Would a £1,250 mortgage be too tight on our income?

[houseaffordability]

£1250 a month is the projected mortgage payment for our new house, £1350 if we take a shorter term. We’ve had a decision in principle based off this, so the lender must see no issue. It’s a beautiful house which would easily work for us for the next 10 years. It ticks every box and feels like a rare find. We might be able to buy somewhere a bit smaller and save a couple of hundred a month but we would definitely have to move and deal with all the associated costs of that.

Our salaried take home income combined is currently £3700, rising to £3800 in a year and £4300 in 3 years time. In addition to this we receive £350 maintenance for the costs of one child and the usual £108 child benefit.

Current total household income £4100, rising to £4700 in 3 years. There is also the potential for overtime so another couple hundred pounds a month when this can be done.

£30 a month to childcare provider which will stay consistent for the foreseeable. No other essential outgoings other than food shopping utility bills, no debts, two cars owned outright with the usual maintenance costs. Possibly considering a car upgrade in the future if it affordable which we’d need a loan/PCP for. We would also like another child in the next 5 years, which means maternity pay. I get my full wage for almost 7 months and then SMP.

AIBU to be worrying this is going to be really tight? We are first time buyers so I don’t know what to expect. My main priority is still being able to save and not feeling like we are accounting for every last penny.

Feels a bit tight, but probably doable.
We paid £1300 on a combined income of £5000. We were paying about £200/month childcare and £200/month music lessons. We mostly did UK s/c holidays.

Make a speahsheet and cost it out. Include council tax, utilities etc. Compare to other mortgage amounts.

If you were renting a family home, £1300 is very reasonable, that would be the budget end of the market round here.

Thank you. I am worried but tbh just short of getting a two bed terraced we aren’t getting it cheaper. Rents in our area are at least the same for smaller houses.

It probably leaves us with about £1000 between us after bills, that’s to save with and spend as disposable income

But doesn’t include food ^ so it would just be clothes, savings, fun budget, holidays, activities for child(ren)

This sounds perfectly manageable to me. Rent would surely be more anyway, if you do not buy a house.Buying a small house for a short time and then the cost of moving again does not seem sensible.
You may have costs that I am not aware of. Obviously this would not allow for fancy long haul holidays but that's a luxury anyway. If need be, you could stop saving for the moment. What are the savings for? Surely buying a good family home is the most important thing you can do with your money.

Emergencies like car repairs, Christmas and birthdays and so on

What kind of length of fix are you getting? It’s doable but I’d want a long fix so I’d know my main expense was set and affordable especially if you are still growing the family.

Our joint income is about 3.5k and our rent is £1550 a month. It's tight but we do it 🙂

Sounds OK to me but it really depends on lifestyle expectations - some people would be happy with that amount of spare money, others wouldn't. Also how comprehsive your budget is - have you accounted for things like Christmas, holidays, insurance, car maintenance, school uniforms etc etc, or would that all need to come out of the leftover £1k?

Perhaps have a look at what you've spent over the last few months and have a really good look at your budget and what you're spending.

Cross posted. So it sounds like you might not have a huge amount left over - you'd have to put some money away before you spent on things like days out, coffees, lunches etc otherwise you might not have money available when you need it.

Also, are you sure about your childcare costs, £30 is very low, and obviously could increase if you do have another DC.

You haven't given enough info to say.

How much more, per month, is it v your current payment?
Will any other costs increase, if so, by how much?
How much spare do you currently have at the end of the month/ year?

How do these numbers compare? If you are going up by £500pm but currently run into your OD every month, no good. If you are currently saving £1500pm and happy to cut that to £1000, all good.

It sounds tight but probably do-able as you are. How will you manage mat leave, do you get a decent amount and can you live on what you'll receive?

Why are your childcare costs so low? £30 is extremely low for the UK. With one child and another planned, that could easily become your biggest expense and wipe out most of your disposable income. When my son was in nursery childcare for four days full time was £1100, which was more than our mortgage at the time.

That sounds too tight for me.

Tight but doable if you don’t have any more children.

everyone gets 30 funded hours now, so all that is to pay is the food. We only need two days a week so it’s like just over £3 a day.

I would definitely consider budgeting for the shorter term option. If your going to sell again in 10 years particularly. In the short term values may fall - so you need to pay off as much as possible in that 10 year period rather than the longer term mortgage which will be mostly interest in the initial years !

My take home pay is currently £3500 (up from £3300 last year) and my mortgage is £600 a month. But I put an additional £250 a month into a high interest account that I use to overpay the mortgage at the end of each year and put another £350 into regular savings each month (often more). So that's £1200 a month before any additional bills. I have a fairly comfortable lifestyle BUT i am only supporting myself on the rest of my income and I don't have any other debts e.g. car finance. I think for a family (of 4?) this could be tight and you might have to watch your pennies for 3 years until you get that bigger pay rise.
The only way to work it out is to make a list of all your essential outgoings and see what you're left with at the end each month.

That feels tight to me, but if you are similar for renting then much better to go for it and start building some equity (hopefully, obvs not guaranteed). I would recommend taking the longest mortgage term you can to reduce monthly payments, then over pay when you are able. And fix for at least 5 years if you can to give some stability on costs - probably more important than rolling the dice and hoping that rates will have dropped in a year or two.

That would be too tight for me. What if interest rates keep rising?

Just do it! Your 1st home together is worth any cutbacks but I feel it definitely doable on your income.

Mumsnet posters always overly cautious!

Also you have a mortgage agreed in principle so they obviously think there isn’t a problem.

What's your situation now? If you rent how much do you pay currently?
It seems quite tight to me but I know rents can be huge

Our income and mortgage amounts are very similar amount to yours. We’ve made it work and always been able to save. We have around £100 a month childcare costs too.
We don’t have loads of money after bills and food etc, but I wouldn’t say it’s tight. We manage to save a decent chunk each month and are able to go on a little holiday later this year.
I think it’s very doable with the amounts you’ve given. Maybe you have to be a little more cautious with spending, but I’d be surprised if you couldn’t at least save some money each month and have a treat every now and again.