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Original poster

Would you buy a 1.1M house with 300k deposit?

168 replies

User112 · 26/12/2021 22:40

We are fortunate to have a 300k deposit. I run a consultancy business in a niche field and make around 100k a year. DH is on a similar salary - he gets around 10% bonus too.
I’m comfortable buying under 900k, but DH saw a property that he really likes. It’s at 1.1M.
We have 3 kids to get through uni. DS in year10 and our twins are in Y1. DH and I are 42.

Banks are willing to lend us the money, but I’m getting worried thinking about having such a big mortgage. I grew up in a working class family and we budgeted for everything. Growing up, I had food to eat, clean clothes (supermarket ones) and some toys (bought only for Xmas and birthdays) but we didn’t have luxuries. I still carry those habits and spend only on what’s needed. I feel like I’m holding back DH, but I’m really not sure! He is a spender and a risk taker.

Would you take such a big mortgage on our incomes? Mortgage will be around 3.5-4x our joint pre-tax income.

OP posts:

BackBackBack · 28/12/2021 08:37

@Jamdown123 if you don't mind me asking what do you do for a living? I'm always really interested in people who have clear financial plans for retiring early (hoping to pick up some tips although our assets are tiny by comparison I think!).

3WildOnes · 28/12/2021 08:42

Not exactly the same numbers but we have a a similarly large mortgage and will also be paying private school fess for secondary for our children. Uni too but that will be cheaper than school fees.

sweetbellyhigh · 28/12/2021 08:52

I guess only you can decide whether or not it's right for you.

A lot of people are very happy to borrow vast sums of money, others (like me) are much more conservative.

In fact, I'm selling my house and will be moving to an eco home with no mortgage (or electricity or water bills), and investing the surplus.

To me freedom means more than a big house.

TizerorFizz · 28/12/2021 09:15

@sweetbellyhigh
You maybe don’t know that in London £1m doesn’t necessarily get you a big house! It might buy a small terraced house! Location costs as well as size.

The situation for the OP really depends on if they want to save. A 10 year old car won’t go on forever. We always saved and had money available for DC. We didn’t pay their uni tuition costs but did top up the loans for living costs. We balanced what we needed for a house with other expenses. We had a lot of wriggle room and could have cut down if needed. We did have expensive tastes!

sweetbellyhigh · 28/12/2021 09:20

[quote TizerorFizz]@sweetbellyhigh
You maybe don’t know that in London £1m doesn’t necessarily get you a big house! It might buy a small terraced house! Location costs as well as size.

Jessie75 · 28/12/2021 09:26

Ah so she capitalised on somebody else’s misery, love that 🙄

BackBackBack · 28/12/2021 09:37

@Jessie75

Ah so she capitalised on somebody else’s misery, love that 🙄

A house is only ever worth what someone is prepared to pay for it. I'm always baffled by the ire that's directed at a buyer that secures a property for under the asking price - after all the owner didn't have to accept the offer they were made. But if you have to sell, and there aren't a queue of people lining up to offer you full asking, then it's not the buyer's fault is it? I'd be directing my judgment at whoever it was that over valued / inflated the asking price of the house in the first place.

TizerorFizz · 28/12/2021 09:51

@sweetbellyhigh
You said “to me freedom means more then a big house”. That implies you thought £1m plus was buying a big house! If not why mention “big house” at all!?

Yes I know eco houses can be expensive. Great stealth boast though! Well done you!

Jamdown123 · 28/12/2021 11:03

@BackBackBack

I don't consider early 50s as early! How much of our lives do these people want us to give??!! You know?!

I have a few London properties bought in early 2000s when I just left uni. Atm my income before tax on those per month is around £8k, when all is, paid around 4k. So that will be the bare bones and what I'll leave to kids (I guess they'll get our family home, too, but something will likely need to be sold to cover IHT). Then I have my more liquid investments. I work for myself and earn around £70k per year in my job, and I wirk pt, drop off and collect kids from school everyday. I'm not into living a fast lifestyle, I'm happy to be quite humble in my old age! I save and invest as much as I can. I hope to have an income of about £6k a month not including investments and pension.

