Bigger mortgage or smaller house?

[Chickenandpenguin]

Would really appreciate advice and to hear your experiences on this.
We currently live in a typical 2 up 2 down mid-terrace that we love. Additional bonus of an extra bathroom upstairs and a fairly wide galley kitchen. Have 2 dc and another on the way. Here is our debate:
We need to somehow get an extra room or two. Should we extend into the loft, always have 2dc sharing and keep a nice manageable mortgage which we could pay off in 15 years (age 50 or so). Limited downstairs space obviously but in a fairly rural setting so lots of outdoors opportunities.
Or do we use money to move house, bigger downstairs and more bedrooms (prob not one each initially for chn but hopefully potential to extend eventually) then have a bigger mortgage which stretches us and limits opportunities more (eg holidays, school trips, non-essential house repairs etc)
I much prefer the idea of staying here but worry it won't be fair on chn, especially once older. Though maybe we could look to move once in their teens and more equity is built up in current house?
Thoughts?!

Id extend into the loft myself and give yourself some financial leeway until the kids are older

We moved - about 9 years ago. And now have a large house and a large mortgage. It's been a bit of a struggle at times admittedly, although we've always had a family holiday abroad each year (only a week and cheap hotels and paid in credit card...) but we've always got good deals on mortgages - i remortgage every two or three years. The last couple of years though our earnings have gone up and we're paying off overdraft and cc debts, and anticipate these being gone in a year or so.

Personally I'm glad we did it this way. Technically the mortgage won't be paid off till we're mid 60s but I doubt we'll be here that long anyway. We'll be able to sell before that and we'll have a lot more from the proceeds of selling this than our old cottage.

So maybe factor in the fact that you could always sell a larger place when you're 50 or so.

If you really think you both have very stable jobs then do it!

Don't forget at least 5k buyer and selling fees

We are staying in a small house, although the people here before us have divided the large master bedroom into smaller bedroom and tiny box room so our two DC do have a room each. DSS sleeps on a sofa bed when he's round. However, staying here has enabled us to have lots of spare cash. We can overpay mortgage, pay AVCs into pensions and have 2 holidays a year which we prefer.

I would stay.

How big is your garden? Can you add a conservatory or small extension there also? Plus loft conversion. Loft conversion you could add an extra bedroom with bathroom.

We are living in a one bed flat with x2 children. And it's actually fine. We have a roof terrace where they play whenever possible and where we socialise in summer with friends as have seating, bbq and toys up there. We are looking to buy somewhere but only looking at 2 bed flats with garden ( central London prices!)

Def use your garden to full potential. Even if you don't extend into it, it's can be a great extension of home in terms of space. Add a semi permenant gazebo, add outdoor sofas and tables, sandpits for playing, storage chests with garden toys ( cars/ dinosaurs/ outdoor games)

Personally I would do the loft conversion and stay until I really needed to move.

I would stay put. I'm in a similar situation in that I am in a 2 bed flat with 2 DSs. I COULD buy a bigger property, but then I would have less disposable income and more financial pressures. I like the fact that I can do more with the children without always counting the pennies.

Thanks for the replies. No garden, a medium sized yard with a thin strip running along the kitchen. The only extension potential is up due to it being a mid terrace. There is a communal green outside and a beach down the road so outside space isn't an issue but can't even put a large shed in yard as not the space.
Our jobs are stable - as stable as they can be. I just worry about us losing them for whatever reason might be thrown at us. We've been belt tightening for years and I cannot wait not to be (paying off debts, nearly done)
I do wonder if we'd regret not going for the big house in the future when we could sell and downsize to free up equity after retirement. We have pensions (teachers) so not likely to be great. Hmmm. It's a tricky one.

Stay where you are and extend into the loft or extend in some other way ;-)

I would stay put too. Maybe there is room for a bedroom and a study in the loft which would be useful when the children are older

If you like the area and can't get a slightly bigger house stay put and get a attic room. Is there anyway the attic could make two box rooms with the beds under the eaves.

Alternatively buy another two bed in your present location. Make sure the new two bed can be extended