Moving House advice in current climate WWYD

[FridayThirteenth]

Namechanged so I can post more detail.

Firstly, I know nobody has a crystal ball so it's impossible to really say. But I'm feeling quite nervous about our situation and not sure if I'm over reacting (DH thinks I am).

So, we live in a lovely flat in a lovely area of SE London, that is starting too become too small now we have 2DC. Already extended to max capacity. Unfortunately we had some lingering issues with the extension (eg leaking roof) that we have had to put right before we could consider going on the market. We're now at the stage where we could sell without worrying about surveys etc.

However the plan was to wait until Spring as a better time to sell and it enables us to save a bit more of a nest egg in the meantime. Our fixed rate ends in August so that's really the motivator for sorting it out before then.

Obviously over the past 6 months or so the property market in London has cooled hugely. As we are upsizing this makes me worry. We can afford to pay more on a mortgage, but I've just read some really helpful advice explaining exactly why borrowing close to your limit on a low rate is a really bad idea, and why paying higher interest on a smaller lending amount is better even if you pay the same amount each month overall (particularly if you overpay).

So the quandry is what to do. Do we bite the bullet and try to sell now in the hope we get ahead of prices tanking?

Or do we wait until Spring and accept a much lower offer, higher interest rates (potentially) and maybe not much on the market to choose from.

With either option the risk of coming to the end of a fixed rate mortgage 5 years down the line with higher interest rates and lower value property is a real possibility (or maybe I am all doom and gloom?). I know we can try to mitigate this as much as possible but we need to add £150-£200k to our mortgage to manage to upsize and so I'm getting fear.

Should we just sit tight and live in our cramped flat instead?

Or should I listen to DH who says we just have to go for it in the Spring, make sure we can still save a little/overpay each month and deal with the situation 5 years down the line at the time as it may be fine?

I'm so terrible at making decisions at the best of the time, and opinions and wisdom would be helpful!

You're in a good position imo, you can afford more, you can overpay, presumably you have equity too. I'd move IIWY but I'd probably put it on in January - you want to move by August so that's plenty of time

Thanks bad tempered. I’m 36 and DH is 40 so we’re not that young, but hopefully wages will continue to go up.

I remember that 90s and my dad having to take on a second job as a taxi driver in the evenings to make ends meet when rates when crazy, so I suppose I have in my mind how situations can change. At the end of the day, our house is our kids security and I don’t want to put them in a precarious situation

Is the next move a forever move / somewhere you plan to be for 20 years?

Following.

We fixed for 10 years. We did it because it sees both our children through secondary education knowing exactly how much we have to pay each month. I don't think it was financially savvy of us and wanted to change my mind the second it was too late.

Yes the next move is definitely very long term (probably not forever as I still dream of retiring by the sea!)

We've fixed for 5. The interest is a lot higher on the 10 year deals so I felt 5-years was the sweet spot. Long enough to see us through Brexit but not long enough for the associated high interest rates.

OP, if the next place is a long term one and you'll have a good LTV, would it put you mind at rest to fix for 5, 7 or even 10 years? Do you know what the monthly repayment would be?

I think for me it's better to stay put & wait it out a bit.

I think we will definitely wait until Spring now.

I hope you are right Jojo and that 5 years is long enough to see out any Brexit-related fall out. I don't know what the repayment would be until we know what we sell for and buy for, but I'm hoping we can put down 25% deposit (if not more) so that should hopefully get us reasonable rates.

In a similar boat! We got a good offer for our smaller flat and negotiated a good price on our next one which meant we aren't at the top of budget as the market is falling. It felt like a good situation between the two IYSWIM.

All my fingers are now crossed for all the mortgage stuff, 12% stress testing . We will go for a five year fix in the hope that will ride out Brexit. Although I remember going to work aboard in 2008 hoping by the time j came back in a few years the financial crisis would be over!

All you can do is weigh up your options best at the time, and remember it's your family's home and life, not just about the money.

Well, the impact of Brexit will last a lot longer than 5 years but I hope it’s long enough to get us through the initial mess. I dread to think what interest rates might be doing by then.

In your shoes, I’d have a look at mortgage rates and what repayments would be if you spread them over as long as poss (you can overpay anyway). With a decent deposit, you might find the monthly payments not that terrible.