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Original poster

Getting cold feet after property accepted. How much is too much mortgage?

121 replies

anaym · 17/06/2021 23:58

Hi

We’ve just had an offer accepted on a dream house for £990,000 with a deposit of £200,000.

DH makes £130,000 and I make £90,000 which nets us £8000 monthly after taxes.

We are now very comfortable as we live in a 2 bed flat with a £1,600 mortgage without children, as we have been working from home we decided to buy a house and got the £990k offer accepted which means we will have a £3,100 mortgage to pay off.

We can do that now but are scared that when kids come and I have to stop working our new net of £5500 won’t be enough for family and house.

Should we consider a cheaper property even though is not our dream house and we would have to move further away?

Thanks for your wise words and advice in advance!

OP posts:
Willwebebuyingnumber11 · 18/06/2021 07:50

Please bear in mind not all SAHM are financially reliant on their husbands.

I have a very good income of my own from properties and a lot of savings and I’m a SAHM.

Jonnywishbone · 18/06/2021 07:54

Effectively when you have children you are expecting a £130k income to service an £800k mortgage. That's mad. I earn more than that and wouldn't have that size mortgage. You haven't thought about school fees, nursery fees are even worse. Also your net income estimate is wrong unless that is net of other costs you haven't mentioned.

Two other factors. One - your husband will get pay rises and bonuses unless he is at his industry salary ceiling. Two - why would you stop working? A nanny or an au pair can provide a huge amount of support.

SwimBaby · 18/06/2021 07:58

It sounds fine as long as you have 2 salaries or one of you gets a raise to take them to about 180k per year.

MassDebate · 18/06/2021 07:59

Another one querying why you “have” to stop working when you have children? That aside though I’m going against the grain because if you’re on those salaries already, I imagine you’re in jobs with room for more wage growth so the mortgage will become more affordable in time? What seems like a stretch now might therefore soon become more comfortable (although not necessarily if you really do plan to drop to one salary…)

Thethingswedoforlove · 18/06/2021 08:00

Personally I think it is good to stretch yourselves at this stage. Your incomes are presumably likely to rise over time? Or one of yours is of only one stays working? Is part time working going to be an option for either of you? Once you have made the Leap
And adjusted to a lower disposable income you will be pleased you did. We did this- at a slightly later stage. It was tough for a few years. But young kids don’t mind where they go and what they do and plenty of stuff is free or cheap at that stage. You will be so pleased to have the space as the kids grow. Honestly- you have more wiggle room on your finances than when we made the leap. And we have never ever regretted it.

Annietheacrobat · 18/06/2021 08:25

I think you will be stretching yourselves .....however I suppose there is always the option of downsizing should it become unmanageable. Really depends on how likely your salaries are going to increase and whether you are definitely going to stop work after children. 3k is a huge chunk from a 5k takehome paycheck

Africa2go · 18/06/2021 08:26

I agree that it's often good to stretch yourselves when you're high earners and childfree but have one eye on the future.

Childcare for "children" I.e. more than one will easily set you back £2k for full time places for 2 children. If you drop some hours and need part time nursery places, your income with drop albeit childcare will be cheaper. Whichever way you look at it, children will impact your income.

If your figures stack up, go for it.

Amboseli · 18/06/2021 08:31

Do not stop work when you have children.

Dozer · 18/06/2021 08:32

I wouldn’t want to have a mortgage that large, even on those current high salaries. Am risk averse though!

As PPs say, have you estimated bills, childcare costs, and looked a school catchments?

You don’t ‘have to’ give up work if you have DC. Lots of other options. Barring ill health or DC with additional needs would never choose to be financially dependent on DH.

Sw19lover · 18/06/2021 08:33

Thank you all! Great support ideas, our plan is not for me to stop working but since we don’t have family around our support network for when we have kids is going to be limited so we want to keep my salary off the table as an option.

@Thisusedtobeaniceneighbourhood What would you guess is the utility and upkeep of a 3/4 bed Edwardian house ?

The £5500 is before paying mortgage.

Another topic is that DH is 44 and we were going for a 25 years mortgage. We know is farther into our retirement than what we would want to but we think of the purchase as a financial transaction being cheaper than renting anything bigger than our flat around here, and perhaps we might want to move or downsize later in life.

We don’t have any other debts and we like to travel but think we can do that with savings.

Santastealer · 18/06/2021 08:36

If you currently take home £8k and only pay £1600 I assume have shit loads of savings! You can use these to ride you over while you are on maternity leave and then go back to work, maybe part time.

If you really want to not work then I wouldn’t want a mortgage that high on one salary.

If me and DH both worked full time we could afford a £3k mortgage, however I wanted to prioritise time with the children and so I only work 2 days a week and we have stayed in a smaller house with a mortgage we are comfortable with. It depends on what your priorities are.

Sw19lover · 18/06/2021 08:36

PS. We are not thinking of myself stopping work all completely but maybe the first 1/2 years of children demand it?

