Which would you prioritise: Moving to a good area, or being mortgage free by 50

[CornerOfTheSky]

We currently live in a run down area. Lots of crime, the general area is pretty unloved, and the secondary schools are rough. That's on paper anyway, in actuality, we've found it an OK place to live so far, but we don't have teens yet.

For the longest time, our plan has been to move when the kids reach secondary school age, as we'd rather raise teens in a place where they can have more freedom and less worries about crime, etc. It would be better education-wise, too.

House-wise, we'd gain a little more space by moving. But to move to a 'naice' area (as mumsnet likes to say), we are looking at at the next price bracket up from where we are - it's a difference of around £100k for the same type of house we are in now. There are no cheaper options in between without moving very far away, which we are not prepared to do.

Staying put, we'd be mortgage free by 50. Moving would mean we'd likely be paying off a mortgage until closer to 70. The better financial decision is to stay put, but our hearts tell us moving is the right thing. What would you prioritise in this situation?

Well you make your area sound horrendous so I would move.

You could rent your house out and rent in the naice area. Then move back to your house when the kids have finished school.

Move!!!

Definitely move.

What is the logic in renting in the more expensive area for the duration your kids are at secondary school, which could easily be about 10 years if you have 2 or more children?

All you are doing is effectively paying the increased mortgage (for someone else) on the nicer area for the duration, with nothing to show for it in the end

That and the complications of being a private landlord and the limited mortgage interest relief makes this a poor financial choice

Can you move to the nicer area but a smaller house?

It’s hard to know if your impressions of your current area are correct or not. My instincts would be to stay. Having a mortgage until you’re 60, 70 is madness. Many, many people I know lost their jobs in their 40s and 50s and were never able to get a job paying their previous salary again.

I live in an area of a city that was previously described as run down. Virtually every family from the baby and toddler groups I attended moved to a nicer area. We stayed. The schools were fine. My DC excelled. The schools had lots of input from various high-end organisations doing outreach work in the inner cities, and provided a lot of enriching activities for free. My DC did not get involved in gangs and muggings. One once had her bike stolen- that was it. As teens, they had so much on their doorstep that they could do and go to by themselves. They didn’t need ferrying around. And the thing is, loads of other people stayed too - we just didn’t know them at the time. Gradually, over 20 years, the area itself changed, too, and it’s now very desirable.

We moved and we lived in a low crime area, we moved for school catchment and space and are in the naicest area of town. Not worried about being mortgage free, we'll pay off the mortgage in our mid 60s if don't overpay and plan to downsize at about 70ish to free up money.

No fun in rushing to be mortgage free somewhere you dislike. Its a move for me.

Move

Move. Being mortgage free by 50 is not necessarily a good financial decision. Most probably a poor one in fact!

Thanks for all the replies. I really thought most people were going to tell me I’m being silly to consider a move, so the replies are really interesting. To answer some questions:

I’ve changed the place names but think a move from Tottenham to Hertfordshire, not somewhere where all the millionaires live but a move to an affordable suburb that is predominantly middle class families.

Is our current area up and coming? The it depends how you class it. Property prices definitely have a significant way to go before they reach their peak, but it’s London so the crime and busyness of the area will remain, and I suspect it will always be slightly on the rougher side despite any ongoing gentrification. There’s a big difference between up and coming London and wanting to live a quiet life in the suburbs, which I quite fancy at this stage in life.

We live in a high knife crime area. I don’t really view my children at risk of getting mixed up in that, as a previous poster said, it’s mainly gangs involved in that. But I would really like them to feel safe and a sense of freedom moving around their local area as teens. Lots of the parents I know here with teenagers say it’s not easy and most teens I ask don’t exactly have glowing reviews of what it’s like to live and go to school here.

We can’t move to a smaller house in a better area, we’re in a small mid terrace and currently have 2 children sharing a room. To downsize now would mean 3 DC sharing long term. I have 4 DC.

DC1 will be doing secondary applications Oct 2021 so we have a year to move or decide to stay.

Renting our current house out doesn’t work financially. The rent money would not cover the mortgage plus what we need to rent in the new area. We wouldn’t be able to afford that. Plus there are very few family sized properties available to rent in the new area, most people buy.

It’s around 100k added to our mortgage for a similar sized house in the new area. £150k for a slightly bigger house (what we’d like, ideally), and potentially £200k for a slightly bigger house that needs improvements (factoring in any work we might want to do in the next decade without eating into equity or adding again to the mortgage).

The increased mortgage repayments would be affordable for us in terms of salaries, but definitely wouldn’t leave us with as much left over at the end of the month as we are accustomed to at the moment, and would become more of a stretch if interest rates rise.

We are mid 30s, looking at a 30 year mortgage, so worst case scenario if we aren’t in a position to overpay at any point, and if we don’t decide to take more money out for new kitchens or any home improvements the whole time we live there, we would be looking at paying off the mortgage by 65.

We are looking at this next move being our long term home for the next 20 / 30 years, but it is a good point that we can always decide to downsize or move area again once the children have finished school / left home, which would give us more options.

Interested to know why being mortgage free at 50 might be a poor financial decision?

Interested to know why being mortgage free at 50 might be a poor financial decision?

