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Original poster

Mortgage free or amazing house?

95 replies

Mayhemmumma · 19/08/2021 20:32

What to choose - very fortunate position I realise.

Sell our house, pay off mortgage buy nice house in cash further out of ideal location, that bit too far to easily see friends or kids attend their current clubs but could go to a lovely school etc.

Double our mortgage (to 350k) buy an incredible house in great location? Lifestyle etc set up long term.

OP posts:
user1493494961 · 19/08/2021 22:39

The cheaper option still sounds nice.

purpledagger · 19/08/2021 22:41

I'd go mortgage free, for a couple of reasons;

  1. I'd then be able to start saving for my children's futures - university, deposit for first home. They'll benefit more in my lifetime and Mumsnet has taught me that inheritances aren't guaranteed.

  2. Although I expect to have to work until I drop, I would hate to be mortgaged up to the hilt at retirement age if I can help it.

I think there is a third option of buying a cheaper house, that can still be your dream house, but less financial burden.

2bazookas · 19/08/2021 22:45

Mortgage free has benefits you might not have thought of: when you have absolute security, a couple don't need two full time jobs. Time to consider the other options;;

Only work part time
Leisure for hobbies ; more time for the kids and each other.
Retire early
Take a "gap year"; travel . Do a house swap to the far side of the world.
National economic disaster, mass redundancies, monster inflation.. won't affect you. Your home is secure.

SuddenlySusan · 19/08/2021 22:46

@nancybotwinbloom £350k in the north west, dependent on where you are, is not amazing. It’s a three bed semi where I am, that’ll need upgrades too. You’d need close to £700 to even start at the lower end of amazing.

ElizaDoolots · 19/08/2021 22:50

The £580k house still has to be pretty nice surely for that price so I’d go for that one and enjoy being mortgage free.

ElizaDoolots · 19/08/2021 22:52

Or option c, go mortgage free on the cheaper main home and get a mortgage on a holiday home that you can use for yourselves some of the time and rent out the rest of the time.

boomboom1234 · 19/08/2021 22:55

I'd go for the bigger house in the best location every time as it sets you up longer term and it's an investment in your future.

knittingaddict · 19/08/2021 22:59

Mortgage free.

That's not just hypothetical either. It's what we did on our last house. We were offered a mortgage of £400,000 and took out a mortgage of £100,000. We are mortgage free now.

Ikeameatballs · 19/08/2021 23:05

I know that you need to make a decision right now but remember, that decision is not forever, you can move again if you want/need to.

I chose a larger mortgage/bigger house when I moved because it was right for the needs of my family at the time. I could have stayed and cleared my mortgage v quickly. In 10 years when the dc should have moved out/be moving out I think I’ll move again to be mortgage free.

This is not a forever decision. Do what is right now/you think will be right for the next 5 years. Then re-evaluate.

SuddenlySusan · 19/08/2021 23:05

Mortgage free for me.

housewifeathome · 19/08/2021 23:07

We are late 30s and mortgage free. We've had the same conversation- whether we would borrow to buy our dream house. I think given the economic uncertainty following Covid, we'll stay put for a few years.

We are considering taking out a small mortgage to extend our current house in the meantime.

No mortgage for us means: nice food, nice cars, holidays, security, savings, meals out, decorating our house to a good standard, and generally no money worries.

Having read about your jobs on this thread I would advise mortgage free for now. A 350k mortgage is a lot of money to repay each month. I would echo what others have said - having no mortgage is very liberating and a huge safety net in the event of job loss / illness.

bettyboodecia · 19/08/2021 23:10

Dream house for sure. It sounds amazing, and the arguments that going mortgage free is somehow "safer" financially are nuts; much better financially to spend your money on a real estate asset than fritter it away day to day spending.

Cheerfulcharlie · 19/08/2021 23:13

I’m really surprised so many people say mortgage free. I’d definitely go for the expensive house. Even if you only live in it 10 years, it will very likely increase (it’s not a new build is it?) substantially in value. Say it goes up by 50% in that time, you’ve made almost £500k on the dream house but less than £300k on the cheaper house.. (or a more conservative 30.% £300k increase v less than £180k) . You’d also have the pleasure of living in a lovely house all that time and can downsize for retirement even if the mortgage isn’t fully paid off. Worst case scenario your DH can’t work and you have to sell the house - it’s still likely you’d get at least as much as you paid - id just make sure I had enough to cover around 6 months mortgage just in case - so you had time to sell up without it becoming a repossession or distressed sale situation. You’re only in your 30s , go for it!