We do think of me getting a less demanding job with more flexibility or part time house so my income would be reduced

Dogsandbabies · 18/06/2021 08:40

We are in a carry similar position financially OP. Income and mortgage. Difference is we have 2 kids and one soon to join.

We don't struggle at all financially. We pay nursery for the youngest and can afford the double fee for the new baby - it will only be a year. We still eat out, go on holidays, kids to extracurricular activities. We have prioritised making savings before the baby arrives. But overall we love the house and we make it work for us. In my case I never wanted or considered giving up my job. We are like you pretty equal at what we bring in and we both enjoy our careers. No family around but we work together as a team and we make it work.

Whaddado · 18/06/2021 08:50

@IveNameChangedAgain2020

I don't think I'll be much help. I chickened out (ie didn't carry on with the process rather than screw over any seller!). Despite earning a higher salary, with a very high deposit I was so scared of the pressure and the what-ifs. However, life is too short for what-Ifs!! Do it!!
Same - higher income similar mortgage. I never felt comfortable with the pressure we’d be under if one of us was out of work so decided to go for something less than half the price and feel soooo much more relaxed. Realised the big house wasn’t worth the stress (to me) - it may be to you!
SwimBaby · 18/06/2021 08:52

You could get a nanny when/if you have a DC.
You can always sell the property and downsize if need be.
44 sounds quite old to get a 25 year massive mortgage, but I’m aware I’m looking at from my perspective as my DH and I retired early/mid 50’s.

Thisusedtobeaniceneighbourhood · 18/06/2021 08:54

I think you will probably be ok if you keep working (smaller children are in many ways easier to work around because although nursery is expensive it covers long days - primary school is the pinch). We manage to make a £5k mortgage payment (we are overpaying) most months, and still be ok.

Upkeep depends on whether there are big works needed (eg roof), renovations (a newly renovated property will be fairly hassle free for at least 5 years, but a 10 year old renovation will be getting tired even if it doesn’t look it when you view), windows (ours are wooden, painting is expensive). We also have a big garden which is a hassle.

Similar age bracket to you when we bought this house, it’s possible. But it is sometimes stressful.

I also think you have your take home values wrong, are you making massive pension contributions? And if so could you divert for a few years if you get stuck?

Thisusedtobeaniceneighbourhood · 18/06/2021 08:56

But the big thing for us is that our mortgage is less than half the value of our house, and much smaller than you are suggesting. But I expect some of our neighbours might be in a similar boat to you …

SofiaMichelle · 18/06/2021 08:58

You wouldn't have to give up work if you have children and in fact it would be stupid to do so.

I wouldn't be happy with a mortgage that size on your salaries, though, to be honest.

YellowFish12 · 18/06/2021 09:17

Get the house, overpay, save, when you do have children continue working (both of you could drop a day) and you'll be fine.

korawick12345 · 18/06/2021 09:22

If interest rates go up at the same point that you go on maternity leave how will you be set?

toffeebutterpopcorn · 18/06/2021 09:25

Have you got savings?

Diverseopinions · 18/06/2021 09:30

I think you have to be really sure of the house, it's location and desirability, if you sell. The more expensive the house, the fewer people interested you will have, when it comes to reselling, and if things changed and you thought you might want to or have to sell.

Things are changing, after the pandemic, and the arrival of working from home as a more common scenario. I've seen posted here that a lot of families are leaving London.You'd have to be sure that the location you have chosen is always going to be desirable - and near transport links or schools, in case you resold.

You perhaps ought to compare with other options, such as an investment buy to let, and a cheaper property, if you have a feel for such things.

Is it possible that mortgage interests rates could rise significantly in future? It's a bit of a worry, in these uncertain times.

I think cutting risk, gives most peace of mind. If you really felt good about this move and that it is natural and coming organically from your circumstances, then I don't think you would feel conflicted.

Benediction · 18/06/2021 09:31

That amount of debt and level of repayment would scare me to death tbh. When we earned 155k between us, we had a 300k mortgage.

There is a reason I am not living in my dream home, but in a semi with a small garden. We always wanted enough money left after mortgage and bills for a nice life. My dh's parents separated when he was 6 and his mum says one of the main factors was that his dad insisted on buying the big dream house, then interest rates went up and they had kids and every penny went on the mortgage and they had no spending money or money to go out together.

We have never stretched ourselves too far, and we have been very happy. We have enough, and we live mortgage free with savings in the bank.

PiffleWiffleWoozle · 18/06/2021 09:31

Have you budgeted for increased interest rates?

Could you overpay now so cutting the risk fir the longer-term/if kids come along?

Embracelife · 18/06/2021 09:35

You better off paying a nanny out of combined joint income and continuing working .

Pension contributions on your salary are significant so well worth continuing to work.

Have you factored in running costs of your house and repairs new kitchens etc?

Depending where you are that could be a tiny london terrace .... or a mansion with huge running costs....