Mortgage free or great house?

[LaAlouette]

Firstly, this is 100% a first world problem I am extremely fortunate to have.

We are moving house. They area we are going to is expensive and we have two choices:

1. Buy a cheaper house and be mortgage-free. We could afford something that is a reasonable size with nice garden, but likely semi-detached on a narrow plot.
2. Spend an extra 150k to get somewhere detached, with a nice spacious plot.

Both would be in a good location. We have secure jobs and are in our late 30s. If we got the more expensive house we could afford to repay the mortgage in 15 years or so but wouldn’t have much left over and wouldn’t be able to save more than the bare minimum for retirement etc.

Thoughts? Do we go with the flawed house to be able to relax financially or actually do we want to spend the money to have a great house?

We did 3) buy a bigger but cheaper house that needs work. Lower mortgage that is fixed for 5 yrs but spend £s doing it up as we can afford to. We hope to have the work done over the next couple of years then focus on the mortgage before the fix ends.

I would struggle to choose too! But if I went for option 2, as PPs have said, I would get a longer term and save for retirement and overpay on the mortgage as much as I could. You would almost certainly be able to pay the mortgage off a lot sooner, but you'd also have the savings if anything went wrong, plus saving for retirement now should be a massive priority as compound interest means you'll get a lot more now than later.

We've just turned 40, we have been mortgage free for the last year or so and in choice A I wish we would have stretched ourselves a couple of years ago, moved and gone for choice B. (although choice B in my area is probably at least £275k+ difference now if not more)

We're in a semi detatched and our neighbours are a bit noisy and the house feels pokey especially since we have had a child since we bought. The massive upside is that potentially there is a bad recession coming which we are slightly insulated from. An £150k mortgage doesn't sound too intimidating but it depends on your finances.

I'd seriously opt for B every time though, saves the stress of moving again and you spend more of your years in the dream house. x I wish we had gone for it but we really can't afford to in our area now.

Better house, over pay the mortgage and down size in your 50's

You're only on this planet once so better house all day long if you can afford it!

Are there any other options in this.

How many bedrooms do you actually need for example? Could you buy a smaller house with long term potential to extend and sacrifice some space for location?

Or go for something in dated (not full renovation just in need of face lift/ new kitchen) that you can live with for a while?

I would prioritise the things that can never be changed like where it is, plot size etc. With no or a very small mortgage you could soon save for improvements. While right now is a bad time for extensions,it will calm down.

Do you see yourself living in your current area forever? The cost of moving is less important if you aspire to live by the tea one day but are currently tied to an inland location for work

Mortgage free. Smaller house. Cheaper bills.

The security of mortgage free in this financial climate is priceless.

Mortgage free also insured you against the unexpected.

You are young. You could follow FI/RE or save and move up if you really don't like it.

Semi detached and mortgage free it is!

Mortgage free. If you buy a bigger house you will only buy furniture to fill it up , plus it's going to cost more to run

So do most people.

150k is not a big mortgage and the detached house will be worth more in the long run, it may even appreciate more if you extend it.

Bottom line is I think if you choose the semi-detached now you will probably move again.

Great house. You get to live in your investment and enjoy it every day. You have options to extend the mortgage or sell it if and when it doesn’t suit you anymore. You are likely to benefit from price rises n the longer term (not the short) and gains in primary residences are unlikely to be taxed. Furthermore, any debt you have will be eroded in real terms for a while, assuming your pay keeps up with inflation. On the other hand, have you started a pension? I’d start that if not.

I am 40 and I see my mortgage as a kind of savings account. As long as house prices are reasonably stable I can sell and have the money back. If the price appreciates (it most likely will in the long run near London where we are) then it is probably going to be worth more than what a savings account would’ve given me in interest.

That said, at your age if you have to stretch to pay the mortgage, I would prioritize travel.

Rent for six months to a year. Watch the market - grab a bargain when it tanks and you may not need to stretch yourself so much.

I did debate doing this option myself but rent is astronomical at the moment and even though I think a crash may happen It's impossible to tell whether it will be 1 year or 3 and 3 years of astronomical rent (with a landlord who could chuck you out or refuse to maintain their property properly) might make any savings pointless and even cost more and knacker your mental health.

^^Absolutely this.

Consider it as a nest egg that will appreciate considerably in value over the years. In your retirement you may want to live in a different location anyway, and you'll probably want a smaller house. It's the ideal retirement plan.

If you were older I'd say the smaller/semi-detached house but given your age I would absolutely go for the detached. I place a great deal of value on quiet and privacy. Imagine you get landed with a rowdy, annoying neighbour - you'll be kicking yourself. I don't think you can put too high a price of having your own, private space!!

At your age would do bigger detached house .....unless it would leave u completely brassic...

Mortgage free, a bit of security at the moment will be fabulous.
The costs involved in selling and downsizing doesn't always release as much cash as you think

I love the peace and quiet you get living in a detached property.

Mortgage free then

Detached house as you value your privacy. You are only in your 30s and £150k isn't a huge amount at your age.

Why the headache? Mortgage free any day…, lifestyle inflation can be daunting despite the temporary bliss