Should we max ourselves out on our mortgage?

runningrafan

Husband and I (32M and 29F) are looking to buy our forever home but not sure if we would be stretching ourselves too thin. We have considerable equity in our current home due to my parents helping us get on the property ladder 6 years ago.

Figures
House price: £700k listing price
Deposit: £250k
Mortgage: £450k @ ~3.9%
Household income: £83.5k (£38.5k and £45k). By January very likely to be 90k.
Debt: ~10k on 0% CC but this will be paid off, student loans

Monthly
Current take home: ~£5k
Mortgage: £2.3k
Bills: ~£1k
Leftover: ~£1.7k

Key considerations:

• Mortgage would be £2.3k (46% of our take-home pay), after bills leaving us with roughly £1.7k pm
• We are both software devs fairly early in our careers, we would hope/expect our salaries are likely to increase in the coming years
• We are not having children so do not have to consider maternity or costs related to children
• We live quite a frugal life except holidays which are easy to cut down for a year or two if needed
• Have about £25k savings in S&S/cash between us
• We do not want to do a 'middle-ground/stepping-stone' move and end up moving again in 10 years time due to stamp duty and other moving costs

We absolutely love the house we have seen and have not found anything we like as much, however we are trying not to get ahead of ourselves and rush into anything. I am concerned at the percentage of our take-home going on the mortgage and worried we would end up house-poor.

Do you think we would be stretching ourselves too thin?

ACG

I bought my house back in 2017. I didnt max myself out, I could have gone about £40k more. However, I was self employed and my income can be all over the show and my mortgage went from around £300 up to around £500 a month which at the time seemed huge (especially when council tax and everything else was going up)... Now though, my income has increased and become a more stable. I dont even think about it because £500 today is nothing like £500 8 years ago. 

It barely buys a pint now a days! 

Thats one side of the argument. 

The other side, I have had a customer since 2015. His income was over £100k back then. He travelled all over the world on private jets for work. 

Because of AI, he could see his job become becoming redundant or having to change which he didnt want to do. He took redundancy expecting to walk into a similar job but he didnt and has built up a lot of debt but now has a job on a little less than he was on 10 years ago and a whole lot less than he was on 3 years ago. 

The point I am making I suppose is that maxing yourself out in principle is fine and I wish I had done in hindsight as I now want to move again. However a lot can change and quickly - jobs, health etc etc and so what happens if/when that happens? 

Caz3121

have you found a lender that would lend you £450k?
https://www.moneysavingexpert.com/mortgages/how-much-mortgage-borrowing/

amnblog

You can protect yourselves by taking an extended mortgage term and a five year fixed rate.

In this way,

You know you can make the payments now

You wont have any nasty surprises with interest rate increases for the remainder of this decade

An extended mortgage term (30 or 35 years) makes the contractual payment manageable. You still, with the majority of lenders, have the option to overpay within limits to keep on track for a shorter total mortgage term

BrilliantButScary

Caz3121 said:

have you found a lender that would lend you £450k?
https://www.moneysavingexpert.com/mortgages/how-much-mortgage-borrowing/

I'm another that would question whether you would obtain a mortgage for £450,000 based on your current income.

https://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-much-can-i-afford/

The amount you have allocated to bills seems low, presumably this is based on the proposed house purchase. 

Luck needs to go with you when you are taking on a big mortgage debt, unless you have a crystal ball,  and life can change in an instant.

Are you both paying into pensions?

silvercar

I’d go for it, for all the reasons you say, but particularly to wanting to be in a stepping stone house until you reach your dream home. Being young and not planning children, now is the time to stretch yourselves.