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Mortgage free or nicer, larger house and rent a room out?

59 replies

needanewplannow · 26/02/2022 16:12

I've inherited some money and will be spending it on a family home, together with the equity from our current house. My choice is:

  • live mortgage free. Looking at what's available, it looks like we could get a 3 bed with compromises e.g. small bedrooms / small garden / "needs modernisation".
  • borrow about £60-80k and get a really lovely 4 bed house, with more space, nice decor and lovely garden. I'm not keen to take on debt as I don't earn a lot by MN standards (£28k), so my plan is to rent the 4th bedroom to mature students. (We did this before for several years and I loved having lodgers, I know lots of people here hate the idea but that's not a problem for us).

Mortgage free is tempting - but on the other hand we'll have a much nicer home for the kids if I borrow some money, and it'll be an investment. Also more flexible in future e.g. if my mum needs to come live with us some day.

DC are 9 and 13. DM is approaching 80, very comfortable where she is and has absolutely zero intention of ever living with us. But you never know, right?

WWYD?

OP posts:
ByHook0rByCrook · 26/02/2022 16:17

I was going to say no, but actually, you have compelling reasons to upside, and in the grand scheme of things it is a huge mortgage for the bigger house. Can you afford running costs, etc?

ByHook0rByCrook · 26/02/2022 16:17

*upsize

needanewplannow · 26/02/2022 16:21

Is £60-80k huge? I thought most people with mortgages had a lot more debt than that? Or am I thinking about this the wrong way round?! I guess it doesn't matter what other people do, does it, it matters what I can afford.

I could rent the room for more than the mortgage, so I'm hoping it'd cover periods when it was empty and hopefully contribute towards running costs.

I don't think I'd have any problem affording it now, it's the what ifs that are the risks I guess. (What if I lost my job. What if interest rates rise. etc).

OP posts:
myyellowcar · 26/02/2022 16:25

£60-80k is absolutely not a huge mortgage. It’s really quite small and well within your current income. Borrow and get a lodger if you quite enjoy having them around. No reason why not to!

Octomore · 26/02/2022 16:26

£60k-£80k is two to three times your salary, not huge at all.

With your reasons, I'd go for the bigger house.

Figgygal · 26/02/2022 16:27

Id not choose to have randoms living in my home and around my children for the sake of such a small mortgage cant you just absorb the cost?

something2say · 26/02/2022 16:28

I think bigger. For me, mortgage free any day, but the way you have written? Buy the bigger house.

GrumpyPanda · 26/02/2022 16:29

If you're fine with lodgers, then absolutely go for it.

FantasticFebruary · 26/02/2022 16:32

It's not a big mortgage, not 'in general' nor against your earnings.

If you're happy to get a lodger that'll help pay it back more quickly (make sure over payments are permitted on the mortgage BDFORE you choose one) .

Having a small mortgage (and it is) is no bad thing.

Do it, enjoy it & have fun 'making it yours'

Barleysugar85 · 26/02/2022 16:37

We had a lodger up until last year. I wouldn't again personally. It's really hard to relax in your own space, you constantly feel like you have to apologise for any mess anywhere in the communal spaces, it gets awkward when you both want a bath or a meal at the same time, it's like having a visitor that never leaves. And there is always some little niggles that would drive you crazy (not rinsing out the bath after use/ never takes a turn cleaning the loo, whatever it may be!). The day we decided to just be poorer and make do without the income was like a big sigh of relief.

Cosmos123 · 26/02/2022 16:41

@Barleysugar85

We had a lodger up until last year. I wouldn't again personally. It's really hard to relax in your own space, you constantly feel like you have to apologise for any mess anywhere in the communal spaces, it gets awkward when you both want a bath or a meal at the same time, it's like having a visitor that never leaves. And there is always some little niggles that would drive you crazy (not rinsing out the bath after use/ never takes a turn cleaning the loo, whatever it may be!). The day we decided to just be poorer and make do without the income was like a big sigh of relief.
But the OP has had lodgers before and has enjoyed it.
needanewplannow · 26/02/2022 16:41

Thanks everyone, I'm feeling more confident it's not a crazy idea! I do tend to overthink the "what ifs" sometimes.

This made me smile. Do it, enjoy it & have fun 'making it yours'. I think we really would have fun making it ours :)

OP posts:
Goldfishmountainclimber · 26/02/2022 16:56

How old are you and how secure is your job (or ability to get another job)? Do you have a partner and what is their employment situation. I think taking on debt is about assessing your personal risks. If you have security of income then why not go for the bigger property with the help of a lodger.

needanewplannow · 26/02/2022 16:56

@Barleysugar85

We had a lodger up until last year. I wouldn't again personally. It's really hard to relax in your own space, you constantly feel like you have to apologise for any mess anywhere in the communal spaces, it gets awkward when you both want a bath or a meal at the same time, it's like having a visitor that never leaves. And there is always some little niggles that would drive you crazy (not rinsing out the bath after use/ never takes a turn cleaning the loo, whatever it may be!). The day we decided to just be poorer and make do without the income was like a big sigh of relief.
We used to rent two rooms to mature students and I loved having them around. I love the idea of a visitor who never leaves! And I'm very laid back, it's very rare I get annoyed with people, life's too short IMO. My eldest was 4 when we moved and stopped being able to do this, and everyone who lived with us was great with him, he got a lot out of it

We had lots of different lodgers over the years as they came and went with their courses. The only one we had an issue with was the time we let ourselves be convinced to rent to someone who wasn't a mature student. He was a dick and I had to ask him to leave. We only did rolling month contracts - lodgers have very few rights - so we didn't have to live with him long.

