How do you know you can afford new house?

Pepperoni

I know that is an obvious question, but what I mean is whilst your budget suggests that you could afford the house, how do you know that the reality will match up?

Did you live off what you would have to live off for a good while beforehand etc? Know that you would want to make sure you had 'XX' left over each month as an emergency fund?

student100

It is hard especially if you are thinking about changing circumstances.

I am basing how much we can afford to pay when me move house on what we are currently paying each month on our current mortgage, plus an amount we are already paying into regular savings accounts every month. With a margin under that total amount to cover future uncertainty (interested rate rises etc), higher heating bills etc in a larger property, and so on.

Currently we have some spending which is somewhat discretionary (holidays, meals out etc) which would give an extra safety margin if things did take a turn for the worse). And keep a chunk of cash hidden away in an ISA in case of emergencies (major unforeseen repairs to the house or car, cover income loss for a few months in case one of us lost our job or got ill, etc)