How much would you spend?

[KatnissMellark]

Deposit £100k, joint income £110k-£120kish, early thirties couple with one DC, want more (and will have to pay for IVF to do this, so could also end up with twins). Pay for full-time childcare at c£1k a month....

If you had more childcare would you have to pay for full-time childcare eventually for them as well?

Realistically I think the general rule is to spend 30-40% of your income on mortgage. So if work out what that roughly would equate to for you, that should give you some idea on what you could comfortably borrow.

It depends massively on your area as well. If you're in a cheap area and could get a decent 3-4 bedroom house for 200k for example, then that's great and if that's big enough to meet your needs then there's not much point borrowing more than that unless you really want to. If you are in an expensive area (like the middle of London) though then you might have to be willing to stretch yourself more to get a family home.

£500-600k?

We were in a similar position a year ago. Deposit a little less. Same joint income. Childcare same. Spent 425k on a semi. Monthly mortgage £1500. South East. Second child on the way. Mat leave and two in childcare when I'm back at work will be a struggle. Will be better when eldest starts school. We had a few savings that have gone on the house (boiler etc). Tbh I wish we had stuck to 350-380k top budget. Would have had a bit more disposable income for holidays, savings and things like car repairs.

My comment above should read 'If you had more children would you have to pay for full-time childcare eventually for them as well?' Sorry!

KitKat yes, would pay for childcare for additional DC, I can't forsee a situation (barring ill health) where I wouldn't return to work. Obviously if we ended up with twins, a nanny would be more efficient than three in childcare

Okay, then I say you need to hypothetically assume you are going to spend 2k a month on childcare if you have another baby. Plus estimating what you need for bills / food / car / insurances / going out / a bit of savings etc, I'm going to assume you need 3.5k a month just to comfortably cover all your other monthly costs. Based on that you should be able to work out what you would have left each month to put towards a mortgage.

Sorry not very clear again. I mean that 3.5k a month should cover all your childcare and other bills. What you have leftover you can put towards mortgage.

Would you have the same income with more children (ie you'd stay on your current hours?)

I think I'd hold back some of that deposit for IVF in your shoes and with a childcare bill of about £2k or more, then with your income (assuming you pull in about £6.5k a month) I'd have thought you could afford £2k (or slightly more) in mortgage repayments. If you put down say £75k and borrowed £500k you'd be paying about £2,200. So I'd maybe look at houses up to about £550- 575k??

Depends on the area. If you’re somewhere that a family house can be had for 200k, then I’d do that rather than stretch to a fancier house. If you have money leftover, you can save up, overpay mortgage etc.

If you’re in a more expensive area, then I’d spend more but factor in the interest rate rises and a possibility of not going on hols/being able to afford much while the children are younger.

We’re a bit risk averse so our mortgage has never exceeded 20% of take-home pay since we got together.

It depends where you live.

I would not max out mortgage just because I had loads of money. Which you do. I would look at the housing options and then decide that I can afford based on monthly outgoings.

Interesting perspectives on here. I am naturally more risk averse than DH and would like a nice affordable house and then to be able to save/splurge/pay for IVF as applicable. Whereas he is more of the view that we should push ourselves and buy an amazing house. Where we live you can buy a shitty four bed in a run down area with crap schools for c£150k, a big standard new-build thing with decent schools for £300k or a lovely one with big garden,great schools and nice features for £400-450k, but DH is looking in the £600k region which seems silly to me I think it makes sense to look in the £350-450k region and get something lovely but not ludicrous...

I'm with you. It sounds like 350-450k would get you a lovely family home, and still leave you in a position to comfortably afford holidays or not be financially uncomfortable if your circumstances change.

You are right and he is wrong! Expect falling or at very best flat lining property prices alongside rising interest rates - so nesting not investing is the reality for next property cycle. Also you might want to go PT during IVF, have longer mat leave or work reduced hours afterwards. Those (time, less stress) are the luxuries you can invest in if you buy the right house at the right price - maybe something that your DH cant see yet? Maybe his idea od luxury is another en-suite or a bigger garden which needs you both to work FT to pay a gardener etc. DONT DO IT

Tbh I've always pushed on houses.

In your case I'd probably look to spend 500k - 550k in total.

Ideally I'd look for something you can extend in the future and thus increase its value (and size) without the cost of moving in the future.

My general view is that the cost of moving is so high you should maximise each purchase as much as possible. Think how much agents fees, stamp duty, solicitors, moving etc really costs....

Reducing your mortgage by a couple of £100 per month doesn't really stack up (if you can afford it) when the result is paying many tens of thousands down the line to trade up in 5/10 years.

I’d look around 400k- 450k.
We’ve just bought, and I thought I’d have the same sort of mindset as your husband. When it came down do it I was slightly more risk adverse, and we bought a large 4 bed detatched for about 100k less than our maximum budget. Occasionally mourn the loss of the bigger house/more land but actually it’s perfect for us, and we’re not too stretched.

Another vote for not getting the biggest mortgage you can. I only start to feel secure in a house when I know we can keep it even if something expensive happens eg job loss, career break, illness. If I were you I'd be looking to get a mortgage at the top of what we could afford on one salary. I'd be covered for job loss and able to have lots of spending money and a good lifestyle in the meantime. The main benefit would be not being stressed for the next 25 years at the prospect of losing the house if everything doesn't go as planned.

You'll be able to get a great house whatever you do. It's not like you are deciding on whether a decent house rather than a cramped, dodgy one is worth a load of stress and risk.

It’s all about location, not price. So work out the location you like then look at prices.

Sounds like you could get a nice house for 350-400k then. And you could review the situation in a few years time. For example, if your earnings increase etc you could always move to that dream home for 600k.

I would say that it would be madness to go for the 600k property now if you’d like to have 3 children and interest rates are rising already.