Small house mortgage free or bigger house with mortgage?

[Housemo]

Now in the position to buy a smaller house mortgage free or a bigger house with mortgage. Here's the pros and cons of both. Which would you choose?

1. Smaller house mortgage free:

Pros: No mortgage. Can potentially save a lot. Enough space to live in and feel cosy Cons: Massive declutter will be needed and probably renting storage space/garage for excess 'stuff' and furniture etc. No room for guests staying. Bathroom downstairs likely.

1. Bigger House with mortgage:

Pros: More space to live in/breathe! Won't need additional storage/garage as above. Cons: Mortgage fees each month. Less money to save.

Other things to mention. Both in same good desirable area. We will probably be moving again in 1-2 years for work reasons. We may consider renting out above property when selling in the future. Tempted to go for 1 because of no mortgage but space will be much smaller than currently rented house. Which would you choose?

I’d go small house no mortgage. We’ve gone for the small house , small mortgage, but it’s fine for the 4 of us, only 5 years left to pay on mortgage whereas friends and family’s have all stretched themselves and have 20+ years left to pay on mortgages. Yes their houses are big and lovely but I’d rather have money to spend than put it all into a house,

If you really are only going to stay in it one or two years can you stay where you are and avoid the two lots of stamp duty and moving costs in just a few years? Or move to the smaller one. If staying longer I'd be going for the bigger one.

NB we did a big build on our house recently and rented a shipping container to store our stuff in as it was cheaper than a storage depot and it was literally outside our house so it's well worth it if you have the space for it.

If the market does go down in a year or so you will be out of pocket if you sell so quickly. Why don't you rent? Then you would be in a stronger position when you come to buy at the next location? All the money spent on stamp duty, survey's, solicitors fees....

@Viviennemary

Dont buy a house with a downstairs bathroom. Very difficult to sell.

Not if it’s standard for the area. I had a downstairs bathroom, that house got into a bidding war.

Currently paying a fortune in rent so buying is better option even if house falls in value but don't think it would too much as popular area. We could also choose not to move in near future. No stamp duty before 31 March 2021 so saving money there. Downstairs bathroom not so much a problem if we sell. Very desirable area, many similar houses etc. Still torn over smaller property or larger one.... Instinct is telling me smaller one and mortgage free. Or biggest one we can find without paying a mortgage (maybe just taking out a small loan instead).

Buy the biggest house you can get, mortgage free. A loan to buy bigger sounds like a good idea and isn't secured on the property. Hmmm

Many years ago my DH took a large unsecured loan out for debt consolidation (it's been paid off for years now) he also took out some insurance on the loan to help pay it off should something happen to him or his job. It cost about £5.34 a month and decreased as the remaining balance of the loan decreased. Perhaps you could do that? He arranged it separately via a broker.

Mortgage free is the dream IMHO. Gives so much security.

As for ongoing storage costs be ruthless in downsizing and/or pay for something like a shed on site. Storage costs does equal wasted money so would try and avoid that if possible.

I would go for the smaller house. Life is so unpredictable at the moment. At least you will be mortgage-free and have savings..