Which is the better financial option?

[HebryFas]

currently paying a mortgage that is easily paid, at around 1/7th of my salary. I’ve got a MIP to borrow much more, making my payments around 1/4 to 1/3 of my salary. Current house is small but I love it, having looked at other houses not many are as nice inside. But we do need more space.

I don’t know whether to pay down/save what I can now, given i can save around 1,600 a month, which would then reduce my borrowing in say a couple of years when I buy, or to buy bigger now and just borrow. I’m not sure 1,600 a month would even keep up with the cost of rising house prices if you see what I mean? In which case I would still need to borrow similar later on.

mind is boggled a bit by it all. Thanks in advance for any advice!

It’s a really tricky one. I would be tempted to stay put and save for a year or two. Ordinarily I would say ‘move, and move now’, but it does seem as though there is a realistic chance that house prices might come down in the next year or two, and you don’t want to buy / borrow at the top of the market.

Good luck whichever route you choose to go down!

Thanks! It’s driving me crazy not knowing which to do! I also don’t want to buy for the sake of it as I love my house but sadly it is too small now DP is here too

We're waiting a couple of years to see how things play out with the cost of living/recession talk. That said, round here the house prices have shot up over the last couple of years but seem to have levelled out a bit now. You could also keep an eye on what comes up and make sure yours is good to go if something perfect comes up sooner?

We have this dilemma and are moving now. Given we will be paying off capital and have a comfortable deposit I don’t see this as a risk…if house prices dip they’d have to go down 25% to land us in negative equity and otherwise it’s just a cost of housing. But otherwise we will be priced out fairly shortly even if prices only rise in line with inflation.

Can you look into an extension instead? Would that help? Moving house is expensive, there are lots of costs that rack up the bill, not just the monthly mortgage payments.