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

[needanewplannow]

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?

I would go for the bigger house but wouldn't take a lodger. Take out the mortgage over a longer period.

The bigger place, for sure.

Get a nice lodger who’ll babysit. Is there a language college near you? They always need rooms for students

Bigger house without a doubt.

I would go for the bigger house but wouldn't take a lodger. Well great, that's what works for you.

Take out the mortgage over a longer period. No. I don't want debt into my late 70s or later, even. Why are you telling me to do this when it's what would suit you but I've made it very clear I like having lodgers?

MN is weird sometimes.

@Luredbyapomegranate

The bigger place, for sure.

Get a nice lodger who’ll babysit. Is there a language college near you? They always need rooms for students

Yes, we get language students here, and I've had them in the summer before, it's a good stopgap in the summer holidays.

There's also a university campus that has some courses that tend to attract mature students.

Well if you like having lodgers there isn't a problem.

@Liverbird77

A 60-80 mortgage would mean pretty small repayments, and it would keep shrinking year on year. If you are happy with a lodger then I'd go for this option without a doubt.

Would the house be big enough for them to have their own bathroom? That would make a big difference to me.

Ideally. but it's not a deal breaker for me. I really couldn't care less about sharing a bathroom, but I know some people do care about this and it'll be easier to rent if they have their own bathroom.

Last time we did this, we had two bathrooms in the house (one with bath and shower, one just with a shower) but shared them both. It worked fine.

@Viviennemary

Well if you like having lodgers there isn't a problem.

I really do! I totally understand it's not everyone's kettle of fish, but we really like having people around.

@Changechangychange

An £80000 mortgage would be about £300pcm over 25 years, so affordable on your salary even without a lodger. With a lodger, if you still paid the mortgage yourself by using their rent as a monthly overpayment, you could have paid off the £80000 in under 10 years. Definitely Option B.

That's a really positive way to look at it! It's feeling doable :)

Thank you.