I think I will be ok, but still want to look for sanity checks

I will close my new primary home soon. Current house I think can easily be rented out to cover mortgage + a bit buffer (I got the house before Covid and rate is 2%).

I'm still thinking if I would be ok with new mortgage. Current income is ~220-240k$ (single income, my wife is just back to work so her income is unstable. I don't expect her to bring more money, we have 2 small kids and we appreciate she can have an easy relax job to spend more time for our family)

New mortgage will be around 5k5 (900k with 20% down, 6.3%). I don't have other debt (there is a car note 500$ end in one year).

I have around 500k$ in retirement saving (401k, 529, HSA, etc... 20% down for new house is from cash/ personal account not from retirement).

The concern is I have been saving hard (just got current job for ~4yrs, before that I couldn't save anything because newly marriage, new born, etc... messy middle so I know I was behind) to accumulate my asset. Each month I put aside around 6-8k$ in saving. With this new mortgage, it will be only half, or maybe even less.

But my family need this new house: closer to work, much bigger house that has space for every members, closer to friends, I plan will have my mum/dad move to live with me in couple of years when they are older. We can just live in this current house, but also missing all the above.

I think financially we will be ok. I will try to have side income, also for couple of years we will need to aggressively pay down the mortgage (ideally to the point each payment the portion go to principal > interest)

All these thoughts are just around my head these days and keep me awake. It's nice to just write it down :D