Can we afford this - much bigger mortgage...

redrabbit29

I own my own house in South East England (near Reading). It cost £133K for 2 bedroom maisonette which is extremely cheap for this area.

House is now worth about £150'000 two years later.

Equity + deposit therefore is between £35-40k.

GF has £12.5k in savings
I have £3k in savings

Therefore we have about £50k+ for a new house.

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The place we want is around £300k. Over a fixed mortgage that's around 4-5% costing about £1100-1200 per month.

My Salary = £35'000
Her Salary = £25'000

On paper the figures look alright. We have NO kids and NO debt.

Do you think this looks OK? I'm thinking outloud so just wanted your opinion?

Mind_the_Gap

Do you plan to remain child-free?

Atomix

Allow £10k for stamp duty / £2.5k ea fee plus solicitors/searches/mortgage fee/survey/removal fees/ maybe more - this chews into your equity and more...

19lottie82

That's a big chunk of your take home pay on your mortgage every month. I'm not sure a potential lender would be too keen.

Also what happened if one of you lost your job, or if interest rates shot up and your fixed rate ended?

Personally, I wouldn't risk it.....

Atomix

Also allow contingencies too, we 'offered on a house' spent money on survey etc, mortgage survey also costs money, solicitors charge too, they all love it, rubbing their hands together, then something serious came up in the enviro search - had to pull out, approx 1k written off, next house... Here we go

monty-doggy

How will you cope if interest rates rise? Also big house = big repair bills and expensive upkeep. More council tax bigger heating bills. Ask yourself why you need all that extra room, would you rather gave small mortgage and be able to do holidays and live life as you want, or have the big house with financial burden?

Atomix

monty-doggy wrote: »

How will you cope if interest rates rise? Also big house = big repair bills and expensive upkeep. More council tax bigger heating bills. Ask yourself why you need all that extra room, would you rather gave small mortgage and be able to do holidays and live life as you want, or have the big house with financial burden?

Yep couldn't agree anymore - it's not just the mortgage bill, all bills are higher... Not putting you off at all - it's a great goal to go for, just know what your getting into...

[Deleted User]

Accounting for the costs of selling your house and purchasing the new house your deposit probably won't be above £30,000 and that would clear you out financially -- unless you have a separate emergency fund? -- which would mean you need to take out a £270,000 mortgage on £60,000 income, that's 4.5x your household income which is pushing the limits of affordability... to me that does not look okay, especially when you consider -- as monty-doggy said -- increased council tax, heating... if you've only managed to save £15k in 2 years this is going to push you to the limit.

lee111s

I don't think a £1200 a month mortgage on a combined salaries of £60k is a "huge" chunk of take home pay?

I pay my mortgage of £525 (I also overpay ~£300 a month) per month on £30k per year and still have a very comfortable life.

Also who said it was a big house? Just because it's £300k doesn't mean it's huge.

As there'll be two of you in the new house bills and tax may be larger however the cost will be shared by two.

I think it's more than doable.

Atomix

Also if the reason for the bigger house is because your planning on having kids - be prepared as your probably aware - childcare is shockingly expensive... (Obviously making assumptions)

redrabbit29

lee111s wrote: »

Also who said it was a big house? Just because it's £300k doesn't mean it's huge.

Good point!

I overpaid on my place a bit, but £300K isn't a huge house, it's a detached 3 bed if I'm lucky.

There is NO DANGER of me losing my job, but my GF isn't in the same position.

I almost think this is skipping a house move, i.e. normally I would move from here, to somewhere else AND THEN to the £300k place.

My net taake home is about £1900, GF is about £1600.

Think we can afford £300k house