Should I move? Advice please.

smillie-world

I really, really need some helpful advice.

I have the option of moving to a bigger new build house, and will be PXing my current house.

After the mortgage and bills, and £300/mth holidays and Xmas, £137/mth savings, and £270/mth entertainment/leisure, I will have approximately £300/mth spare, on a mortgage interest rate of 1.23% (fixed for two years).

The bills part includes insurance (car, house, life), car tax and servicing, utilities, mobiles, travel etc. The bills part doesn't include emergencies, and clothing, and whatever else I can't think of.

After this move I will have no savings. The mortgage will take me right up to the age of 66.

This is for a family of four (two teens).

Calculations suggest at the current level, if the interest rates hit 4% I will have a negative balance if I don't reduce something.


I'm worried that I'm cutting it fine. My current mortgage is approximately half the new mortgage. My main problem is that my bank balance is always empty at the end of the month, and currently I do not save for annual things such as car/house insurance, but do not struggle to find the money to pay them in full. I also have no idea what the extra cash goes on, and that's why I'm worried if I move, I may get a nasty surprise.

Am I taking a big risk by moving?

Thrugelmir

smillie-world wrote: »

I will have approximately £300/mth spare, on a mortgage interest rate of 1.23% (fixed for two years).

Lenders will assess affordability at 7% rates. Looks rather tight financially. Might be as well to build more equity / save some further money first.

set

I can't advise if you should move or not but as far as your spending goes how about doing a spreadsheet. We were the same as you, don't know where all the extra cash goes. We did a spreadsheet of household spending years ago and it was the best thing we ever did. It really does help, and think you will be shocked how much you actually spend on 'nothing' as we were. There will be something on this site like a template or something where you can do this. Honestly, try it.

AnotherJoe

How much are you putting in your pension ?

smillie-world

set wrote: »

how about doing a spreadsheet.

Yep, good advice. I've already done a spreadsheet of all the things I need to cover, that I can think of, and used an affordability calculator (https://www.moneyadviceservice.org.uk/en/tools/house-buying/mortgage-affordability-calculator/step-1), which is how I know I should end up with £300 spare at the end of the month.

My big problem is because it is a new build, and I am PXing, there is a massive rush by the builder for the exchange of contracts, etc, and this will not give me sufficient time to do a "dry run" as it were. I can't hold the developer up as I'll lose the house. Hence the uncertainty.

AnotherJoe wrote: »

How much are you putting in your pension ?

7% + the 6% matched by my employer. I've always had a pension, since 18, and have always put at least 5% in and that has always been matched by the employer. That said, I do want to put more away, but moving would probably mean I just stick at 7%.

AnotherJoe

OK that at least puts you in a much better position than most who mortgage to the hilt by sacrificing their pension.
It all seems a bit tight though, as you say perhaps cutting it too fine. Doesn't take too much for the wheels to fall off.

You wrote you had two teenagers. How long until they leave the house so you dont need the extra space? Will they be gone in 2 or 3 years, or 10?
And perhaps you will be helping them out whilst they are at uni (if that is the plan?)? You'd have extra money to do that if you didn't buy now.

Silvertabby

I have the option of moving to a bigger new build house, and will be PXing my current house.

PX'ing is the easy option - but you'll almost certainly be getting under the open market price.

Have you had your current house valued by an independant estate agent for comparison?