Should I live in a flat with no mortgage or a house with a mortgage? (long)

[pileoflaundry]

This is my first post, but I've been lurking for ages. Sorry this is so long but I didn't want to drip feed.

DH and I are driving ourselves mad trying to make a house move decision. We have DD (1yr), and are TTC. We live in a flat up 2 flights of stairs. The flat has 4 decent sized rooms (3 good bedrooms plus a lounge, kitchen, bathroom), but is a poor layout with little storage, and a tiny kitchen that is too small for 3 people to eat in. The kitchen is away from other rooms, so I can't watch DD whilst cooking, and we rarely eat together because we're too shattered to clear up DD's baby led weaning mess from the lounge whereas in the kitchen we can just close the door and ignore it it's a lot more contained. We would like a bigger kitchen, more storage, a garden for DD to play in, and I can't face the stairs with a toddler and a baby (assuming that the TTC works).

We've looked at houses, schools and commutes, and have two options.

1. Stay where we are. We could use our savings to pay our mortgage, and own the flat outright (I do realise that we are very lucky to be in this position). I have been made redundant in the past, it was horrible, so this option would give financial security. I'm shortly due to return to work after maternity leave, but if something went wrong I could, with a bit of belt tightening, give up work to look after DD (and DC2 if they came along). I'd definitely be able to work part time, and we would be able to go on cheapish days out and holidays without worrying about the cost. But we'd be stuck with the tiny kitchen, stairs, and far too much clutter for the space.

1. Move to a small house nearby. We would be able to afford a small 3-bed, but bedrooms 2 and 3 would be box rooms and we would have a lot less space than in the flat. We'd have a small garden and eat-in kitchen but an even bigger clutter problem. This would require a hefty mortgage. We would both need to work, but one of us could work part time as long as interest rates stayed low. We would struggle, potentially seriously, if either of us lost our jobs.

It's a now or never; at the rate prices are going in my area (and we want to stay here for friends, schools and transport) if we don't move to a house now we'll probably never will.

What would you do? (And thank you if you've got this far!)

[Alwayscheerful]

I would stay with the flat, speak to an architect, clear out the clutter, replace furniture and technology for the most space efficient models and utilise floor to ceiling type storage. Consider paying a cabinet maker/ joiner to make bespoke fitted cupboards. Think about replacing your bathroom sink with a vanity unit and your mirrors with mirror fronted cabinets.

[LondonGirl83]

The flat without a doubt. Financial freedom is the greatest thing anyone can have and will make you a more relaxed better parent. Financial stress can destroy your health and your relationships.

I think if you can do it though, reconfiguring the flat is a great idea. Moving to a slightly larger flat that better suits your needs is aslo a great idea that hopefully wouldn't stretch you as much financially.

[struggling100]

Another vote for the flat!

I am in a similar position to you. I live in what most people would describe as a bog standard house in a lower middle class area. In a year or so's time, we'll be in a position where our savings equal the outstanding mortgage. However, here's the thing - being in this financial position is enabling me to do something creative I absolutely love professionally, rather than a standard job that I absolutely hate. I don't make much doing it, but it makes me insanely happy. I can also support my DH more if he's having a busy week, as his job is pretty full-on.

We could afford to trade up to something a bit bigger, with more space in a nicer postcode, but at the cost of insecurity and the loss of the ability to do what I really love.

I think it's more important that kids see happy, fun parents than that they live in a fancy postcode or place.