Being mortgage free at 50 is nice to aspire to but frequently not possible, especially with 4 children

We could be mortgage free under 50 if we lived in a rougher area but are happy to pay the mortgage for longer to live somewhere nicer. We could be mortgage free now in a smaller house in a worse area

Being mortgage free at 50 is a poor financial choice if you aren’t happy where you live and compromise your children’s education and general opportunities in order to become so

Going against the grain here, but I would stay. My Mum did that, single parent paying the mortgage on a house in a "rough" town. Our street is lovely though, we've had a car stolen once but the street we live in is actually filled with the nicest people. I went to a school that was fine but "required improvement" but I excelled because they really worked with "bright" pupils. Had loads of free extra curriculars, new head teacher who really wanted to bring the schools reputation up (it's now rated outstanding and over subscribed) and I was never mugged, or got in with the wrong crowd. And by the time I went to University I had a good amount of street smarts haha so it went well. My Mum is now nearly mortgage free at 55 and she will be able to do everything she wants. She's amazing. I don't think there was an option to move to a nicer area for us though, single parent she was still paying the mortgage in both names and I am sure she wouldn't have gotten another in her own name. It really does depend on the schools though, speak to people, join Facebook groups, talk to governors or attend virtual open evenings that are all happening this month. Does it have a good ethos and "vibe" of wanting to improve? What are your DC's friendship groups like now?

We did make that move. We enjoyed a few years of no mortgage payments, saving the money that we weren't spending on the ortgsge, then when the time came we had a really good deposit and our payments are low enough that we can comfortably overpay, now, but not have to worry so much if times became leaner.

Move. We moved at 50 - we had paid off the mortgage. We've now got a mortgage that we'll be paying off just as we retire. But much nicer house, with a longed for garden, in a nice area.

Our outgoings have shifted in order to allow for the mortgage.

We did the sums and it worked out for us.

I suppose what would you do with the extra money at 50? Probably move. So why not enjoy the benefits of moving now and paying for it over that time. You can always move again if circumstances change.

I would move infact we were in the exactly the same situation and moved. Spent 120k more on a house with a smaller drive and garden but a nicer area and great school within walking distance. 100% the right thing to do and we dont regret it at all. DC are really happy here.

The value of being mortgage free by 50 should not be easily dismissed, especially if it's in one of those lines of work where you barely see anyone aged much over say 55 or whatever.

AFAIK, most/many school open days are now virtual. IMO OP should attend as many of these as possible in both the current and target area. OP might be pleasantly surprised by what she sees of the local schools. She might alternatively be horrified.

Do not underestimate the value of getting a mortgage paid off. I wonder how many of those saying move, pay the mortgage off at 65, etc, are actually anywhere near 50? Are they just assuming they will continue in their jobs, or better, until that age? The majority of people in their 50s I know - either them or their OH - lost their jobs, were managed out, made redundant, got seriously ill, died, had to give up their jobs to care for parents etc. Major life changes can happen in your 50s - many of which are negative and come as a huge shock.

I would move. You'll have four teenagers in a safe area where you are confident that they'll have access to a better education. That sounds good to me and, if you need to, you could move again once they are through secondary schooling to reduce the length of your mortgage.

I would move in a heartbeat. You can always downsize when the kids have left home and be mortgage free then but it’ll be worth every penny to have your children grow up in a safer environment

We moved. An area that goes from run down to a bad crime ridden place will mean your property value will consistently drop or stagnate. You may be mortgage free at 50, but your home could be worth considerably less than what you paid for it. Or worse, an unsellable house. You could be trapped in that home as vulnerable elderly with crime raging all around you.

That’s the economic argument. The priceless things you lose by staying are - opportunity for your children as secondary schools in bad areas will be underfunded and unruly, safety for yourself and children from criminal gangs/rings activity (some neighbourhoods get so bad that a child must join a gang by teenage years or risk being killed in the street), better physical health- living in bad areas can cause accelerated aging and all the diseases caused by stress.

The best thing is to move. A house is an investment. You want that money to grow through increased house value as much as possible. Keeping your money invested in a home in an area that is declining is not a good investment. Not for your future or your children’s.

100% move

I don’t understand the obsession with “paying off the mortgage”.
With a mortgage, you own a £x interest in a house. You want a house in an area where house values will increase as much as possible so that the £x you have invested grows. The more it grows, the more you will have when you go to downsize. Most of the money you gain from home ownership is not through paying off the mortgage loan but from increased house value pushing up your equity share.

You get a house in an area that meets your family’s needs. It’s important to put quality of life ahead of paying back a bank.

When children are grown and gone, you can then sell what is usually a larger, more valuable house to free up your £x invested plus equity gained and buy a smaller place outright with no mortgage. You don’t need to pay off a mortgage before selling to do this.

@PlanDeRaccordement it’s London. We can get a 15 minute train to central London. Really good transport links. I don’t think house values are going to decline here. If anything, they will align with other nearby parts of London that are between 30-50% higher than here. That’s why financially it’s a consideration not to move, the new area will go up in value too over time of course, but unlikely to see the same rise as a London town that definitely hasn’t reached it’s ceiling limit yet.