Moving House - overstretching ourselves?

Thrugelmir

leeds101 wrote: »

On a very crude calculation, I expect a mortgage of £300k to be around £1,300-£1,400 per month over 30 years (we are still young enough for this to end before we both reach 65).

Lenders will assess affordability at interest rates of 7%. As that's closer to a more normal rate of interest on borrowings. Continue to reduce your existing debt / increase your savings while you able.

Cazza

You mention you would like more children in the future. Would it make you feel more comfortable to look at the figures based on a "stress test" interest rate and allowing for a larger family and what working hours you and your wife would want to do alongside that larger family? So you could think about what your childcare costs may increase to, or how much family income could decrease if your wife reduces her working hours or stops work completely. Future proofing is important - you may be easily able to afford it now, but how would you want life to look in c5 years time?

leeds101

Thanks all for the replies - lots of helpful comments there.


We don't have any debt to pay (student loans from PAYE aside) and have modest tastes - hence being on the MSE website in the first place!


As suggested, I will play around with a stress-test with a few different variables - a second child; a 7% interest rate and so on.


I appreciate that First Direct will be doing a thorough analysis when I speak to them but even if they are happy to let to me, I need to know that I can sleep at night!


Pushing the mortgage term out even further is something I will look at. I can feasibly work another 33 before turning 65 (a scary thought!). As long as I can overpay without penalty then it does give me the flexibility I would like.


Thanks again.