NEW HOUSE

Stevensuperbike

Afternoon I am 37 years old, my wife wants to move into a brand new house (build just started, completes Dec 2022) Harron Homes the developer. £363k price tag. 

My current mortgage is £58k left at 0.99% until Dec 2023 .Harron homes will part ex ours at £236,500 (1952 old house with extension/ summerhouse/ large garden etc etc
**just spent £1500 on rhino floor throughout and £2000 on garden fencing!** 

Deposit we will have is £184500… Current rate I can do maths on is 3.25% with NatWest so (£184500x3.25%/12 months is £500 interest alone on the amount per month!! 

I’m only paying £48 ish per month interest at the moment so £500 a month interest alone is a big !!!!!! pill to swallow! Don’t get me wrong the new house is lovely but actual floor space smaller and garden way way smaller too. Could also potentially be forced to move kids out of school if the time comes when they grow up into a bigger school as the new house is a bit further away than our current form the school. 

I just don’t know what to do for the best… Between us we earn around £4100 per month (disposable income in bank after deductions) and after our outgoings we have around £1300 left, this is to pay the mortgage whatever that maybe possibly around the £850 mark at 29 years duration. 

I just think she is rushing into it , I work full time and she part time so I feel the pressure of being the bread winner and have to maintain this job/ income for some time to afford this house. 

Has anyone else been in this situation?, wife says live for the moment and take risks but I like to be cautious & realistic with things especially around pushy sales reps for new homes. 

Do you think this is the right decision to move in the current market???? Please help!!!! Thanks 

babyblade41

Could you condense your OP just a little to make it a easier to read

GDB2222

I found the OP pretty easy to follow. 

The short version is that they have a house he likes. Wife wants to move to a new house costing 50% more, which is smaller and has a much smaller garden. It's also less well placed for schools.  They've spent money on the current house to make it nice. 

The mortgage interest will go up from £50 pm to £500 pm.

Clearly, this is a barmy move. So, the OP really just wants advice on how to persuade his wife.

Stevensuperbike

I’ve tried to consider my wife working more hours say … more to earn another £500 per month to cover the interest but this went down like a sack of lead spuds  

flashg67

I've found you often pay a premium for new homes and it's easy to fall in love with a shiny show house, but they aren't new for long, - I have had 2 in the past, but generally prefer older properties with a bit of character (and I actually enjoy DIY...). What's the reason for the large difference in price btwn yours and the new one - area, amenities etc, or just 'newness'?
As for the current market,, there's always a 'current market' or other economic or personal reason to buy/not to buy i guess

Seems like you can afford it on paper - is 3.25 the best rate around at the moment? Is the part exchange price reasonable?

Maybe you feel you've worked hard to pay down a mortgage at a young age (I was the same until I got divorced!) but do you think you will want to move again at some point and increase the mortgage anyway? It's easy to look at the monthly interest amount in isolation,, bit put in perspective, £500 p/m won't even rent/buy you a house in most parts of the country.
I do understand - we were on a bank staff rate until last year and  paying single figures in interest every month at the old base rate! 

Only you both can make the decision together, but as they say - happy wife = happy life

Stevensuperbike

Thanks, ours is a 1950’s, 3 bed, semi detached, garage and loft conversion. Garden huge and has a summerhouse, fully insulated, electric, bar and tv and 2 sofas in there. Drive on front of house plus front garden.

New house is a 4 bed (double room), detached  with 2 car driveway, garden at rear very small. It has integral garage. 

Just don’t feel ready to move yet. 

£58k mortgage is costing me £231 a month so not very much at all. Compared to the new house it would potentially cost us 4 times as much with a large £500 just on interest alone.

Our current house has just had a new roof costing £5k and wife has decorated everywhere so it’s nice inside and doesn’t look like a 1950’s house. 

I put in a downstairs toilet so making use of the room we have. We have a garage conversion approx 12mx4m which I did and this is now our kitchen/diner. Have a large front sitting room too and a study room. Floor space is massive just not by any means new.  

SavingPennies_2

What's your wife's actual reasoning for the new house? I don't get it..smaller house, smaller garden, less convenient for kids school, bigger mortgage. Other than having a shiny new build it doesn't sound like you would be in a better position. Maybe compromise and do some sprucing up on your current house.

JReacher1

If you aren’t happy in your new house you can always sell in a year and buy somewhere else. It’s unlikely to go down in value. 

You’re only 37 so I sort of agree with you wife. Take a risk and see if you like it. If not just sell and buy somewhere else. 

Alternatively sounds like your wife is not happy with your current house so you could suggest you sell it and find a different new house that you both like. 

Longwalker

Its a no brainer - stay where you are

Right now, we as a country are on very shaky ground, the pound has plummeted, fuel is getting beyond ridiculous and a recession is biting our heels

Why pay more for less?

Your wife is unhappy about something, this needs to be identified and addressed, a new home with debt is not going to solve it

GDB2222

JReacher1 said:

If you aren’t happy in your new house you can always sell in a year and buy somewhere else. It’s unlikely to go down in value. 

You’re only 37 so I sort of agree with you wife. Take a risk and see if you like it. If not just sell and buy somewhere else. 

Alternatively sounds like your wife is not happy with your current house so you could suggest you sell it and find a different new house that you both like. 

I disagree quite strongly. Even if they don’t lose money on the new house, there’s all the costs of two moves. And the upheaval.

Tiglet2

Perhaps your wife wants to be 'detached'.  There are quite a lot of people who think 'detached' is the end all and be all of moving up the ladder.  The reality is that the new build is being sold at a new build premium and the chances of it going up in value in the short term (say first 5 years) are minimal.  

You are both still young and have plenty of time to move up the ladder to a bigger home, but don't move to a home that is smaller than the one you are selling.  You need to feel that you are getting something for those hard-earned pounds and it doesn't sound like this is it. 

Perhaps consider a renovation project where you could get a much bigger property, which needs updating.  You only need to do one room at a time but are more likely to end up with a house worth more than the new build will ever be.

Don't forget that although interest on your mortgage will be £500 in the early years, the quicker you can overpay (either monthly or lump sum), the interest will start becoming lower and the repayment term of the actual loan will shorten (provided you don't change the length of the term each time you overpay).