To aim for mortgage free and stay in small home

[Anna19875]

Currently we are overpaying our mortgage and will be mortgage free in 7 years. I feel like this would be massively freeing, however I also would like a bigger house than our current 2 bedroom place.

AIBU to stay somewhere which is realistically a bit small for us to be mortgage free sooner?

If you have Netflix, I would highly recommend watching the MInimalists video. Makes you question the incessant quest for extra "stuff" and bigger houses and what things you actually need. Unless you actually need more than 2 bedrooms, why bother?

Op whether to pay off the mortgage or save in stocks and shares instead has been huge on going debate.

Because whatever your paying off the mortgage could be growing more than the debt so for instance in 7 years you could have enough to pay off the mortgage and have something left over?
Always worth weighing this up?
We do both, chip a little away each month off the mortgage but also save into isa.

Depends on why why want a bigger home. For us we were light on living space, plenty of bedrooms, but as the household that hosts all important gatherings we considered a larger house when we moved to make it a bit more comfortable (amongst other things). If the house you have suits all your day to day needs then why move?

Really personal circumstances I would like similar sized house but we desperately need an extra bathroom and more toilet space.

Sorry my point was if you invested properly you may be able to do both.

We were mortgage free at 50, won’t lie, it was nice. 2 years later we took on a £250k mortgage to get a bigger house and a garden. We love the garden, location and space.

The payments are manageable, we have a plan to pay it off before we retire, mortgages are really cheap, if something happens we can sell it and downsize.

Who can answer this for you? 🤷🏻‍♀️
It’s never unreasonable to aim for financial security, or money for “other things”.
But how can we know what, “a bit small for us” means? If your house is so small that it’s actually upsetting you on a daily basis then staying out might be the wrong decision for you.

We compromised and had a lift extension to our existing house to accommodate my growing pre-teen son plus DD, DH and I all wfh. We are now ploughing everything into paying off the mortgage. I know that investments can grow quicker but there is the risk that you will lose money (this happened to DB) and there is also talk of a “correction” in the market following the pandemic. So I guess it depends on your attitude to risk. Our mortgage interest rate is much higher than any savings rate we could get.

*loft extension

I would keep a mortgage and move somewhere bigger depending on your age - if retirement age then not, but otherwise definitely move.

Thanks all! Realistically our house is fine, the downstairs is almost perfect in fact (could do with a downstairs loo but such is life) upstairs is a bit cramped but again doable. We could convert the attic or the basement I suppose for more space should we become in need of more space. I’d guess 30k to do each!

We’re 34 & 35 FYI

And by downstairs is ‘almost perfect’ I mean space wise, could so with some DIY

Tayegate, yes investing in anything at all is always a risk.

However investing in tracker funds that track stock markets usually means they are self cleaning.
So it's not like say spending £100 on marks and Spencer stock.. That then becomes worthless and you loose your money. If you brought a fund that has a little of all fste100 companies, when marks and Spencer drops out... It replaced, you have not lost your money.

Same with us stock market, your buying into one of best markets in the world with some of the most incredible inovaters the world as ever known. Again soley buying shares in tslsa is gamble. Yes they are doing great but who knows where they will in ten years? Tesla could be old hat by then. However by buying into the US stock market you will own a little tesla but if it fails the company drops out.

Looking at charts since charts began, it's always risen. What would ever cause the US market to crash and never recover? Its survived everything.
Our isas for dc averaging around 25% and mine is around 30%.
They temporarily plunged during covid then rallied back higher.
With index funds I can only think you would loose money if you had to turn it into cash at the moment of crash??

It is so personal.
For me, I loved the day we got to live mortgage free. It really is liberating BUT that was quite a bit older than you are going to be. I don't think I'd want to live in a house that was 'fine' let a lone 'a bit cramped but manageable' when I could realistically do something about it. I wouldn't want to live without a downstairs toilet if I could realistically do something about it. You've got 40 to 45 years when you will have 'compromised', or 'settled' when you might have preferred more.

Unless I have x-posted whilst typing this, you haven't aid if you have dc.
We don't know if you have family or friends that would like to come and stay
We don't know if either of you have a hobby that would be lovely to have more space for
We don't know if either of you wfh
We don't know about the outside space
We don't know about the parking or location
We don't know how secure your jobs are
We don't know if your jobs are something you enjoy or are hoping to finish early
We don't know if your jobs are physical and might not be able to work into later years
etc
etc
etc

OP, How much would it cost to insall the downstairs loo?

Actually would you know @pigletjohn?

It's things like this that could make your house more sellable should you wish / have to sell.

i think you are wise to be mortgage free rather than go bigger.

I would get a bigger house! Thats pretty young to be mortgage free imo. We got our forever house at the same age which i love. Youve got a lot of life in your house so id get what you want now...plus i need the motivation to get up and go to work!

Having no mortgage can really free you up in terms of work/ how much you need to earn & can make part time work or early retirement more achievable.

So many people get caught up chasing a bigger house, taking on more debt & then working til their 70+ to pay for it. Crazy in my view.

I'm not a believer in a bigger house for the sake of it, depends on your needs. If you've 5 DC than yabu, if you've 0 or 1 not so much.

Think how much you could save a month. I.e. if you could save 1000 a month not paying a mortgage, give yourself 5 years and you could use the savings to move somewhere bigger.

@Higgeldypiggeldy35

Think how much you could save a month. I.e. if you could save 1000 a month not paying a mortgage, give yourself 5 years and you could use the savings to move somewhere bigger.

That only works if your savings outstrip house price rises though. Which they might - but it's all a bit crystal ball.

If you want a bigger house, then why not if it's affordable - it's a big part of your life, so worth spending money on. If you'd prefer to use the money for something else, do that. It's very much a personal / lifestyle decision only you can make 🙂

I was in the same boat in a two bed with 8 years left on mortgage. I’ve now moved and gone to 17 years with a bigger home but I’ll tell you the space is amazing and I don’t look back. I did overpay the other and will do this as and when but life’s too short and I think follow your heart.

I’d look for a bigger house if your current one is too small. You are too young to be thinking about ‘making do’. As a conservative projection, let’s say house prices go up 50% in the next twenty years. Small house at 100k increases to £150k, bigger house at 200k increases to £300k so more to downsize with. So not only do you live in the house you wanted but you have more money when you don’t want to live in it any more. Figures for illustrative purposes only. Plus interest rates aren’t going to rise to eye watering levels for a long time.

Much harder to get a mortgage a you get older as they will only lend until 67. So if you takeout a mortgage at 52- it is a 15 year one- as an example.

If you’re happy where you are, then can you just declutter for more space?
The location - is it really great for you, or would you rather be somewhere else?