To abandon the extension?

[Extendorsave]

Just after some opinions really as DH and I can't decide what to do and are after some Mumsnet wisdom.
We bought a 1930s semi 2 years ago with the intention of doing an extension. It's a 5 bed semi (2 rooms in the loft) but it needed loads of work. It currently has a small old kitchen and separate dining room, it feels small downstairs. Our plan was to knock through, get a new kitchen and build a utility on the side. We've been quoted about 50-60k for this. We borrowed the money as part of the initial mortgage, planning to do it quicky and have it in a high interest account.
We have 3 kids aged 8, 5 and 2, and planning one more possibly.

As time goes on I feel like we would be better off keeping this money. I imagine all the lovely holidays it would cover, and possibly helping the kids through expensive phases. We are not struggling for money, we can afford a basic holiday every year, but the extra money would mean nicer holidays, maybe extra trips, the ability to not worry about money and buy things we need. Or we could even pay off some of the 380k mortgage!
We also have an additional 30k in savings if that makes a difference, which is our back up money as DH is self employed, so it will remain untouched.

My DH thinks we should do the extension and prioritise making the house nice to live in, I am having doubts as I'm not sure a side utility will make a huge amount of difference to our lives but I do see how much nicer it would be to have an open plan space for having friends over and spending more time together as a family. I don't think it would add much value we there is a ceiling to houses in our road. We might not make it all back if we sold and ideally we don't want to move for a long time.

Anyone had a similar dilemma? What did you do?

With 3 or even 4 kids the extension sounds sensible. And I do understand what you’re saying about the ceiling price of your property, but it will be much more sell-able with a large, useful space like this. You won’t lose the money.

So the extension bit is only a utility room, no extra living room or extended kitchen? Perhaps you could just knock through and create the open plan kitchen/dining, that would cost a lot less than an extension. I actually dont see you how you can achieve all that, knock though, new kitchen and an extension, for the price you are quoting anyway.

We made the back reception into a kitchen/diner and then had a big conservatory on the back leading out from it, which made it seem like a big open plan area. The old kitchen became a snug.

We did a huge extension back in the day and the property market bombed. We didn't give a toss, the added space and beautiful new house we had built was awesome.
Eighteen years later when our family had grown up and left home we sold it for a LOT of money and downsized. Never once regretted that extension. Listen to your husband he's right.

Holidays aren’t a fritter. Mine genuinely make my life better. DCs love them too.

I'd personally do the extension, or reduce mortgage by 60k.

Do the extension. Yes, holidays are lovely, but you live in your house all the time.

And your DC are so little. At the risk of stating the absolutely obvious, don't underestimate how much bigger they're going to get, and how much more you will value having more comfortable, practical living space when they are teens/young adults.

Can I ask why this is so bad financially? The interest on the savings is equal to the interest on the loan so it's not like we are losing money by not paying it back?
And I've said I'm not sure the extension will add an equal amount of value to the house.
Genuinely wondering as I don't think I'm being that ridiculous with my ideas, but happy to be corrected!

I'm starting to agree with people that maybe it's not sensible to blow it all on trips/luxuries, but equally I'd love my kids to have lots of opportunities and I wonder whether that holds a higher value than extra living space.
I suppose we could pay it back which would lower the mortgage each month but that way it would probably just get spent anyway.
I find it very hard to commit to an extension, I don't know why, just feels so much money in one go.

I worked for years in insurance so I always look for a worst case scenario.
Plus we had a double story extension built 7 years ago giving us 4 beds, 3 bathrooms, a huge kitchen diner utility.

You say you don't want to commit to the house long term but consider:
One of you gets ill and can't work...3 kids in a small house
As above, a downstairs shower room huge difference
You come to sell but there is a fall in market value, you may not have experienced it but it happens...and you can't sell
The money you have borrowed is spent on holidays...that you are paying interest on...interest rates jump to 6,7 or even 16% as they were when I first bought...You are paying interest on memories.

