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Original poster

Pay off mortgage in 16 years or double it for a bigger house?

29 replies

TheBeesKnee · 06/06/2023 20:14

This old question again sorry.

We bought a starter house 4 years ago when interest rates were low. We're fixed at 1.69% for another 1.5 years. To be honest I thought we'd move on but then interest rates did what they did.

It's a small mid terrace. Technically 3 bedrooms but the third room is 1.7x1.9m and we can fit a single bed and chest of drawers in there.

We recently had a baby and I'm starting to feel like if we have more than one child this house will be too small for us.

However, because we've been overpaying the mortgage from day dot we're in a position where it'll be paid off in 16 years' time at the current rate.

We're in London so a bigger house would cost twice as much and obviously we'd be dealing with much higher interest rates.

Just looking for some thoughts and perspectives.

OP posts:
sourcorn · 06/06/2023 20:17

Bigger house outside london

Bordey · 06/06/2023 20:18

16 years is a long time. You could buy a bigger house then also sell in say 16-18 years when perhaps children fly the nest (maybe say 20 years), then downsize and maybe have some profit. Bigger house price usually means bigger profit when selling. Or you might earn more in that time. Could you afford the increased mortgage on maternity pay, if either of you reduce work hours/and pay childcare costs?

Wanttobemorechilliheeler · 06/06/2023 20:19

Hard to say. Will there be another child, do you want to pay more, can you pay more, do you want to look after a bigger house, only you can decide really.
Personally? I'd stay put.

Original poster
TheBeesKnee · 06/06/2023 20:20

sourcorn · 06/06/2023 20:17

Bigger house outside london

We have discussed this but there are two issues:

  1. Change of job - this is a bigger issue for me than DP and as my salary is higher it's a serious consideration.
  2. We haven't really been anywhere we liked enough to move to.

Then there's the added issue of leaving friends and family.

OP posts:
Songbird54321 · 06/06/2023 20:30

We go back and forth on this ourselves. We have 2 children, one is in a small(ish) double room and the other a single (3mx2m).
At the moment, we have chosen to stay put. We're comfortable here and would much rather have some quality of life (days out, holidays etc) than max ourselves out with a bigger house.
If interest rates ever come down (we're not hopeful) and we can afford somewhere without extending our mortgage term then we'll reconsider.
I suppose you just have to think about what you would have to sacrifice if you moved and whether you'd be happy to give that up.

Original poster
TheBeesKnee · 06/06/2023 20:32

Wanttobemorechilliheeler · 06/06/2023 20:19

Hard to say. Will there be another child, do you want to pay more, can you pay more, do you want to look after a bigger house, only you can decide really.
Personally? I'd stay put.

We hope to have two children, so one more at some point hopefully.

OP posts:
aSofaNearYou · 06/06/2023 20:33

Two children would fit in a three bedroom house, though, so isn't it really about whether you think it's worth it for them to have a bigger bedroom?

namechanged221 · 06/06/2023 20:34

Stay put, have more disposable income and get the mortgage paid off.

The benefits of a bigger house do r outweigh all of that.

Thisisthedawningoftheageofaquarius · 06/06/2023 20:36

If you like the area stay put. And I think it’s too early to decide; we were in a two bed with two kids til the oldest was 10 and it was fine.

crumpet · 06/06/2023 20:38

Would you have the option to go into the loft at some point?

bussteward · 06/06/2023 20:39

Is there a middle ground option of converting a loft for less money than moving?

Sensible head says stay put: I dream of having the mortgage paid off! But on the other hand I’m in the big house and hated being in our small London house, so it’s easy to say “ooh, mortgage free” while I’m sitting here in a big room – grass is always greener.

Original poster
TheBeesKnee · 06/06/2023 20:51

aSofaNearYou · 06/06/2023 20:33

Two children would fit in a three bedroom house, though, so isn't it really about whether you think it's worth it for them to have a bigger bedroom?

Well, there is also just one reception room so from a toys when they're little and hangout space when they're older perspective it's not ideal.

OP posts:
Jellycattoys · 06/06/2023 20:58

We moved to a bigger house (didn’t exactly double the house value) by getting a bigger mortgage and so glad we did! Everyone enjoys the house a lot more.

