house will be our final move before retirement, so weve been pretty fussy, we know what we like, what we want and where we want/need it.
However all the houses we see have some little niggle, apart from the ones out of our 'price range' (we had said no more than 250k.
The ones we really like are 320k, which would mean our monthly mortgage payment would double and we would have to increase our current years left (16) to 22 years, although we would still only be 56 and 58 by the time it was cleared.

Would you do it? Or is it too much and too risky? It would stretch us but not so we were living on the breadline (i think)

I would go with the best house with niggles - put the niggles right if possible and leave enough money to live comfortably.

Who know whether we will have the same mortgage rises as we did in the late 80's where the rate was 15% - could you afford to pay the same mortgage at 10% as that is what it could well be in 5-6 years time? Although that again is guess work on my part.

I think if I was in your position I probably would - would you have enough left at the end of each month to allow you to either be able to save?

Are you both in reasonably secure jobs?

Remember to cost in increased running costs - fuel, insurance etc when looking at your monthly budget.

They are niggles that cant be put right ivykaty - things like shared drive, or wrong area or overlooked by other houses at the back etc.
I know what youre saying about the interest rate thing, but I suppose its a risk everyone has to take, either than or we stay in the same house we've lived in for 10 years and never move, which does not sound appealing. We are pretty safe right now though, our house is nice, in a nice area, central for our chosen primary and high schools (but so would new house) and our mortgage is less than half what our house is worth.

mutt I have saved £300pm for the last 7 months, so I know I have my half to put towards new mortgage, dh earns more and has more disposable to, we would be a tight ship but not beans and toast every night

no absolutely not

as has been said, buy the house with the niggle.. and if it is a niggle rather than an 'ohmygodicouldnevereverevereverlivethere', then you should go for it

buy something smaller/cheaper with the potential to extend perhaps

or can you look at extending where you are or doing a loft conversion?

I don't think, in your position, it is a risk you have to take. I'd only do it if I could lock myself into an affordable fixed rate for, what, 10 years? Presumably your childcare costs are also going to rise?

lulu we are in smaller and cheaper, unfortunately we are in a position where its a big step or no step!
We cannot convert the loft (what the hell would I do with the stuff thats up there ) and extending is something we have looked into but again doesnt really work (if we went sideways it would make us a semi rather than a link detached, and dh would lose the garage which he's not prepared to do).

I think the main thing is that we know this would be a last move, we dont want to move and then have to move again in 5 years time, it seems pointless.

yes mutt it is a cert, but then so are other things - without sounding awful inheritance, reduction in childcare after 4 years, pay rises likely for me (am bottom band of nursing atm), possible pay rise for dh although he earns plenty now.

said our childcare is actually going to go down as have 2 in full time school and I am going to change my hours so hopefully will only need one days care a week and may be able to talk IL's into that , but if not tis still cheaper than £500pm we were paying up til this august

I wouldn't - but our fixed rate from 5yrs ago has just come to an end - and our monthly payments have halfed. When rates go up again then it will go up.

I know you can afford to double your mortgage now, but can you afford for it to double again in the next few years?

Personally wouldn't go over 2x our joint income - but we were both around when interest rates were 13% ...

I think it you can either lock in to a deal for 10 years or so which you can afford, or if you can afford things if the rates hit, say, 12% for a few months...

If that would shaft you backwards then I wouldn't do it

My PIL advised me and DH to buy the most expensive house we could afford as 'it gets easier'. This has worked for us. You just need to make sure you can afford it and all your other bills and a few uncertainties.

TBH

if in your position - I would sell the house, rent and in 4 years time buy again

why do you have to move now? can't you wait until the baby is a bit older?

the baby can share with you for a bit and then can your older two share?

seems like doubling & extending the term of your mortgage is a huge double whammy

The state this country is in there is no way interest rates can remain this low in the long term.Taxes are all going to have to rise interest rates etc etc.In the run up to the election this current wave of money being pumped in coupled with low rates is going to prop prices up and in some areas cause them to rise a bit.Once the govt start trying to re build the balance books prices will fall again (imo)and repossessions etc will start.The only reason this hasn't happened so far is because QE and low rates have helped many people out.Don't get in out of your depth unless you have some back up.Doubling your mortgage atm is madness

Yes have calculated the 12% rates and its shocking I think we'd have to do interest only for a bit (which is actually what most of our friends are doing now, although god knows why ).

lulu we dont 'have' to move now, we can easily manage in this house and yes the two boys can share and dd will have the little room, this is the plan at the moment. But we dont want to live like this forever, 5 people sharing one toilet for a start is a nightmare (its bad enough now) and we just feel like weve both got good jobs and earn decent wages, yet we're still living in the same house we bought 9 years ago, we need to progress into our 'last' family home

and no older two cannot share but ds (4) could share with new baby IYKWIM

What about a cheaper house that needs work or a slightly cheaper area?

no no no no no

but I have lived in a one and a half bedroomed 'house' with three children for years, one short period of struggling with my mortgage payments was enough to put me off ever being anywhere near overextended financially - I found it horrifically stressful

and there are huge benefits to having a small mortgage, I can afford a horse for example and we all HAVE to get on with one another in such a small house so it's surprisingly harmonious here!

A bigger No to considering doing this interest only.

sounds like you are moving for the wrong reasons TBH

Could you possibly leave things for a year or two, and pay off as much of your current mortgage as you can over that time. That will give you a sense of what it is like to live on less money, and then when you do move you will have a bit more deposit behind you.