Pay off mortgage or upgrade house?

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Have namechanged for privacy.

DH and I have been blessed with a windfall. We are in a position to be able to pay our mortgage off and have some money left over.

However, we are finding the current house too small for our needs and growing family and we would like to move to a bigger house.

We have looked at a number of houses, but none seem to fit our requirements unless we start increasing the budget and this would mean using the equity on this house and the windfall and a small mortgage left over.

Are we crazy to do this when we could just be mortgage free? We could invest in this house and increase the space a little, but it would not give us what we want from a house

Any advice/thoughts appreciated

A friend of mine was in a similar situation with an unexpected windfall two years ago. Their house was adequate but with not much leftover space so they made the decision to upgrade using the windfall money.

They have a lovely house now with lots more space, spare room etc. Her DH has a new job that pays more so their financial situation has improved too.

Its hard to make the decision as you never know what the future holds. Money gives you extra choices but I guess with those choices comes the burden of responsibility for the "right" decision.

We had a big house refurb last year which I have posted about a bit, I wouldn't have work done and go through all the upheaval that involves lightly, especially if you aren't going to end up with what you really want.

Ooh lucky u

Its a tough 1, i think put in your position i would pay off the mortgage and make improvements are you happy with the house other than lack of space?

How many kids do you have, dnt 4get they won be there forever

I would move to a bigger place, even if it meant a small mortgage. As long as you can repay it before you plan to retire what's the problem?

If you stay where you are and you become mortgage free you'll be amazed how quickly that extra money at the end of the month goes! So you might as well spend it on a small mortgage giving you all more space

What a lovely situation to be in though!