This doesn't include DH. He has more than me as he works more. However, I forecast his contributions as a bonus. My mother raised a true feminist!

So, yeah, 10-15 years that's where I hope to be. There will likely be slippage. And my line of work values age and experience so if I want to continue working, I can make a few k a month quite flexibly. There will likely be some amendments to the plan (like maybe I'll stay in this house forever), maybe the govt will come down harder in landlords, but I realise thats all very fortunate and I want to raise balanced children.

DoubleTweenQueen · 28/12/2021 12:14

@Jamdown123 Genuinely impressed! I gave up work a few years ago (early 50s) to focus on family and get out if competitive corporate world. DH will retire at 60. No property portfolio, apart from our owned large house, but decent investments.
We live low-maintence but quality lives, and share your pov.

BackBackBack · 28/12/2021 14:06

@Jamdown123 wow you sound amazingly sorted. I'm always in awe of people who had their financial shit together at a young age.

Neither DH nor I did - my parents were rubbish with money so I had to learn my financial skills the hard way. Took me until my early 30s to get sorted. Early 50s retirement is impossible for me as I'm still playing catch up. However I enjoy working so I'd like to be in the position to be able to afford to go part time.

Ozanj · 28/12/2021 15:52

It’s 5 x your salary so depending on how stable your work / careers are I’d go for it

sweetbellyhigh · 28/12/2021 20:00

[quote TizerorFizz]@sweetbellyhigh
You said “to me freedom means more then a big house”. That implies you thought £1m plus was buying a big house! If not why mention “big house” at all!?

Yes I know eco houses can be expensive. Great stealth boast though! Well done you![/quote]
I said freedom means more to me than a big house simply because it does.

You took this rather than at face value but as an indication that I am ignorant of London house prices. Which is such a leap 😂 nowhere does the OP say she is in London. You also made the assumption that I thought £1M bought a big house in London. You haven't been able to explain why.

When I pointed this out to you you then made the leap that I was "stealth boasting". One of those tired clichés so favoured in MN.

There is nothing stealth about being honest about house prices and not is it boastful, I'm just pointing out that your leap to referencing London prices as evidence of me "being wrong" didn't add up.

Having a £1.8M house is nothing to boast about, it is simply an indicator of living in a very expensive city. I am in no way a rich person.

Eco houses, like all houses, can be expensive, yes. They can also be very inexpensive. They are not all the same.

Lostinafield · 28/12/2021 20:03

@Username7521

Yes. Similar deposit earning slightly more going up to 1.25. Oh 3x kids in private school too. It’s manageable for us but we don’t like expensive things.

Other than houses and schools?

MrsBaublesDylan · 28/12/2021 20:47

@Lostinafield I was just about to say the same thing.

The 'we earn over 200k but are not flashy and vulgar' crowd who holiday abroad, have Miele appliances and buy million pound houses in catchment for outstanding schools.

When I am worrying about affording the weekly food shop, they are stressing about whether to plump for a 900k or 1.1m house.

Nicer problems have have

twinkie100 · 28/12/2021 21:47

This is a fascinating thread as we are in a similar position.

Circa 280k deposit, lower salary of 150k joint, but expect our salary's to rise as we are still young (ish!). 2 DCs, both under age 6.

We can go up to about £1million but it frightens the HELL out of me. I'd rather stick at around 800k. It really spooks me.

Whereas my sibling maximises everything and currently has a huge mortgage with no fear.

Let us know what you do!

blueflowersinthesnow · 28/12/2021 22:30

@twinkie100 we were in an almost identical situation to you and ultimately we bought at just over 800. But we both love the house we ended up with. How old are you? We're both 35 so I do sometimes think maybe we should have gone higher. DH is much more cautious than me though and would have hated to max out.

twinkie100 · 28/12/2021 22:44

@blueflowersinthesnow how interesting!! Your situation sounds so similar to ours as my DH is even more cautious than me too.. we are not as young as you - am a couple of years older than you and my husband is 41.

I've really taken my foot off the gas these last few years whilst having children. Just properly now leaning back in and have a lot of earning potential over the next 10 years which is why taking the plunge might end up worth it (if I can grow a pair).

Is your 800k house a 'forever home' or do you see yourself ever moving again?

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