However, this decision was made on the basis of DH and I both have very secure jobs and prospect of increased income. Our ages are in low 30s so not fussed about retiring soon just yet. And we made sure this would not get in the way of quality of life - still plenty of holidays etc.

It depends on your circumstances.

Also worth thinking about, if generally house prices go up, then proportionally a more expensive house will be even more expensive in the future if you want to upgrade. According to Zoopla our old house went up by 130k in value since we moved, but current house went up by 200k. Again, not always true and can be the opposite depending on economy situation.

coxesorangepippin · 06/06/2023 20:59

Do you WFH?

Cottipus · 06/06/2023 22:31

It’s a funny time to upsize- high interest rates but also lots of unrealistic vendors still expecting top dollar for their houses. We will probably upsize at some point. There’s 5 of us in a 4 bed house and one bed is DH’s office (permanent WFH) so not enough beds for each child to have their own, but whilst they’re so young (3 kids under 6) it doesn’t matter. It’s also an expensive time for us with 2 in childcare and that restricts our borrowing ability. So now isn’t a good time for us for lots of reasons.

There’s no reason you have to make a decision now (unless house prices are soaring where you want to buy, or your dream house comes up). Keep building up equity in your house and see where interest rates and your life circumstances are when your mortgage deal comes to an end.

Twoshoesnewshoes · 06/06/2023 22:45

I was told buy the best house you can afford and this has worked out well so far!
property is generally a really good investment, even with the ups and downs currently. If you can afford a bigger mortgage then it makes a lot of sense.

as PP said, you can downsize when your DC are older and moved on - so in 20 years time you can buy a house like you have now, no mortgage and a lot of cash .

the factor here is probably your ages. If you’re planning to work for the next twenty or thirty years then there’s presumably no need or advantage to being mortgage free?

A1b2c3d4e5f6g7 · 07/06/2023 06:48

We did it end of last year. One baby, hoping to have another. Would have been able to pay the mortgage off in under ten years. Now we have extended it to 23 years and it's 32% of our net income with the rate rises.

The extra bedrooms help, but it was actually our living space that was the real problem, it felt so cramped even with just one baby and a dog. So we couldn't have stayed there long term. It was hard to have lots of friends or family over, or even to host play dates etc. And there was nowhere for anyone to sleep.

Also in London, we lived central and have just moved out a bit so we now have a 30 minute train commute to work. Don't regret it

Sarfar45 · 07/06/2023 07:21

Do you have any potential to extend at all?
If you do I would stay put. With clever storage I'm sure you could make the bedroom nice.
We went up in the loft for an extra bedroom and added a conservatory off the kitchen. We initially used the loft room as a playroom but then when the kids were older and I felt ok about sleeping on a different floor, me and Dh had it as a bedroom.

electriclight · 07/06/2023 07:21

You've only got one child right now so stay where you are until the market settles. Some commentators are suggesting that interest rates might ease down towards the end of next year. I wouldn't be upsizing now unless I absolutely had to, in a market with falling prices and rising rates.

Lcb123 · 07/06/2023 07:22

if You have a 2nd, I’d probably look to upsize to get through the older child/teenage years, but then you can downsize once they’ve moved out-that what we plan to do

Sunnydaysareahead · 07/06/2023 07:35

Work out your finances and if you can afford to move, I'd move. We did it as our terrace was too small for 2 children. We stayed in London in the same area but not as close to the train station etc so got more for our money. So glad we moved, our youngest was in a tiny box room and now has space to have a friend for a sleepover. In our old house suddenly it went from being nice with small children to feeling we were on top of each other with bigger children.

dreamersdown · 07/06/2023 08:38

Stay put while you’re paying nursery fees, move when the kids start school.

trevthecat · 07/06/2023 08:49

Could you extend? Or do a loft conversion?

Jk987 · 07/06/2023 08:54

Bigger house, still in London but in a cheaper neighbourhood. Still a good commute so no need to change jobs but much more for your money.

It will be easier to move with one child than trying to do so with a baby and a toddler!

FrenchandSaunders · 07/06/2023 08:56

The thing with downsizing when DCs are grown up is that you won’t want to! Our DDs are early 20s, one has left home and we keep discussing moving to a smaller place as planned years ago to free up some cash.

But we’re used to the space and garden here and anything else seems a big compromise.