You have a higher debt than you need. It's never ever advisable to be in debt.

You should definitely not spend this amount of borrowed money on holidays and trivial stuff.

You spend most of your time in this house, it has to work for your family. How do you feel about being in a small kitchen on your own while the rest of the family is in a different room? Do you like cooking together with the kids? Is that possible in the current kitchen? Do you need to be able to keep an eye on the younger children while cooking? Do you have enough space for all 5 (or maybe soon to be 6) of you to have a sit down meal?

How many loads of laundry do you do per week? Do you have space/need a dryer? If you didn’t build the utility but knocked through the kitchen/diner, would the washing machine noise bother you while having a meal for example? Do you have other storage space in the house for your hoover, ironing board, tools, mop and bucket or whatever else usually goes in a utility room?

Imagine how you’d like family life to be in this house. Then make the changes that facilitate that.

This is helpful thank you, it's hard to imagine them as big teens at the moment. They are all boys too and I'm starting to see how useful a utility might be with all the filthy football kit!

Yes, but you don't borrow against your house to have them, that is plain stupid

We would love to extend out the back but we are on a hill so it would be very very expensive, and we would lose some garden (which isn't huge).
The side extension wouldnt be huge so that's probably why he said we could do it for 60k. It would basically take away our side access and turn it into a utility that you could walk through instead, if that makes sense.

In 30+ years of homeownership I’ve only had a utility room for 2 of those years. The house we now live in is our forever house and, whilst it’s bigger and better in every way, we’ve lived here 20 years and I still often wish I had a utility room.

I want to do this!

We did our kitchen/diner and utility extension and spent more than twice this, don't regret it. 60k would be soon gone on holidays, especially with 6 of you to pay for, and big expensive holidays that three out of four of your kids (I'm including the potential one!) won't remember doesn't match up to more living space in my opinion. Now that we're open plan the kids are constantly in the extension with me, I feel like we hang out so much more.

Floor plan attached!

This is a me thing, but I would rather make the place I spend 355 days of the year more comfortable than have nicer holidays. A bigger downstairs will be useful if you are planning on another child

Agreed. What a bonkers idea!

Essentially you've got a 3 bed semi with rooms in the loft. I would do the extension.

We effectively doubled our downstairs space a few years ago, and put an extra 2 bedrooms upstairs. It revolutionised how we live in this house.

I would definitely create a larger kitchen dining room, keep separate lounge (as kids get older, have mates over, etc., if the entire downstairs is open plan it can get noisy!)

You might be getting the same rate as the interest on your mortgage on your savings now (no idea how!), but this is very unlikely to always be the case, so you also need to consider the amount of interest you'll be paying over the entire term of the additional borrowing. It will be £000s, and way more than the cost of a few nice holidays! But you'll have nothing to 'show' for it

You're thinking of that money as yours, like savings. But it isn't, it is borrowed from the bank with interest.

We earn around 118k between us before tax. Mortgage is 1900 a month.

You'd be crazy to blow borrowed money on holidays! You could end up in negative equity.

God no, do it! We did an extension on a similar house which finished this time last year. It was June until April, the year DD was 1. We have 2 older kids too who were 8 & 6. The extension is literally life changing, our kitchen was tiny before and what was the dining room was mainly a playroom. Now we have somewhere to eat together, or the kids eat and I do jobs around them, the noisy machines are in the utility so can be shut away rather than in the tiny kitchen. We have empty cupboards which is such a luxury after cramming supplies for a family of 5 into one food cupboard, an under counter fridge and a fridge freezer out in a leaky garage. Honestly our family culture has changed, we’re happier and closer.

Also that quote seems reasonable so I would just get on with it! You’ll live in your house every day, and the same money would get you what, 10-20 weeks of holiday??

I say this as someone who loves holidays and priorities them, do the extension, with 3 kids you’ll start to feel very crowded as they get older if you leave the house as it is.