If you've stretched yourself to buy a bigger property, was it worth it?

[rosiegoodwin5432]

We are currently looking to upsize from a flat to a house. To buy a house in an area we like with the right transport links, we will be really stretching our income, taking out the max mortgage possible. Have people on here done this and was it worth it? It's not urgent that we move out of a flat, so I'm wondering whether we stay in the flat for as long as possible to first pay off more of the mortgage.

Yes. In times of high inflation, debt value decreases so it’s actually a good thing to have high debt but only if you have the means to pay it. If it’s a long term home, like us, I think it’s a good move as long as you think your jobs are stable, right area for future schools etc. only you can answer this question though as everyone’s circumstances are different.

Yes, but only because our mortgage is still very affordable (not UK), and we plan to stay here for decades so it was a wiser investment to put everything we could into one place (rather than somewhere we knew we would likely sell after a few years).

Yes, we stretched ourselves (but not obscenely so), essentially doubled the mortgage compared to what we were paying. But the house is now worth around £100k more than what we paid for it as prices exploded around here, so that helps with our LTV. I love having the extra internal and external space. We spend a lot of time at home and it’s worth it to me.

I spend so much time at home it is a high priority for me to get the best house I can afford. Yes I have done this. Yes it is hard at the moment. Would I make the same decision with hindsight. Yes I would.

If interest rates go up to 10% though. That would be horrendous and my advice would be no don't do it!!

My friend did this ultimately it has paid off due to house prices going insane but she had a lot of years where she couldn’t afford a holiday or do anything much at all.

Yes, because we knew our incomes would increase and our jobs were guaranteed. We ensured that we had life, critical illness cover etc such that the mortgage is fully paid off should one of die or we would receive equivalent income should one of us be unable to work.

At the moment I would say no. We bought a doer upper 2 years ago and there have been so many more costs than we initially thought. It's also the maintenance - garden, cleaning etc. I like it here but I look back on my old 3 bed semi and remember how cheap and easy things were there. Also the mortgage and utilities are astronomical.

I'm hoping things will get better as the first few years are always tough. Ultimately it will be a great family home but when I'm an old lady and the kids have moved out and dh has pegged it I'll definitely have to move again lol.

I did but I locked myself into a 10 year mortgage fixed rate so I don't have to worry at all about it.

It's a bugger if the interest rates drop and I'm stuck with paying over the odds but I had no other option, it was to either aim high and hope for the best or live somewhere I don't much like.

I love my new home! The other really interesting point is, I've been able to furnish it with free items from a local recycle network on Facebook which has been such a surprise to me. I've literally saved hundreds of pounds that way. I once dated someone who was on a salary five times higher than me and yet I had more money because everything I bought was a good bargain but everything he bought was very expensive. For example, he had a new Mercedes at £400 PCM and I had a 3 year old car I paid £4,000 for, upfront. I preferred driving my car as his was a tinny, clunky Mercedes and mine was smooth and more comfortable! My washing machine cost £125 to replace, but his cost £800. They both washed clothes perfectly adequately. When you blanket up like that over every item you buy, you can see where money can be spent unnecessarily and I think being more free go probably just teaches you a different way to rob Peter to pay Paul.

My parents did this and we ended up losing our home in the recession in the 90s. Dad was a partner in a construction firm and they had no idea how bad it was going to get.

It has made me very risk averse so no I wouldn't.

At the moment - most definitely, yes! We were so stressed in our old flat as we had outgrown it massively. I love our new house and am so much happier now we have more space and the DC are much happier now they all have their own rooms.

Ask me again in 4 years when we come to remortgage though as we just managed to get a decent rate before things went mad last year!

If I were you I would overpay now and wait for rates to come down if you’re not in a rush.

We didnt even stretch ourselves but worked out today that if interest rates stay as they are when we renew it'll bang £350/mo on the repayments which is a bit ouchy, got to come up with £20k to keep the repayments the same :( i'd do my sums carefully, taking into account interest rates rising.

Yes! We stretched ourselves twice with two different houses which both needed work. This paid off over a 17 year time frame. However we eventually left the second house to downsize to a third house, the cost of the work to our second house making our then mortgage unmanageable. Our third house is a keeper however and not something we would have been able to afford had we not stretched ourselves in the first place. I’d like to say we were skilled at reading the property market but we were just lucky.

Yes we bought our dream home 8 years ago thanks to the property slump ( we couldn’t have afforded it when it last came on the market). We did stretch but it has been worth it in every way and has appreciated after Covid. I never even really want to go on holiday any more!

critical illness cover etc such that the mortgage is fully paid off should one of die or we would receive equivalent income should one of us be unable to work.

What critical illness cover did you use? Lots don't pay out for certain cancers & how long was the equivalent income payments for?

Yes but made sure we could afford the payments even when rates went up (stress tested our budget to 10%)

We bought at 190k and put 10% down, lived here 10 years and it’s worth 360k. It brings me great comfort that if the shit ever really hit the fan that I could sell up and buy an ex council or terrace for cash.

Yes absolutely worth it - long term, subject to a couple of caveats.

Driver was schools - moved to an area with some of best state schools in the country. Absolute no-brainer for us, children v happy through school, on track to get top grades etc.

Caveats -
We were already in the childcare years so knew income would increase over time as soon as we stopped / reduced child care costs.

It was a long term house so knew we wouldn't be looking to move again any time soon.

We spent years not being able to afford to do anthing to the house (lived with no carpet in hall / on stairs for a year or more, 60s bathroom, couldn't really afford anything other than paint). Thats tricky and demoralising at times - you've got to be on board with that. Also meant nothing fancy re holidays / cars for a few years forever.

We've extended it / remodelled now so it is largely what we want. With the way prices have increased over recent years, had we not taken the leap when we did, we wouldn't be able to afford it now.

Should also say we were relatively lucky in that mortgage rates were quite good / not rising for the period we were massively stretched. We've just had to remortgage and even though we don't have a big mortgage, the rate has jumped so much that our repayments have gone up by £400 a month. That would have been a disaster had it happened when we'd just bought this house, so as a pp has advised, if you do take the risk, fix your payments so you've not faced with unexpected jumps.

For us? Yes. Each time. 100% the right decision.

However, everyone's circumstances are different.
Things like job security are crucial. Stress testing against interest rate rises is crucial. The ability to increase your income if you needed to.
Plus, how important it is / how much you value what you gain from your move.

So, moving so the dc can have their own rooms, is a bigger reason than a couple on their own moving from a 2 bed to a 4 bed. Moving to make your commute shorter or easier, or moving to somewhere you love the peace and tranquility will have more and less importance for different people.

This is exactly the same for us. Our last house was bought on just one wage. So we had a lot of spare money. This current house has taken a stretch, but the house next door has just sold for almost £100k more in two years.

I wish we hadn't. Bought the house of our dreams but it was £50k more than our top price so subsequently was not able to renovate it or enjoy holidays etc and drove shite old second hand cars for ages. Buuuut the house was an amazing place to raise kids with its huge acreage and we loved living there.
In the end when we decided to downsize and relocate we took out a £35k loan to replace all the 1960s bathrooms and flooring etc so got a good price a quick sale and had a lovely year enjoying it renovated

Yes definitely as could take in a lodger earning us 7.5k tax free every year