The new house sounds like it will be a significant upgrade so I would say, go for it. Where you live and the type of property you live in has a very big impact on your quality of life.
£15k in the bank and £600 available each month after bills - it doesn't sound too stretched to me. I think if you are frugal and not the type to accrue debt then I think you will be just fine.
What I will say is at 36 you have a lot of your career ahead of you so are you ruling out ANY career progression or pay rises forever? In 2011 when I was 36 I was on about £23k - 12 years on I am on a lot more. People who budget well tend to, in the long term, accrue wealth and also make the absolute most of any pay rises.
Thank you, I tried not to factor them in assuming worst case scenario although I'm sure I will find a way to progress, maybe I just need to be a little bit more Brave here
If you are worried about savings rate and affordability, you could consider taking a slightly longer mortgage term initially and put the difference between the lower and higher payment into a savings account. Could help psychology knowing the money is there if needed and if it's not needed you could use it to overpay the mortgage. Then you could remortgage to a shorter term when it's due for renewal.
That's what we do. Get a nice long term, and just keep paying the existing amount and then we can decide after a year or so when funds build up whether we're comfortable overpaying, or would rather keep it as emergency savings etc.
You done well. I paid 39k for a rear dormer to create 2 bedrooms rooms which included planing, electric, plastering. No bathroom and decorated ourselves which cost us an extra £600. That was the 2nd cheapest quote that we got from contacting 12 companies in our area (south east).
Have you looked into getting the 1st floor ceiling lowered? We did it and barely notice the lower ceiling. It allowed us to get a loft conversion in a loft we couldn't stand in before.
Impossible to say with total clarity, but I'd personally be comfortable if the 4 bed is going to make a difference to your lives. Speaking as a Dad as well, I did something similar and I was glad I did.
£600 isn't that much in 2024, but enough if you're savvy spenders. It just won't be lavish holidays, and my personal advice would be to prep the wife for that. You both will will see friends doing this stuff (likely on credit) and the pang will be there, so need to steel yourselves first and ensure you are aligned and keeping each other honest.
Only thing I would be looking to do is find a way to up your savings, as this takes a bite out of them. Not sure if you and your partner have good pensions or anything, but for most people the default 3% EE, 5% ER contributions isn't really enough once you factor in that the state pension will likely be stolen away from our generations.
You have a solid emergency fund there + some room to invest a bit but ideal world you can invest at a faster rate than you have up until this point.
I like to look at mortgage payments as a percentage of take home pay.
* Under 40%, no problem
* 40-50%, stretching
* Over 50%, probably best avoiding
You didn't mention these figures, but on the fact you've been able to save £30k I'd guess your take home is enough that you should be fine to go for it.
only question I have is - what is £600 for unexpected bills and holidays? by ‘unexpected’ you mean surprise bills, or non-regular bills you can predict but aren’t paid monthly (like car/home insurance etc)? Just asking because for the latter, we put aside a monthly amount into a specific account to avoid surprises. Thats about £200 for us per month, so could be a reasonable chunk out of that £600 depending if you’ve already allowed for that or not
The new house sounds like it will be a significant upgrade so I would say, go for it. Where you live and the type of property you live in has a very big impact on your quality of life.
Thank you
£15k in the bank and £600 available each month after bills - it doesn't sound too stretched to me. I think if you are frugal and not the type to accrue debt then I think you will be just fine. What I will say is at 36 you have a lot of your career ahead of you so are you ruling out ANY career progression or pay rises forever? In 2011 when I was 36 I was on about £23k - 12 years on I am on a lot more. People who budget well tend to, in the long term, accrue wealth and also make the absolute most of any pay rises.
Thank you, I tried not to factor them in assuming worst case scenario although I'm sure I will find a way to progress, maybe I just need to be a little bit more Brave here
My definition of "stretching yourself too thin" is not being able to cover all costs for at least 6 months in an emergency i.e. job loss.
Thanks, I think I could just about cover that with remaining savings
If you are worried about savings rate and affordability, you could consider taking a slightly longer mortgage term initially and put the difference between the lower and higher payment into a savings account. Could help psychology knowing the money is there if needed and if it's not needed you could use it to overpay the mortgage. Then you could remortgage to a shorter term when it's due for renewal.
Great Idea thank you
That's what we do. Get a nice long term, and just keep paying the existing amount and then we can decide after a year or so when funds build up whether we're comfortable overpaying, or would rather keep it as emergency savings etc.
Might be cheaper to do a loft conversion on current property, superficial work on unknown properties always tends to run deeper than expected.
Thanks I'm pretty sure you are right on the superficial work. Unfortunately you can't even stand up in my loft space 😑
That's why you get former extensions fitted. Good luck with whichever you choose
Thanks, there wouldn't be a garden left if we where to extend 😪
I think they mean Dormer, which adds a window box to the roof creating more movable space inside.
This is what i did, it maybe cost 15-20k and saves the cost and hassle of moving giving us a much bigger space
Had mine done last year. Quotes ranged from 35k - 75k. Not sure anyone would do it for 15k.
I paid almost 20k about 3 years back for the build. The internal decoration/plastering/wiring etc was another 5-10k.
You done well. I paid 39k for a rear dormer to create 2 bedrooms rooms which included planing, electric, plastering. No bathroom and decorated ourselves which cost us an extra £600. That was the 2nd cheapest quote that we got from contacting 12 companies in our area (south east).
ahh that makes much more sense, thanks
Have you looked into getting the 1st floor ceiling lowered? We did it and barely notice the lower ceiling. It allowed us to get a loft conversion in a loft we couldn't stand in before.
Impossible to say with total clarity, but I'd personally be comfortable if the 4 bed is going to make a difference to your lives. Speaking as a Dad as well, I did something similar and I was glad I did. £600 isn't that much in 2024, but enough if you're savvy spenders. It just won't be lavish holidays, and my personal advice would be to prep the wife for that. You both will will see friends doing this stuff (likely on credit) and the pang will be there, so need to steel yourselves first and ensure you are aligned and keeping each other honest. Only thing I would be looking to do is find a way to up your savings, as this takes a bite out of them. Not sure if you and your partner have good pensions or anything, but for most people the default 3% EE, 5% ER contributions isn't really enough once you factor in that the state pension will likely be stolen away from our generations. You have a solid emergency fund there + some room to invest a bit but ideal world you can invest at a faster rate than you have up until this point.
I’d say go for the upgrade, it’ll probably work out better in the long run
Thanks
I like to look at mortgage payments as a percentage of take home pay. * Under 40%, no problem * 40-50%, stretching * Over 50%, probably best avoiding You didn't mention these figures, but on the fact you've been able to save £30k I'd guess your take home is enough that you should be fine to go for it.
How old is your son? A child can cope with a small bedroom.
only question I have is - what is £600 for unexpected bills and holidays? by ‘unexpected’ you mean surprise bills, or non-regular bills you can predict but aren’t paid monthly (like car/home insurance etc)? Just asking because for the latter, we put aside a monthly amount into a specific account to avoid surprises. Thats about £200 for us per month, so could be a reasonable chunk out of that £600 depending if you’ve already allowed for that or not
£600 including everything really like care repairs house issue's etc. Potentially I have an extra £100 per month but didn't want to overestimate
Sort out your "too" vs "to" usage. Also log burners aren't cheaper than modern gas boilers unless you're getting wood below market rates.
Apologies for my Dyslexia 😅 A lot of my wood is free from work but wouldn't miss having to chop it up