Which mortgage should I go for?

[positivenote]

hey folkes, ive posted a few times on here and the advice has always been worth while...
my problem is whether to go beyond my budget and look for a loan of more than i had originally decided.
Originally i was looing at a maximum of 350k loan resulting in approx 1300ero payback a month over 35 years, but we've recently seen a property worth 380k which would be ideal for us. This amount excludes all stamp duty and legal fees and furnishing of the property. We have a lump sum of about 20k and possible up to 10K more. A few people have told me that interest rates will be going up if not now but they will over time so our mortage payments will also increase...
What are the pro's and cons of sticking to our budget of 350K or going for the property valued at 380K....
any advice would be greatly appreciated

 

[TheSphinx]

I don't think I am in a position to reply, as I don't have property, but I don't think I would like to pay an excessive mortgage to sacrifice alot of things, alright having the perfect house, not much good if you can't do damn else as yor life is dominated by a mortgage...

 

[Petal]

My advice would be "go for it". I'm pretty much thinking along the same lines and I've been out there looking for a while now and from what I've seen, I'd be prepared to go over budget if I saw something I actually really liked! The stamp duty is not going to be that much higher than it is for 350K, and you have another 20K, so maybe you won't be able to furnish the house quite the way you'd like to straight away, but it's not that bad I reckon.

 

[DrMoriarty]

A lot depends on your capacity to service a higher debt — how 'stretched' will you be to repay €1,400/month? Or €1,500? Karl Jeacle's Mortgage Calculator allows you to calculate the difference in repayments on €350 vs. €380 — and the effect of a rise in interest rate.

 

[pernickety]

Just a thought:
If you set your budget for X, you will always see something better for X plus 1. If you change your budget to X plus 1, there's still going to be something even better.
Most people who stretched in the last 5 years or so are glad they did because their property is worth even more now, but if prices fell - even a little - would you be happy to be paying so much each month (including the interest rate increase)?