AIBU to downsize for lower mortgage despite loving our current home?

[Violetandpurple]

Hi all
we currently own a beautiful home, it’s a 4 bed detached that we have converted the loft so we have 6 bedrooms and 4 toilets. (Edit- we have only lived here for almost 3 years, loft done early this year)
we have 4 biological children and we foster.
our mortgage is 206k total.
there is a house for sale down the road, similar area although where we are now is considered ‘nicer’. it has 5 bedrooms and 3 toilets but is a townhouse. 3 bedrooms are 17ft long so we could easily split one to create an extra room.
our mortgage would go down to 60k meaning much more spendable income each month.
current house value 435k approx other house 275k approx.
I would rather live in a less desirable house and not have financial stress. Partner says it’s silly to leave our dream home.

wwyd?

We moved from a detached to a townhouse. Whilst I do love our house, the one thing I wasn't prepared for, was the noise complaints from the neighbours either side. We can no longer play any music, unless it's really quiet, and sometimes even watching a film with loud scenes (say gunfire or a car chase) results in text messages coming through asking for us to turn the TV down.

I think you should get some proper figures for moving as that seems surprisingly low. I understand you’d pay it out of the equity but it’s still real money.

If you moved you’d have children sharing bedrooms until you invested more money into the house. That is fine of course, but also would be a change. How old are your kids? Unless they’re really little I’d probably look for steady employment and keep the house to save the costs of moving - as other said, will take several years to make the money back. And if the difference is £600/month, as long as you make more than that you end up in the same place right?

You might find you really struggle to sell - starter homes are going pretty quick where I am but larger homes are lingering. People aren’t usually up for a risk just now.

Are you sure of the maths? If I have understood your posts, you’re suggesting a £60k reduction in mortgage would save you two thirds of your mortgage payment - £900 > £300? That doesn’t make sense unless there are other variables you’re changing as you remortgage. Have you also factored in LTV? If the other property is half the value you likely will have a higher LTV and therefore higher interest rate.

I would be extremely surprised if a £60k reduction in mortgage, especially coupled with a massive reduction in the property value, made a material impact financially when you’ve factored in costs before you consider the stress, difficult housing market, upheaval etc.

I would stay, and be looking at other ways to increase income. There would be lots of ways to make that kind of amount from home. For example ironing. That’s in massive demand where I live and they charge a premium rate. Easy to do around your kids.

I would move

I think a dream home with financial pressure would become my not dream home

We moved for a few reasons and reducing the time left on our mortgage was one - be paid approx 8/9 years earlier

We have been able to help our son get on the housing ladder at 22 yrs old instead of him renting too

In your circumstances i wouldn’t move but I would look at alternative foster agencies, they pay more than the council often, plus if you take on higher levels of training you get paid more. My friend has 2 foster children currently, both teens, one is insulin dependent diabetic and the other has epilepsy, both count as health needs obviously and are amazing youngsters, just unfortunately their parents weren’t so amazing hence foster care. Her last foster children still comes back occasionally but technically is in young adult (18-21) housing

I wouldn’t move. Moving from a detached house would be far harder than you think. You’d be opening yourselves up to a world of noise and irritation. Stay where you are and enjoy your home. You’d also spend way more than you think on getting the new house how you like it.

Could you take in lodgers if you need a boost in income?

Do you plan on downsizing in the future once the children have moved out? Is there any way of extending the mortgage term to reduce the financial pressure? How long have you lived in your current house?

As others have mentioned, you need to factor in moving costs and renovation costs. If you’re planning to downsize in the future I’d say it’s probably not worth it as you might as well benefit from the likely rising property price from the house you’re currently in and the additional space you have now. It’s a personal choice though, I think if each months feels like a struggle and you’re unable to enjoy life then it would be worth considering. Of course you’d need your husband to be on board too.

I must say, we’ve recently moved to a slightly bigger house and the difference the additional space has made to everyday living has been wonderful, finally my youngest has room for all their toys in their own room rather than the living room and the house feels so much more relaxing to be in.

Not wanting to change the subject, but seriously, where do I get a 6 bedroom house for £425k?!?
Could you work part time and foster school age children?
Like others, I wouldn’t want to leave a detached house. But, we are really fond of quiet and get irrationally put out by totally normal levels of noise! So not the best to advise 🤣

I’d move I think. I’m in a similar mindset, we love our house but it is bigger than we need (although very cheap to run). I want to spend my money on travel and experiences, not a mortgage.

