Which financial route is best

[roilito]

Would you rather owe £200k mortgage for a house and minimal savings or have no mortgage debt and the opportunity to build up significant savings. This is the tricky debate I am having with my DH.

Our income is around £130k we have one DC who would much prefer that we stay put.

If we downsize to a flat we would have no debt and could save cash for savings and investing.

If we stay the house may gain value and we can downsize and release funds when DC leaves home.

Our pension and job security is good. We are both 50. We both love work and no desire to cut back or retire.

cost of living has affected us but we have a good standard of life. We like having a spacious house but we also like travelling…

Personally I wouldn't move to a flat.

Generally that means expensive service charges.
Far more likelihood of noise issues
Often parking issues
Usually no garden space to call your own

Don't get me wrong. Like many, my first property was a flat. It was a great few years. But it's where you start. Having lived in a house, I think it seems a backwards step to move to a flat when you don't have money worries or mobility issues or issues maintaining a property.

Presumably if you are both still at work, then travelling is limited until you retire anyway.
In your position, I'd stay put and then reassess in 10 years.

200k mortgage and a house.

Definitely a house!

I'm in exactly the same boat! We are edging towards moving to a flat and having the opportunity to travel further afield with the kids / free up money for savings. We have 2 kids and I'm late 40s.

I wouldn’t buy a flat for all the reasons @JustGiveMeReason outlined. Also, flats are generally harder to sell than houses. Is your house a two bedroom one, then?

Flats have gone down in value in some areas of the country (adjusting for inflation) so I absolutely would not buy a flat at this stage in your life.

What do the next 20 years look like? Will you have pay rises and promotions? Inheritances? Will you be supporting your DC through university?

You and 130k but are considering downsizing to a flat because your mortgage is 200k?
I think you need to look at your general expenses, with one child you should still be able to overpay on your mortgage and build savings

Thanks all, I want to stay, DH wants to downsize and free up cash. Our house is 3 bedrooms but as I work from home having an office, room to dry laundry, is really worthwhile to me. I also think in 10 years DC will be at university / further study and we can reassess. Without wanting to get too deep, DH’s parents died in their 60s so he has a strong feeling of wanting to live fully as possible now (which means travelling as much as we can). I don’t quite feel that way as we have travelled extensively for years, DC isn’t so keen on travel and now I think it’s a good time to work hard, stay put, have more options in the future. But I’m really interested in others views so many thanks for posting.

Hi @gozI don’t disagree, and we do over pay the mortgage every month. Still there doesn’t seem to be loads left over as bills so high now.

Just stay put

Definitely stay put. You want to, your dc wants you to; your dh is outnumbered. A move to a flat would be hard, it won’t go up in value as much, you’d miss your space and you don’t even need to.

This. You're probably leaking a lot of money on things you don't value.

Plus wouldn't time be more of a limiting factor than money at your current life stage? You can hardly bugger off round the world for weeks on end can you.

I’m guessing OP and her husband’s mortgage repayment went up during the past few years or / and they’re paying off debt.

You need to look at where your money is going currently
A £200k mortgage with a joint income of £130k and one child should leave plenty left for saving and travelling
We are a family of 6 with around £100k joint and slightly smaller mortgage but we manage to save a good amount and have one big holiday a year

So he wants to move to a flat (of lesser value) and free up money to spend on travel etc?
TBH I think that’s a recipe for disaster…you will end up with a property worth less (and harder to sell) and still no significant savings.

We kept our big house, switched some of our mortgage to interest free, did a lot of travelling with our DC plus paid a lot into pensions and then cleared the mortgage with some of our pension lump sum.

I had initially assumed your dc was already at University / moving out stage.
the fact you've now said that is 10 years away makes it an even poorer decision to move into a flat.

Plus the fact you wfh, so need that space.

I can't understand your dh's thinking at all.