Can You Afford to Take on A Bigger Mortgage?

Many people dream of owning a bigger home. For those on the property ladder, looking at houses that are larger or come with a higher price tag could well be alluring, but reality and daydreaming are two different things. Being confident that moving to a bigger or more expensive home can mean a bigger financial outlay and adding more debt to increase your mortgage and ultimately increasing your borrowing.

For many people, need outstrips desire when it comes to moving to a bigger home. However, despite the need, you should always be 100% sure that you are indeed in a good position to take on a bigger mortgage and all the expense that moving to a new and bigger home comes with.

How do you know if you are ready to increase your mortgage?

Financially comfortable

This is given. Most people, when it comes down to it, will know if they are financially secure enough to absorb the additional cost of moving to more expensive property. Looking at homes for sale and acting on this are two different things.

Can you really afford it? If you are comfortable paying all of your bills and have enough disposable income to put towards a bigger mortgage, then there is nothing stopping you from enquiring about taking on a bigger mortgage. However, if you are struggling with some of your bills or debts, then now might not be the best time to consider adding to what you already owe.


If you are comfortably hitting savings goals and/or investment targets, then it could be a good indication that you are ready to take on the added financial burden. Being confident you will be on track to provide for your retirement and still be able to afford an increase in mortgage payments will help you to make the decision.


Are you suitably insured? Should the worst happen to you and you aren’t around or no longer able to pay off your mortgage, the burden will fall to your family to meet the payments. Knowing you have the right level of insurance premiums to provide a nest egg for your family to ensure they meet payments is vital.

Home insurance, life insurance, health insurance and long term disability insurance are often the most common types of insurance people take out—long term disability insurance. Having a policy that will cover you should you not be able to work for long periods or ever again after an accident or illness will cover you for loss of income.

Good Credit

Having a good credit score means there will be more options and better rates available to you when applying for a second or a bigger mortgage. While you may have enough income to accommodate the extra payments – experts agree that a 43% debt to income ratio or less is preferable, if you are skipping out on payments or adding more debt than lenders are comfortable with will damage your chances of being accepted the first time or being offered preferable rates.

can you afford a bigger mortgage

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