These days, I'd only rent to women. Renting to mature students works really well, I've found, as they're there for a purpose, and I like that they come for a while (usually around 10 months) and go when their course ends. It means if there's anyone who doesn't fit into the household well, we don't have to live together for too long!

The key, also, is to be really clear about how what the house is like and the kind of person you're looking for. We can be a bit messy and noisy and we need someone who's fine with that.

We share our whole house with the lodgers (minus the bedrooms of course!) - they're not expected to hide away in their rooms, and we prefer people who are social and want to come hang out with us sometimes. We always invited our lodgers to eat with us, (and mostly they chose to, up to them) so there was rarely an issue with wanting the kitchen at the same time.

We met some really interesting and lovely people this way and a couple of them have become some of my best friends, we're still in each other's lives a decade or more after they moved out.

Renting to lodgers isn't for everyone, if you don't like visitors to stay for long, as you say a permanent visitor would be many people's idea of hell. But it works for us.

OP posts:
needanewplannow · 26/02/2022 17:02

@Goldfishmountainclimber

How old are you and how secure is your job (or ability to get another job)? Do you have a partner and what is their employment situation. I think taking on debt is about assessing your personal risks. If you have security of income then why not go for the bigger property with the help of a lodger.
I work for a small company. I have no idea how secure it is, long term. It seems to be healthy, I guess, but who knows. I'm late 40s. If I became unwell, we'd be screwed. I suppose I'd better take out insurance for that and factor it in? Unless it's extortionate.

I'm not factoring DP into this at all as we've not been getting on well, and I suspect the way the wind is blowing, we will likely split up soon. We're not married and it's my name on this house, not his. He earns a low wage. He leaves all the big life decisions to me, pretty much, hence I'm discussing this with you lot, not him!

OP posts:
ByHook0rByCrook · 26/02/2022 17:17

Typo by me!

needanewplannow · 26/02/2022 17:19

@ByHook0rByCrook

Typo by me!
Gah! I'm confused! Grin

Do you mean, you meant to say it's a small mortgage?

OP posts:
ByHook0rByCrook · 26/02/2022 17:21

Sorry, yes, I am typing while distracted. I meant to say it is not a huge mortgage.

needanewplannow · 26/02/2022 17:25

Ah, I see! Thanks :)

OP posts:
chillied · 26/02/2022 18:19

I'd probably get the small mortgage but personally not be so keen on the lodger. I'd think, it's around a decade where the kids will still be home as kids, therefore maximise the quality of that time. Once they leave you could look at remortgage options/lodgers/downsizing.

The only thing that would steer me to the smaller house would be wanting to put some of the inheritance to kids college funds or my pension instead.

Starseeking · 26/02/2022 18:34

If you're fine with having a lodger (and it sounds like you genuinely are), I'd go for the larger house and small mortgage. When the mortgage is paid off, you will enjoy having the extra space. Future you will thank todays you for this decision.

flashbac · 26/02/2022 18:38

If there wasn't a cost of living crisis I would say bigger house. Right now, with costs rising as they are and with you possibly being the sole earner in the household soon, take the debt free option.

Kite22 · 26/02/2022 18:58

I would definitely go for the larger house.

Like many, I'm not sure I'd want lodgers when I have a family, but you have experience and it works for you, but, importantly, that isn't an impossible mortgage even if you don't have them.

I would 100% go for the bigger property.

stuntbubbles · 26/02/2022 19:02

100% the bigger house. That mortgage is not much at all – I had the same mortgage on a smaller salary and higher interest rates than current mortgages for a boxy flat! And it was still pennies.

Imagine living in your “compromise” house forever wishing your garden wasn’t north facing or the road was quieter or the bedrooms bigger, etc, and none of those things can be changed. And if you bought a “needs modernisation” you might end up spending £60-80k on sorting it out once accounting for hidden issues, new kitchen and bathroom, redecoration throughout, plus all the dust and hassle.

That small mortgage buys you not just the bigger house, but avoiding the hassle of modernising, and no compromising.

needanewplannow · 26/02/2022 19:02

@chillied

I'd probably get the small mortgage but personally not be so keen on the lodger. I'd think, it's around a decade where the kids will still be home as kids, therefore maximise the quality of that time. Once they leave you could look at remortgage options/lodgers/downsizing.

The only thing that would steer me to the smaller house would be wanting to put some of the inheritance to kids college funds or my pension instead.

Having lodgers enhanced the DC's lives before. Obviously I'm not going to move anyone into the house who doesn't genuinely like children in general, and my DC in particular!

I have some lovely memories of my old lodgers and my DC together.

We're a sociable family! We love having people here.

OP posts: