Does this sound acceptable?

[PatchworkEle]

I'm trying to budget for a potential house purchase. There's my partner, myself and our three year old.

My take home is £1750 per month. I work part time so we have no childcare costs.
My partners' montly take home is £2750.
We both have to opportunity to work overtime each month, but for the purposes of my calculations, I've used our basic monthly take home amounts.
So our total basic monthly take home is: £4500.

These would be our rough monthly outgoings:
Mortgage - £1,950
Council Tax - £225
Water - £100
Gas/Electric - £250
Food/Toiletries etc - £600
Car - £300
Train - £100
TV - £100
Phones - £50

Total monthly outgoings = £3,675

Meaning our remaining monthly disposal income would be: £825.

Does this sound reasonable?

Sounds easily do-able to me.

Not sure if this is correct.
Just wonder if a broker/bank could do AIP for you for free to work out the calculation for you?

I'm very interested to know why you don't you think it's correct?

I've listed all our mandatory outgoings. We'd have £825 left over each month for treats like days out, cinema, clothes etc.

What's an AIP?

An AIP is an agreement in principle. It’s a provisional idea of what mortgage you could get.

Your budget does not include any savings. If you want to own a house you need to be saving towards repairs and renovations - you never know when something might need doing urgently.

What about everyone’s clothes and shoes? Are they coming out of the £825?

Edited to add: you also need to factor in home insurance (buildings and contents), life insurance and TV license. And also £100 on TV seems a lot! Does this include streaming services? Do you have some kind of expensive Sky subscription?

It’s not a full list of outgoings, you’d need buildings insurance and life insurance/income protection for the mortgage too. I’d think that your mortgage is quite high for your income, have you spoken to an advisor yet to find out if a bank would lend you that much?

Where is the money for clothes, insurances (buildings and contents), birthday/Xmas, haircuts, savings for emergency car or/and house repairs, replacement appliances etc. It might be a bit tight.

Money Saving Expert has a statement of affairs template you can download which will help you to budget more accurately and realistically.

I probably should have explained things a bit better in my original post. So, the figures I have worked out would be our absolute "worst case scenario" (can't think of a better way of putting it) for when I go part-time.

Currently I am working full-time, so my take home at the moment is £3,000 per month. Based on that as my income, and my partner's at £2750, we had a mortgage agreed last year (we pulled out on the purchase after asbestos was discovered). So we'd have no issue getting a mortgage at the moment. I obviously would not tell the lender that I will be going part-time in September 2025 when our daughter starts primary school.

Also, we currently have the help of two grandmothers - this is how I am very lucky to be able to currently work full-time with no childcare costs.

By September 2025, one grandmother will likely be too frail to help out with childcare, but my mother has just retired and has been looking forward to being able to spend more time with the little one. If my mother can help out with childcare from September 2025, I will be able to increase my hours and my monthly income will be more than £1750.

Also, my partner and I both work for the emergency services, which (dependant on our roles), require us to work overtime. I will be able to pick up the odd extra shift, and I don't think we have ever known a month where my partner has brought home just his basic wage. I'd say on average he brings home at least £3,000.

So, the figures in my original post are based on having no childcare help at all from grandmother, and my partner and I bring home our minimum monthy basic wage with no overtime taken into consideration.

We will have £20k leftover in our savings after the house purchase.

My thought process was to establish whether or not we could afford to live on our absolute possible minimum income.

I think it would be sensible to add £100 for insurances (life/contents) to our monthly outgoings.

I won't always work part-time. I'll gradually increase my hours once the little one is in secondary school.

Looks good to me.
If it isn't, you can always switch the mortgage later and go interest only for a couple of years until interest rates calm down. Rumour has it they'll be at 4% by the end of the year.

I think it’s a little tight on your income & the fact you currently have no childcare costs.

There never will be any childcare expenses. Grandmothers help us out at the moment, which allows us both to work full time. When little one starts school, I will go part-time. We won't require childcare if I am part-time.

If I add on £100 to our outgoing expenses for insurances (life/content). That would leave us with £725 at the end of each month (worst case scenario).

How much would you say we'd ideally want to be left with at the end of each month if £725 is a bit tight?

Thanks in advance!

I think you'll be absolutely fine, really.

We are on one fairly modest income. No childcare costs as I'm currently a SAHM to two pre-schoolers. We're buying in Scotland and our mortgage will be less than yours (£850/month), but our income is also substantially less and we were approved just fine. I know things will be relatively tight for a few years, we will have far less disposable income/savings potential than you, but we can cope and the bank agreed! We're going with NatWest, so not even a small lender, and we have a decent 5 year fix.

OP, I'd suggest chatting to a mortgage advisor. Many don't charge any fees, and they'll be able to give you good advice and secure you the best possible mortgage. You look like good candidates though and I think your budget seems very healthy.

I work p/t & have some form of childcare costs due to school being a shorter day & extracurriculars.

Ah ok. Gotcha.
The way mine and my partners shifts are means that once I go part-time, one of us will always be home to do school drop off and pick up, and also be around in the evening for extra curricular activities. So we will never have any childcare costs. I guess I could increase my hours and get some childcare, but any extra I'd earn would end up going on the childcare. So If rather work fewer hours and do all the childcare myself.

But extracurriculars usually cost eg swimming etc

I’ll just add we found all kinds of horrors in our house after we bought it (yes we got the full survey, no we couldn’t claim against the surveyor) and it really ate into our savings. We were lucky because we had some money left over after the purchase but a large chunk was taken out due to unforeseen work.

Will you need childcare in the school holidays?

43% of take home on mortgage, sounds high but just in the realms of advised proportions.

Can you try saving the difference between your current income and proposed adjusted for current mortgage/rent, and seeing what it's like to live on? So, say you are proposing to drop 1250 in salary, and increase the mortgage by 250, save 1500 a month to show you what life would be like.

No, we won't need childcare in the school holidays.
My partner and I both work shifts in different strands of the emergency services. I work a mix of days and night, all 12 hour shifts. My partner works a mix of days and nights. His day shifts are 10.5 hours, and his nights are 13.5 hours.
My shift rota is worked out around my partners shifts, so there are never any clashes, including during the school holidays.

It's very difficult for us to try and see what it would be like to live on that budget at the moment. We are chain free because we sold up and hadn't found anywhere to buy as the market was a mess last year. So we are currently staying with family. All my workings out for out outgoings are estimates. A friend thinks £600 a month on food/toiletries is too much, but I'd rather budget over than under.

That's what the leftover £750 per month is for.. leisure, clothing etc