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.

This isn’t true. 28% is the general rule (though that can get arbitrary depending on how high your income is), and the average FTB spends 37% on mortgage.

But as more and more people avoid mortgage debt those numbers apply to less people, the average FTB in previous decades now stays at home.

https://tradingeconomics.com/united-kingdom/mortgage-approvals

It’s tight but most families find it tight to begin with. In ten years time the mortgage will be the same and income will have risen. You’ll be glad you stretched yourself then.

So you have 1k left after paying bills and living expenses. Some people only have 1k as their total income.

It sounds fine to me. It was some time ago now, but when we bought our last house, the mortgage interest rate had just peaked briefly at 18% and we were spending about 75% of our joint income just on the monthly mortgage repayment. It was very difficult but we managed and always thought it was worth it to get the house we wanted at the time.

I don't think it sounds too much, probably similar to many I would think.

You like the house and feels like youll be happy for 10 years. Go for it and fix mortgage for 5 years

I’m naturally cautious but still think it sounds fine. Yes you could wait and rent but I am sure you want to start building a family home at this stage and the right time may not come for years.
Just be very mindful in the first couple of years and build savings up for emergency fund rather than thinking you have enough for holidays and house improvements. My home is massively important to me and I’d rather have a place of my own than any fun stuff.

Assuming you don’t have the option to live somewhere for free, this must be a good idea as cheaper than rent.

If you are staying 10 years, the advantage compared to renting will almost certainly increase as your salary and rent rise with inflation, but the amount owed on the mortgage stays fixed at 2026 prices

Sounds like a pretty miserable financial situation to me but if rent in your area is of similar cost I dont suppose you have much choice.

I wouldn't suggest the "buy a smaller house for now" option. I done that and we're still here 11 years and 2 kids later because I refuse to spend the money on moving fees and an increased mortgage.

Sounds tight but manageable
my biggest concern would but interest rate increases
I had my fingers burnt massively where my mortgage nearly doubled

In the south east it would be rent for two bed house , I would go for it but live very frugally for the next couple of years and put money aside , you need to build savings of three months mortgage at the very least .

We pay that mortgage on £6100 but I wouldn’t like to do it on less.

At it's highest my property costs were 900 pm on a 2700 income (similar % to you). I was also a single parent to two older primary kids. It was tight and I had a cast iron budget and prioritised developing a savings buffer for emergencies, sometimes only being able to put away £50 a month but away I put it. I think the biggest worry were the mental what ifs because I was a single parent and if I lost my job there wouldn't be another salary. In your case with two of you I would be ok with those numbers.

Fast forward on my property costs are still around 900 but my salary is much higher making things far more comfortable.

I would forecast things like wrap around care if your kids go to school, and try and keep back some savings for emergencies like boiler or car etc. chat gpt is good for drawing up a budget and can give approximations for utilities as well.

That's irrelevant – the debt OP is willing and wants to take on should be seen in the context of what demographic she is in, rather than claiming that it should be 20%.

Partly because my high interest accounts have only been a 12month thing and then you have to open a new one and i like to see the mortgage amount go down! The interest rate on my savings has been slightly higher than my mortgage but not by much.

Your house is a long-term investment which will add to your family's quality of life. But you have to go in with your eyes wide open.

I highly recommend using this:
https://www.moneyhelper.org.uk/en/everyday-money/budgeting/budget-planner

Find out everything you can e.g. Council tax band, water rates (if not metered) and use worst case scenario figures - when we moved to a bigger home I budgeted for our utilities to double - it tripled plus some 😭
Use your last 6m bank/credit card statements to inform the figures you're putting down - don't just guess because it's never enough!

This is the one area where it's worth the tedious donkey work is worth it to make a fully informed decision.

We have a huge mortgage that written down would make some posters on here absolutely apopleptic, but 1) its all relative 2) we were as clear as we possibly could be on the worst case scenario of what we expected to pay out and what would be left each month.

All financial decisions come with an element of risk - only you know what level you are comfortable to accept and how good you are at sticking to budgets.

I don’t know. It has been for me because it’s given me and my son security. But I am ok with keeping expenses right down.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

This might be helpful?

In my circumstances this indicates I'm 10k better off overpaying than saving, but for others it will be different.

Fair enough, if it works for you that is great, the OP seems to be stretching too much financially though IMO.

Thanks everyone. To be clear, there will be £1000-1100 left AFTER food. So I’ve included food in the bills. At least £1000 monthly left after that, to spend or save. Does that change your view?

It sounds just about doable but I think having another child might be pushing it too far.

Our mortgage is £1200 and joint income is £5800, no kids.
after getting a mortgage, you will need home insurance, home maintenance/ emergency cover or maybe getting an alarm system, income protection potentially, mortgage protection insurance? I know we did and it all adds up. To me your budget is a bit tight.

I'd take a longer term mortgage to reduce "mandatory" monthly payments and overpay ie. Pay the..£1,250 but know you have a buffer and can pay less of you need to.
I'd also do at least a 5 yr fix as this gives predictablity