Thank you everyone I really appreciate the opinions.
The house I am looking at isn’t actually smaller, it has 5 bedrooms, 2 en-suites, downstairs ewc, family bathroom, multiple storage cupboards etc
it is however an end of terrace in a row of townhouses and we lose a garage.
yes we do get universal credit.
after all bills, food, hobbies, petrol etc we have £50 a week left between us, a pair of trainers required or a school trip and we are counting pennies.
We share money, joint account always have. We are still young, mid 30s, our mortgage is 35 years as has just risen considerably on a new rate.
we don’t have luxuries, hair cuts, nails, takeaways don’t happen often. This was a choice we made when we chose to have a large family on 1 income.
yes we could switch to an agency for fostering but it goes against everything I believe in and being with the local authority is the only option for us.

my argument is we could still have a large home, all our children have their own room, but financially each month we would have more money left over.

i do totally understand the other side of it, our home is beautiful but it’s materialistic we can make any home beautiful.

if i go to work full time we lose our benefits, have to pay childcare & working 32 hrs on minimum wage really won’t make much difference but we would definitely all be much more stressed. I have 1 child starting school in September my other children are 10,11,13 and they are only getting more expensive. My 11 year old needs me, she’s had a rough few years, received an autism diagnosis and we can see in the next few years she will likely be home schooled.

taking everything into account, the cost of livings, the expense of teen children etc I feel it would be better to have more money each month than living where we are.

in terms of area - it is considered the same area both new build estates. The one we are currently on built first and much more kerb appeal, all 4/5 bed detached houses then town houses on the canal fronts.
The other is a 4 min walk away. Very child orientated estate, lots of friends live there. It isn’t ‘worse’ it is more crammed in, more social housing but anti social behaviour etc is the same as where we are now (minimal)

lol we are West Midlands.
the houses are cheaper as the area they were built in wasn’t very nice 30 years ago so has a reputation for being not as nice.
however with lots of work, improved schools etc the area is now perfectly fine but the houses remain cheaper. Lots of people leaving the nicer areas of town to live here as so much better value for money.
if I worked part time we would lose our benefits, have to pay childcare too for 2 of our children so we wouldn’t really gain anything.

I think there’s only 2 mindsets isn’t there in this situation.
I would rather a better quality of life which we would have. We still require 5 bedrooms and it gives us that but more money for nice experiences.

Yes potentially once no children at home we would go to a 3/4bed but that’s a long way off.
mortgage term is already 35 years.
we have lived here 3 years.
have factored in fees etc. even if we sold for 25k less than what we think we will get our mortgage would still be halved.
the house I want to move to square ft is actually bigger than ours now.
it has 3 17 x 11 ft bedrooms.
we have 3 10 x 10 ft bedrooms then the rest are smaller.

We get some universal credit.
So taking that into account, after all our bills (not including food, petrol, children’s clubs) we have approx £300 a week spare.
we spend £200 on food, £50 on petrol per week and currently spend £30 on school dinners. Financially things are getting tight.

Yes we do get some.
not the amount your figures show though.

I have no claimed dla for my daughter, I’m unsure we would get it, maybe low rate.

Whilst taking in lodgers solves problems, no we don’t have a spare room, our spare room is our bedroom for foster children.
We lived in a town house when we only had 2 children, there was obviously more noise but it was ok, we couldn’t hear neighbours tvs etc.

I wish there was.
We don’t have luxuries, I get my hair cut once a year, maybe one takeaway a week, we don’t drink. Don’t go out on dates. We live for our children. They dance which is expensive. They have some money if out with friends.
We pay 5 phone contracts, Netflix & Spotify. All other bills are essential gas water council tax cars etc.
cuttinf the phone contracts isn’t an option our children walk to a bus stop and take a bus to school I have to be able to contact them/them me.
I could make them quit dance but they would be miserable they are very good at it, it’s their world and I believe doing a sport is good for them.
I can’t see anywhere else we could cut back.

lol.
totally understand however we are in a 3 storey house now so that wouldn’t change anything for us drastically.
we did live in one as our first home with 3 under 3. It was very hard hence the sale however now our children are much older and don’t have to watched like hawks it works well for us.

If it costs you 20k to move , it will take you several years to even break even - I know this 20k will come from your equity but its still money, you will be losing 20k of equity that you had built up. If in say 3 years your financial position could have improved and you're bringing in more, than moving isn't really a long term good financial decision.

Why can’t you get a steady job if your children are much older as you state? I think the house you’re considering moving to will be harder to sell and won’t gain as much equity. Inflation will erode your mortgage as time goes on. Could you lengthen the term temporarily or go interest only?

@Violetandpurple
I think if you started this thread with a differently framed question, you would have got completely different answers

'Can we afford a house if 39% of our take home income is spent on the mortgage alone? Household is 2 adults, xDC ages.... And sporadic foster DC'

Most people would say 'that's too high a %. Can you increase your income?'

Personally, if it is your 'dream house' I would look at everything to try and keep it, including working for a few years.

Out of interest, how much were you paying before the remortgage?