Taking on a higher mortgage in the current Climate - WWYD

**jamesbrown** · 24 April 2024, 10:30

Originally posted by Matc View Post

worst case sell the house for more than I've bought it in a couple yrs hopefully making a decent return and i'm better off

That is hardly the worst case. The worst case is you lose a shedload of money because the market changes, together with the costs of moving (stamp duty etc.).

As to what you should do, I think you've analysed the situation already and you know your options. No one can read the future of the UK contract market for you (there isn't a "market", rather a large number of small markets), but the state of the market thread tells a story about the current situation. That can change quickly, of course. It is unlikely to change before a change in gov't and a marked shift in interest rate expectations, both of which are squarely within the timeframe you need to think about. I certainly wouldn't worry about collapsing the chain, though. Obviously, you should've thought more carefully beforehand (it is bloody irritating when someone collapses a chain because they can't make up their mind), but chains collapse all the time, circumstances change.

**northernladuk** · 24 April 2024, 21:39

Didn't read your post in detail but it's exactly the same question d000hg asked not so long ago. Thread is here.
https://forums.contractoruk.com/gene...ive-in-it.html

My answer would be the same. Go for it. Check out the worst that could happen and try come up with an exit plan should it hit. If you can somehow cover it then go for it. Upping your quality of life is priceless IMO. I've put a much much longer post up of my thoughts on that thread and they haven't changed.

Also, just imagine the higher quality of totty of your preferred gender a really nice house will pull as well. Happy days.

But on a more serious note you could also factor in a partner at some point in the future which will take the strain off. It won't be all on you for the rest of your life. If not a partner AirBnB or rent a room...

Anyway, read d000hgs thread and I think you'll get your answer.

**gables** · 25 April 2024, 07:56

Option (1) all the way :-) You've got savings (200-250Kish) which ought to get you out of any money situations that might arise.

**pjt** · 25 April 2024, 12:00

Originally posted by Matc View Post

Asking what you would do in this situation as I need a sanity check

Background, 42yrs old, Currently Single, No Kids, Started out in Front end coding, morphed into UX/UI about 10yrs ago, contracting straight for about 8yrs now, fortunately never been out of work for longer than a few weeks, and even then it was down to being DBS checked and vetted waiting for things to go through. However when I started my last role about 12 months ago I certainly wasn't getting the number of call back's I usually get. Been working ever since I was 18 and starting to become a little disillusioned with this country.

Been offered the opportunity to buy a house which is perfect, village, close to friends, easier for when needed into London, still close to family, house is being sold for 200K less than what it was bought for 3 yrs ago right at the peak!! Plus with extensive bathroom and kitchen renovations, I really feel it is a great house for the money, however this means taking on more mortgage debt (Circa 200K) And extending the timeframe back to 25yrs!! (total mortgage would be back to 500K, Currently mine has 13yrs or so left at 300K, overpaying each month so hopefully done by 50ish...) I guess I've been reading the state of the market thread over the last year and think at somepoint my time will come and I will be out of work, which would be a huge stress with high mortgage payments, plus with a lot higher interest rates now on repayments with a new mortgage, FYI I put house on market and I am exchanging next month as I was originally dead set on this, but my Gut and anxiety has been stressing me out with the predicament of what might happen in the future, I certainly don't want to be working into my 60s, and reading the other threads I wonder if the contractor market will recover, also a lot more people coming into my current field of work than there was 12yrs ago, I'm now noticing the agencies are outsourcing UXUI as well as coding to offshore teams. Current contract is till end of the year.

Option 1, Gamble, worst case sell the house for more than I've bought it in a couple yrs hopefully making a decent return and i'm better off
Option 2, Downsize, free up loads of capital and invest, continue with current mortgage knowing i've got a healthy savings situation (200-250Kish) Excluding current SIPP and pensions, and keep paying the current 3.5% mortgage rate and live a lot more stress free life.
Option 3 - Stay put (piss the entire chain off/Move to similar porting the mortgage across keeping current rate.
Option 4 - Rent with friend, invest/save everything, buy again if I settle with someone, using interest on savings to pretty much cover a modest rental

Just looking for honest opinions on what you would do, also FYI a friend would move in for a couple years at least, so with his additional money this would probably mean my outgoings are similar to what they are now if I did move to the larger property.

Living in the SE every where ie expensive, and downszing whilst still trying to stay in a detached might be difficult from a mental point of view, knowing i've gone from a good house to an OK house

Also would still keep back 50K savings in an easy access account if I was out of work for Option 1

Option 4 - Leave this country, start somewhere else new, live on a beach in Thailand

Hoping anyone without any bias can share their opinions

Thanks

I moved to a more expensive house last year and at the time I was coming to the end of a long stint in work and was a bit concerned about not having an income afterwards. I'm actually one of the ones now on the State of the Market thread noting a lack of any gigs this year. So probably worst case scenario for me. I'm not overly concerned as I have a good warchest and other income coming in that covers the mortgage which is the reason I pulled the trigger on the house. I'd say if you have means of steading the ship somehow then go for it but if not I'd have a hard think. Shounds like you would have £50k warchest left over for option 1 just think how much of that your gonna eat into if your out also what would you want to spend on the house when you move in. Moving isn't a cheap process.

**t0bytoo** · 25 April 2024, 12:38

If you've been working since you were 18 and never lived or spent significant time overseas, this might be a good time to do that. I spent the 2002 downturn travelling and had a great time. If I was in your position, I wouldn't max out on a huge mortgage. But I am older than you, live in a one bed flat and alway choose time off over money.

But you've got this far in the process so you must really want to buy the new house. If you don't have any work, you can always rent out rooms or the whole house and enjoy yourself in Thailand.

**woody1** · 25 April 2024, 13:29

Originally posted by Matc View Post

...current 3.5% mortgage rate...

Presumably that's a fixed rate taken out before rates shot up? How long has it got to run? I guess from what you've said, you can't increase it to £500k to cover the new house? What would the rate be on a new £500k mortgage?

I wouldn't carry on with the sale (option 2) just to avoid pissing people off. People change their minds, and chains break down, all the time.

As long as you've got a decent warchest/savings to fall back on then, if you really want to buy the new house, then I can't see any reason not to go for it.

**Zigenare** · 26 April 2024, 10:23

Whatever you do, don't think about it sensibly, don't consult a financial adviser and definitely don't make a plan.

Might I suggest you create a poll and let a bunch of random wastrels help determine your future?

Taking on a higher mortgage in the current Climate - WWYD