Stretching ourselves too much?

[Happyhappyday]

For starters, I am AWARE that we are in a very privileged position but still need to make a tough choice.

DH and I have been looking to move for a while - we love our neighborhood and our house is fine but it never was intended to be a forever home (been here about 8 years). We live in a big city abroad and our house is terraced and has only a very small garden and our DC really love being outside which our current house makes challenging. The layout also increasingly makes us all feel like we're on top of each other.

A house recently came on the market that ticks a lot of boxes but I can't decide if we would be stretching ourselves too far.
Finances:
HH income of around $300K, take home after taxes is $18K plus $15K bonus anually.
Current mortgage is $3100/month with taxes.
Current monthly spending leaves us around $4K/month after putting 20% into pensions.

• Current lifestyle is reasonable extravagant, ie, we have been on 3 long haul holidays this year, we eat out 2-3x a week, we ski a lot in the winter locally and we buy what we need but we don't have super extravagant tastes - we drive a 10 year old car we bought outright, we have no other debt, we're not into wine etc. DC likely won't need to go to private school and DH's family would probably want to pay if it came to that.
• DC are in primary school so have some costs but not super high.

We would have $725K as a deposit and new house would be $1.45M. New mortgage payment w/ taxes and insurance would be around $5600 so we would be left with $1500/month at current spending levels. I can see a pretty obvious $1-2K that we could cut if we needed to and I feel like I am ready to make some lifestyle sacrifices for the right house but is this insane? If we went through with the purchase we would have around $70K left in liquid assets (non pension) which feels very tight to me (I am aware it's a huge amount of money to a lot of people but it would be the least savings we have had in about 15 years).

Should add that both of our families are well off and mine especially could and would bail us out of really any financial difficulty but it would make me feel very ashamed. Mine would probably expect it paying back or coming out of inheritance. DH's family would bail us out without strings but would be less giant pot of money and more help with monthly cash flow.

If I lost my job, we could cover expenses on DH salary alone but would be tight. If DH lost his job (more likely but not expected), we would be a little short every month even with some cut backs BUT I could probably go back to a previous employer at a salary that would cover our expenses if I had to.

The kids are young so if I was you, I wouldn't think of the next house move as a permanent one, not THE house/home. You have plenty of time to think of that in the future.

You've already said you have a lot of slack in your system, you can cut back your lifestyle if you chose to and be able to afford a 1.45m home with 70k in savings as a buffer, so what is your actual dilemma?

Are you in the US? If so, is the level of savings to do with a concern about potential huge medical costs?

You are in a hugely privileged position, tbh. It sounds like you can easily build savings up without making too many compromises.

Previously DH and I have always had that level of savings AND a couple years of expenses in investments so going down to just the savings is a huge change. I am realizing that we’ve just been super lucky that previously we were able to buy and preserve that. Previously we either compromised on location or house but we’re finally in a position where we don’t have to compromise on either but would have a much smaller cushion.

It’s a reasonable question but actually if you have good insurance (and I have excellent insurance), you aren’t at risk. My out of pocket max is $1000 and it’s very inexpensive and easy for me to get to the dr. My job is pretty secure and at a company that prioritizes employee benefits.