Mortgage free or not?

[MissBPotter]

We are currently expecting our third dc very early days) and have been thinking of relocating to a cheaper part of the country (currently in SE England). We have a nice house which needs a lot of refurbishing but we have started it and will finish in the new year (probably will take another three months or so). However, we are wondering if we should relocate (be nearer some family but not all) and become mortgage free. This is assuming we can sell our house for a good price once refurbished (I know this isn’t guaranteed at the moment). The new area is lovely but house prices are a lot lower so we could get a much bigger rural house, with land and outbuildings, which I would like, especially with the family hopefully expanding.

However, I am wondering if we should stay where we are because house prices increase a lot more down here than up there. That would mean continuing to pay our mortgage though, which is currently £1400 a month (though we overpay by £200). We would quite like to work less than we currently do - would obviously still need to work even if mortgage free though... but having more disposable income is attractive. DH works remotely and I could potentially work remotely or get a local, part time job. He could also contract so have parts of the year when he doesn’t work. I suppose I am asking whether anyone else has done something similar, or has any advice. Thanks in advance!

To be honest it would be more about where I wanted to raise my family.

@Indecisivelurcher thanks yes I agree, trying to be objective about it is possibly not that helpful. I can see advantages of both areas but would prefer to be near my family. However dh’s argument is that he’s not been near his family for years now and there are some good things about the other area - less busy/less traffic/more outdoors things to do/good schools.

Setting family to one side, my personal leaning would be towards getting off the treadmill and having more time. So if moving to the less expensive area would enable you to work less, what's not to like?! More time for family, hobbies, spending time with the children, less reliance on wrap around care. What's not to like?! But that's just one opinion!

These life decisions are always tough. We've recently received some very unexpected inheritance, enough to clear debts and either do up our house, or to facilitate a move either now or in the future, but probably not so all of it. We are talking ourselves around in circles! So you've got my sympathy! Nice positions to be in though, nice to have the choice.

I would personally prefer to have a mortgage and be near my family than not have a mortgage but not be near them. I gather from your update that you’d be moving away from yours and nearer his?

I wouldn't relocate to be mortgage free.

I would relocate, if I felt the whole move would give me and my family a much better life, long term. If part of that was reducing or even not having a mortgage, then great, but it would have to be part of what we both wanted.
It sounds like you are talking about a whole lifestyle change.
I don't know what family you have, how old you are or any dc you have are, etc.
I don't know what work you do and how - realistically - that can be done remotely (does where you are going have good broadband connection for starters?)
I don't know if you are talking about living within 1/2 a mile of family, or if you are talking about moving to just 2 hrs away rather than 5 hours away.
I don't know if you are "quite" remote now and thinking we'd like a bit of land and to go all self sufficient, and have some idea of what that is like, or if you are currently working 12 hour days in the City and this is a dream of some idyllic lifestyle.

So..... back to "Yes, being mortgage free is nice" but "Would I change my life completely just to achieve it?" then my answer would be no.

Being mortgage free gives a real sense of freedom and gets you off the work treadmill which is priceless. As long as you’re not moving to an awful area to achieve it, I would go for mortgage free 100%.

We moved 250 miles away from the SE to the SW for a bigger more rural house although we still needed a mortgage. We also wanted a slower pace of life and less traffic, better schools than where we were in the SE. DH transferred jobs within the same company and his working conditions were better. That was 30 years ago and we are now early retired. I don't think that would have happened had we stayed in the SE and I would have had to work full time rather than part time. However we moved away from family but formed strong friendship bonds down here. House prices do go up more in the SE but you get more house for your money elsewhere. Being mortgage free is a big advantage if you want to work less hours and having family around with young children can be a big bonus. It is more about where you want to live than house prices though I think.

I'm not sure house prices in the SE will continue to go up by do much more than the rest of the country going forward.

They're already far beyond affordability for all except for the very highest paid and it looks like there will be a big shift towards homeworking for at least some of the time, meaning the number of people who have to live in commuting distance of London will be lower, reducing the pressure on prices.

It could be a good time to cash in your expensive area equity, or it could be that ship has already sailed and it's no longer possible to move from a small property in the south to a large property in the north and become mortgage free at the same time.

Thanks you for all your comments. Lots to think about. I agree that there is a great deal of uncertainty about house prices in the future @BarbaraofSeville Covid and brexit are going to have a big impact.

I agree @BackforGood I haven’t really provided all the info, thought it would be long and boring! But basically yes it would be a lifestyle change, though we wouldn’t be in the middle of nowhere, just not in a fairly built up suburb like we are now. Plus we have the fact that we can’t travel to look at anywhere! And then the family issues are huge. My family go on holiday to this area so I am kind of hoping they might either stay with me a lot or even buy a holiday home there, they possibly have the money for that but not sure they would actually do it. Lots to consider.... totally agree @Indecisivelurcher it’s a great dilemma to have even though I am terrible at making decisions!!!

@MissBPotter my user name is my user name for a reason

If you go mortgage free in a cheaper area you are putting a cap on your investment in your property and level of equity. Unless you keep moving to cheaper and cheaper areas, your ability to ever move bigger / better could be compromised. Going from mortgage free to a new mortgage would be very hard.

Will you earn the same amount in the new place? Have you got the start of good pension savings?

Don’t move on the basis of hoping what someone else does... unless they are actually doing it!