Iwantcauliflowercheese · 19/08/2021 23:16

We went from being mortgage free to buying the expensive house. We actually didn't like it as much as we thought once we had moved in. Also it didn't go up much in value in eleven years. We downsized and are mortgage free again. It's such a relief.

Zenithbear · 19/08/2021 23:20

In your 30s with small dc I would definitely go for the bigger mortgage because that's exactly what I did.
Plenty of time to gain loads of equity and downsize later on.
It's a bit too early to just pay off your mortgage unless you're going to be investing in a rental or holiday cottage.

housewifeathome · 19/08/2021 23:21

@2bazookas

Mortgage free has benefits you might not have thought of: when you have absolute security, a couple don't need two full time jobs. Time to consider the other options;;

Only work part time
Leisure for hobbies ; more time for the kids and each other.
Retire early
Take a "gap year"; travel . Do a house swap to the far side of the world.
National economic disaster, mass redundancies, monster inflation.. won't affect you. Your home is secure.

Yes, I agree with all of this.

Also bear in mind that as well as mortgage, the bigger house will often mean much more Council Tax too, and potentially more heating. It isn't "just" the mortgage repayments.

I know a couple who moved from a 350k home to a 680k home and are still struggling with mortgage, council tax and bills five years later. Confused

Really, it all comes down to affordability. A large beautiful, expensive house is fabulous but not if you can't easily meet the repayments.

ZaraCarmichaelshighheels · 19/08/2021 23:32

Can you actually afford to run the big house? The mortgage is only a part of it, what about Council tax, heating bills, fuel bills for the car, maintenance bills for a big house, you say it also needs work as well, how are you going to fund all of that? often people get so blinded by a house and only think of the mortgage repayments and forget monthly running costs which can be massive.

Cranberriez · 19/08/2021 23:34

Mortgage free no doubt

episcomama · 19/08/2021 23:34

Location is key. Always. I wouldn't be too fussed about being mortgage free if it meant living in a less than ideal location. Increase your mortgage.

OppsUpsSide · 19/08/2021 23:46

100% go for the better house in the better location

Harriedharriet · 20/08/2021 01:36

When mortgage free better spending power for nicer holidays etc is one possible outcome. Financial freedom is very valuable, there is a lot of value in it.
As posters have said the running costs of a larger place can be high. Play with those numbers, calculate your costs over a period of ten years - the cost of the new loan, the cost of the interest on that loan, the cost of running the house, the cost of tax etc. Try and figure how much of a return that would give you in an investment portfolio fr the same period of time.
See which is worth it to you.

Your dh is in a physical, and demanding job. Financial freedom makes it possible for him to stop if he needs to. No small thing.

Kinsters · 20/08/2021 04:20

I think OP said the two houses are fairly comparable in size, it's the location that is different.

Personally I'd go for the more expensive house purely because you said it would be too far to see friends in the cheaper option. And it sounds like with the more expensive place you're kind of maintaining the status quo with your lifestyle eg working, socialising, DCs schools (?). I'd place a high value on that. You can always move again in 5-10 years and adjust your lifestyle once you and the DC are a bit older.

Onfire · 20/08/2021 04:28

We had a similar dilemma and actually just went for the middle option which is , keep a smaller but comfortable mortgage on a nice but not super amazing house in a better area rather than going further out to be mortgage free.

We looked at increasing mortgage to our max which coincidentally would have been between £350-380k to buy something amazing but we wouldn’t have been enjoying holidays and would probably find it a bit stressful should anything happen

Clarinet53 · 20/08/2021 04:52

My husband and I would have a similar income to you. A £350k mortgage is doable but with children I would always choose to be mortgage free and closer to a town and friends.

I moved to a house in a village with no amenities at all.

Every pint of milk I have a 10 mile round journey. I spend all my time ferrying the children round (school/friends/clubs) which is expensive and time consuming. This would be n top of the additional mortgage and utilities.

If you're paying £1200 a month on mortgage on average incomes it doesn't leave you much spare for doing the property up and being able to enjoy your free time

garlictwist · 20/08/2021 05:06

Unless it was a relatively small mortgage, I'd go mortgage free every time. A house is just a house and people get bogged down for the "amazing forever home" when there are more important things in life. A 350k mortgage is insane!