Should we downsize to save money? Partner says we won't save?

[Pricklypoodle]

I'm thinking of downsizing but my partner says no... I could use some advice.

We bought a fairly large 4 bedroom detached house 7 years ago. We could afford it just about at the time and considered that our earnings would increase as we got older and after I picked up more working hours when the children went off to school so it wouldn't be too tight for too long.

I have since taken on more hours at work, we are now at a point where we both feel we have maximised our earning potential (both teachers). We have both now achieved the upper pay scale at work, both feel like we have more responsibilities at work than we can really manage, but we are still skint.

Our mortgage payments have increased astronomically with the current mortgage rates being how they are and with all the bills too I think we probably are as tight as we were 7 years ago despite us both earning more money.

We are not going to earn more money in our careers any time soon. So I'm now contemplating whether to downsize to release more monthly disposable income for us to have a life, go on more holidays, worry less about money.

My partner however is adamant that this is the wrong decision. He said it will cost us so much in solicitors fees/stamp duty to move that it won't be worth it and says our mortgage won't be much less than it is now.

To add, the house we live in is desperate now for new doors and windows, new kitchen as rhe current one is falling apart and the conservatory is mouldy and has a leaking roof and there's no money to sort it all out without taking on more mortgage/debt.

What should we do?

How much is the other houses you are looking at? If they’re 100k cheaper then yes month to month you’ll be better off

What is your mortgage rate at the mo and how long are you tied in for?

Have you got space for a lodger v

Also look at the wider costs of reduced fuel bills, council tax, buildings and contents insurance etc of a smaller house. We deliberately didn't stretch ourselves when we bought our house, and this decision has seen us through many lean times... mat leave, redundancy, CoL, PT working.

He said it will cost us so much in solicitors fees/stamp duty to move that it won't be worth it and says our mortgage won't be much less than it is now

Run the numbers - show him the proof in black and white.

Agree with @IbizaToTheNorfolkBroads - I am planning on downsizing and it’s not the mortgage, it’s all the associated costs. I would save at least a grand a year on council tax and insurance alone, before even including a smaller mortgage and utility bills. That’s a holiday. I don’t have kids to leave my house to (and I inherited it) so downsizing a couple of times as I age is the way to go for me.

Well he has a point. Work out how long it will take for it to make a difference after the moving costs, stamp duty etc.

Would the new house be in a different council tax band? Would energy bills be cheaper?

I seriously downsized (detached 4 bed to 2 bed small terrace) and I definitely save which has helped over the last couple of years with increased energy bills etc. However if I had gone to a 3 bed semi it probably wouldn’t have made much difference.

I’d say have your house valued and look at how much your could get for your budget in the area you want to live first.
What you find out could help you decide. House prices have dropped considerably in some areas of the country. You may not have as much equity as you think.

Hard to know without knowing your current rate, how long you are tied in for etc. would there be early repayment fees on the mortgage?

What's the remaining term and would you extend it to remain in the current property?

This is where you need facts and figures in a spreadsheet to show you what you'd save and over how long.

There's no point discussing it really - get the figures down and find out.

You need to work out moving costs and then how much you can reduce your mortgage by. Work out what the new mortgage would be based on expected sale price of your house and current mortgage balance. Going to the top of your budget is a common mistake when buying a house as you need to allow for interest rate changes. Interest rates have been kept artificially low for years now.