Looking to move house- are we over stretching ourselves?

Waldorf_Statler

Don't forget moving fees, could be around £10k-£12k.

I'd also echo the sentiments regarding children and childcare.

You might find that in 5 years time you cannot pass the affordability tests for a remortgage (so you become beholden to the SVR after the fixed rate ends). With many hundreds of pounds a month of childcare (or one salary and no childcare) the amount you could borrow would definitely be less than the £250k you would owe. Arguably you could worry about that when the time comes; depends on your attitude to risk - or potential for your household income to increase over the next 5 years?

Paully232000

Waldorf_Statler wrote: »

Don't forget moving fees, could be around £10k-£12k.

I'd also echo the sentiments regarding children and childcare.

You might find that in 5 years time you cannot pass the affordability tests for a remortgage (so you become beholden to the SVR after the fixed rate ends). With many hundreds of pounds a month of childcare (or one salary and no childcare) the amount you could borrow would definitely be less than the £250k you would owe. Arguably you could worry about that when the time comes; depends on your attitude to risk - or potential for your household income to increase over the next 5 years?

Yes that is definitely something to think about, as for instance, our mortgage is at 2.89% fixed for 5 years, but the SVR at present is 5.99, so our mortgage repayment will go up by a considerable amount should we be stuck on this in 4 years time when the fixed rate ends.

Luckily by then, we wont have any children in nursery, our salaries should have gone up, and our mortgage will be down to 60% LTV and should be able to get another fixed rate.

However, you may not be able to as stated above. Think about your mortgage payments going up by at least 50%, and your salary going down. Can you afford it now.

I am sure it will be fine, and I am no mortgage or financial advisor, just something to think about.

getmore4less

minibbb wrote: »

Hi

My partner and I have seen a house we really like which is priced at 350k. Our current house is worth 185k and we have just over 50k in it so a 15% deposit on the new house.

GOt a stash of cash for the fees?

I am 29 and earn 34k a year and my partner is 25 and earns about 30k. The mortgage will be £1200 a month so double our existing but I think it's manageable. This is a 5 year fixed and I'll try to overpay so maybe reducing the mortgage to 250k ish after this period.

£300k paying £1200pm 35 years 3.27%
to get to £250k in 5 years needs £1586pm

nearly 400pm overpayments

We don't have loans or any debt. Just the prospect of having children in a few years time which concerns me as my partner will need to reduce her hours.

Is a 290k mortgage for people in our situation sensible or are we being daft?

Many thanks!

Kids are covered money down expenses up.

if yo u reach the target £250 @ 3.27 %30years £1091pm

£400pm for 5 years cuts £100pm off going forward if you can get the rate.

ellie27

Childcare is the killer!

We are £1600 per month nursery for 2 kids and thankfully just £400 per month mortgage.

I dont know much about affordability calculations but it looks like it would be a stretch to me, a lot of borrowing based on your incomes.

Is it a bigger house you are looking at, and you want a bigger house as you plan having children? If so, I would just make do now, when children are young they dont need much room and you can save as much as you can and have a much bigger deposit in a few years to come.

Best of luck!

Jon_B_2

bcfclee27 wrote: »

Near identical situation I was in 18 months ago.
We did it and our 1st child is a year old.
We are doing fine and overpaying.

That said we get free child care from the mother in law.

Not similar at all then.

Childcare for us for only 3 days a week costs us around £650/month!