Buy the house or pay off mortgage by 42?

Why is the dream house better than your house?

Do you hate your house? Yes it may not be ideal and may need some investment but if you put £30k into the garden surely you are increasing its value and get to enjoy your dream garden?

I say this as you are at a unique point to take one of two roads. As I see it one is a ‘better’ house but will tie you to working for 20 more years.

the other is a huge amount of financial freedom to retire very early, take up hobbies and do as you please.

if I were you I’d stay in the current house. I say this as someone doing the same. I’ve never particularly loved my house since I bought it. But there nothing really wrong with it. I could just get a better one. But I won’t because I’d like to retire between 55 and 60 with enough money to enjoy myself and staying in my house allows that. If I did similar to you I could also move to a ‘better’ house but I’d be working until 68 for sure and I on balance don’t want to do that. I am also single and don’t want my health and work to be essential to being able to afford my home as I get older

We had this debate last year - even sold our house and offered on dream one. Then chain was a bit of a mess and it gave me time to reflect and we ended up pulling out.

I haven't regretted pulling out once since. Our house suits us - yes ideally we'd have a bit more space - but there's a lot we can do here to make it great and it costs SO much less than moving! We can be mortgage free tomorrow if we wanted (we have enough savings, but opting to keep it in investments vs mortgage for now). We will have paid it off in less than 8yrs, will still have savings and investments which would have lost a chunk to SDLT if we'd moved. I will then go down to 3-4 days per week, and as DH is already 4 days we can spend a day a week together whilst kids are at school. We will be about 43/44 by then. If I wanted to later on help kids through uni or get on the property ladder I can up my working days and use the extra to fund that. It gives me so much more freedom in future.

When you say you "found" the other home*, were you actively looking or did it fall into your lap?

For me it is an absolute no brainer to be mortgage free and on the glide path to retirement in a fully secure home (because that is what I did and what I am now doing). But your posts all seem to be trying to convince yourself that the half-million pound house you have been living in for x years suddenly has all these flaws and outrageous costs to make it comparable to one that has suddenly turned your head.

(*I consciously avoid saying "dream home" because there is always a pay off - in this case an extra 20 years of mortgage payments.)

Buy the dream home. We did and only sold it because we divorced. I've never regretted buying it at all.

I doubt they bought a house aged 18 though. There may have been house price rises to account for some equity but I'm assuming they didn't pay £150k for the current house hence curious as to why the discrepancy.

It probably didn’t cost £550k 20 years ago?

We bought a flat for £160k in 2002, worth £500-550k now. We paid it off in 14 years and were mortgage-free in our mid-thirties (then we moved, so sadly no longer mortgage-free. The next one is likely to take us 20 years to pay off, despite me earning about 5x what I did in 2002 🤣)

Location perfect, house perfect, all done. 42 is very young to be mortgage free- unless you’re focusing on a FIRE -style early retirement, I would say buy the house you love, and congratulate yourself on getting it so early in life. You are at an age when many people are still looking to increase their income and get pay rises/better jobs, so you may find that you can pay the bigger mortgage off faster.

but only you know how much pleasure you will get from the dream house versus financial freedom. Good luck! Nice dilemma to have!

Renting places all over the world is no consolation for having to spend too much time in a house that isn't your dream home, particularly when you're retired.

Never underestimate the luxury of space, even if there's only two of you in the house. I would try to work out a way to pay off the additional cost off in 10 years and buy your dream house.

I probably wouldn't, but that's because I'd rather spend my money on travel. It all depends what is more important to you.

I'm curious as to how you are in a position to have paid off a £550k house by 42 (presumably after working 20 years) but to then take 20 years to pay off an extra £150k.

Buy the house. That's how it works, gradual trading up. Nothing gives more quality of life.

I say just pay the mortgage, retire early and you can rent multiple lovely places anywhere in the world with all your time.

I would stay, pay off the mortgage, and then enjoy making your current home as lovely as possible.

Do a list of what you need to do to your present home to make you love it, and what it would cost. When you have done that workout what it would cost you to move hidden expenses extra furniture for example. Using professional’s I achieved what I wanted and paid off my mortgage. Good luck to you.

Buy the house!

I would absolutely pay off. There's no price you can put on peace of mind.

I think I might move to the dream location but look for a cheaper property there.

We were mortgage free at 32 and 36, upgraded to our "forever home" taking on a £150k mortgage... worth every penny BUT we did go from a 120 square.metre house to a 230 square metre one, so a really tangible difference for the price and we were at a life stage with 4 kids under 9 so we knew we'd really need the change.

Being mortgage free is pointless if you're stuck in the wrong area or a too-small house.

I’d say 38 is far too young to be limiting your dreams and ambitions!
If you can afford to pay the new mortgage without sacrificing pensions and emergency funds and all the other boring stuff then go for it.
You're a long time dead but at 38 you've hopefully got a long time alive yet. Might as well spend those years in a home you love.

I did it - four years ago. It’s a bigger mortgage - but I still get a little thrill every time I open the front door.

It’s beautiful, and the area is perfect. In walking distance of my elderly parents, bus stop straight into work. Future proofed.

it’s a very personal decision - it depends on what your priorities are. I will hopefully enjoy this home for decades to come.

It sounds like it isn’t a huge risk - think about what your have to sacrifice. I have slightly less to put on savings every month and take less long haul holidays. I’m fine with that. But that’s me

If you're only 38 you could potentially be living in your dream house for another 60 years. Id go for it!