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Original poster

Move or improve? What to use this money for...

25 replies

StickSwitch · 02/10/2023 05:33

I've inherited £100,000 and am not sure how best to spend it. I'd be interested to hear what others would do in my situation.

We are a family of 4 in a three-bed terrace. The house is not large at 1000 square ft, but we have everything we need here - a small garden, a garage, two bathrooms, a lovely outlook and amazing neighbours. The house is worth £275k and our mortgage is £115k.

We do not want to leave this community. More space would be nice, but due to the housing stock here we wouldn't achieve much by moving even with an extra £100k. The homes we'd be looking at start at about £425k. I'm not keen on the thought of adding £50k to our mortgage because we are fairly comfortable at the moment, and I don't want to end up stretched financially.

Back to our current house; we've never done anything to it and I do dream of a new kitchen and new bathrooms. Maybe have a proper fireplace put in. I could easily spend the £100k on this house, but it wouldn't increase the value very much at all as these houses have a ceiling price. There's no scope to extend, and the loft was already converted when we bought the house. However, if we spent the money on doing this house up then we'd stay here for another 20 years or so.

My gut wants to use the money to make this little house perfect, but I feel like I'd be wasting it because it wouldn't really do much for the value of the house and we wouldn't gain any space.

What would you do in this situation? DH is no help at all and isn't bothered either way!

OP posts:

Frenchfancy · 02/10/2023 05:42

I think I would go halfway. Use 50k to do up your house. New kitchen and bathroom.

Save the rest for now and see how you feel once you have lived with the changes.

Berninaa · 02/10/2023 06:14

I’d pay £30k off your mortgage, put £25k in the bank, £40k on the house and have a holiday with the £5k left.

Pipsquiggle · 02/10/2023 06:21

Is your house currently at the ceiling price for your area and house type?
If so probably not worth spending £50k on it from an investment perspective.
If you are going to stay there for a long time though you might as well spend it on what you want e.g. a new kitchen

user1492757084 · 02/10/2023 06:26

Can you invest in a rental property?
Could you buy something that will pay itself off if rented out?

You seem settled but maybe in ten years you might want a complete change and you'll have two properties which gives you more choice if you sell them both.

Diymesss · 02/10/2023 06:29

If you could be spending decades there I’d spend the money on getting it how you want it. I don’t think worrying about whether you are adding extra value or not is the best way to live life. Another way of looking at it could be that if the bathroom and kitchen are really run down and never replaced your house might slightly lose value/not gain as much as it might otherwise do.

Diymesss · 02/10/2023 06:30

You could spend only 40k on new kitchen and bathroom though and save the rest 😊 A nice problem to have!

Brianisanaughtyboy · 02/10/2023 06:34

Are you due to remortgage any time soon? With interest rates how they are currently I'd use the money to pay off the bulk of the mortgage, saving all that interest, but keep a small mortgage going (good for lots of reasons), saving what you would have paid in mortgage payments in a high interest account to then use for work on the house etc.

Doingmybest12 · 02/10/2023 06:49

If your house suits you perfectly, I'd upgrade the kichen and bathrooms etc. Future proof it a bit I guess. Buy some premium bonds for a rainy day. Have a holiday.

Sprig1 · 02/10/2023 06:53

Spend a decent chunk on doing work to your current house.

BMrs · 02/10/2023 06:54

I would spend part of your money on a new kitchen and bathroom and then save the rest. Perhaps get a rental property and have future income from that.

Nannyfannybanny · 02/10/2023 06:55

I would pay off as much as possible of a mortgage, especially in these turbulent times. I also wouldn't obsess about making money on the house, it's your home. It's sounds enviable, the amount you have going for it.

Meadowdog · 02/10/2023 06:58

I'd put it all towards the mortgage. Then once the mortgage is paid off save the money you would have spent on mortgage payments and use it for a new kitchen or whatever you want. But clear your debt first.

RoachFish · 02/10/2023 07:09

I would spend maybe £35K on home improvements and use £5K for a family holiday. The rest I would either put into my pension or towards the mortgage.

Beenalongwinter · 02/10/2023 07:19

I would spend less than £5k on a holiday and use the rest to pay off the bulk of my mortgage.

JanefromLondon1 · 02/10/2023 07:25

This reply has been withdrawn

This has been withdrawn due to privacy concerns.

Original poster

StickSwitch · 02/10/2023 09:11

You know, I didn't even think of paying off some of the mortgage!

I like that nobody has said they'd move. I don't really want to move. I think I feel pressured because most of our friends and family live in big houses, and for a while I've felt a bit embarrassed about our small house. Ridiculous really!

I think I'm going to use half to reduce our mortgage and half to improve the house / enjoy with a holiday etc.

Also a good point about dated kitchen and bathrooms DEvaluing the house. They're all about 25 years old so would definitely benefit from an upgrade, whether we stay here or not.

OP posts:

DrySherry · 02/10/2023 11:10

Pay it all off the mortgage if your rate is higher than the achievable savings rate. If your current mortgage rate is low then put it all into high rate savings and then use that at mortgage renewal time to pay it off. You only need to add 15k in interest and extra saving to be mortgage free giving you a new outlook on life. It really is life changing to be mortgage free. Focus on that first.

Twiglets1 · 02/10/2023 11:50

If you’re happy living there and so is your husband, I would get a lovely new kitchen and bathroom, plan a great holiday for 2024 and use the rest to pay some money off the mortgage.
In the meantime, get it in a high interest account but one where you can access the money when you want it.

GasPanic · 02/10/2023 12:06

People can be pretty fickle about kitchens and rip new ones out when they move in just because they don't like the colour.

At the end of the day if you are staying in the place it doesn't matter whether you put in a 10 grand or a 30 grand kitchen. It's you who will get the use/benefit from it and in 20 years it will be ripped out again if you sell.

Don't think about the value it adds to the house, think about the value it adds to you and your lifestyle.

Pipsquiggle · 02/10/2023 12:27

StickSwitch · 02/10/2023 09:11

You know, I didn't even think of paying off some of the mortgage!

I think I'm going to use half to reduce our mortgage and half to improve the house / enjoy with a holiday etc.

Also a good point about dated kitchen and bathrooms DEvaluing the house. They're all about 25 years old so would definitely benefit from an upgrade, whether we stay here or not.

I don't think there's any point in moving due to the stamp duty and whether you'd be able to afford the price bracket for the size of property you'd like.

£100k is a lovely amount of money but maybe not enough to upsize due to all the fees etc. You also love where you live which is great

LindaDawn · 02/10/2023 12:31

Ditto what everyone else is saying. You love your house and neighbours, that is worth so much more than having a bigger house. You could try and move but that is so so stressful and you could end up having rubbish or aloof unfriendly neighbours. If your mortgage rate is low at the moment then put some/all of money in a high interest account until you need to remortgage. Also get your kitchen and bathroom done, maybe a holiday etc. 1000sq ft is a good sized house. Sometimes that can be feel larger than a bigger house with a rubbish layout. Also people with bigger houses often have to downsize at when they are older but you won’t have to which is a huge saving. A house is for living in and you will enhance the value of your house by upgraded. People always say bathrooms and kitchens sell a house.

Calmdown14 · 02/10/2023 12:54

I'm with the other 'spend a portion of it' answers

Throwing a huge amount more than you'll see back is foolish but equally, given the huge amount you will save in mortgage interest, spending some of it seems reasonable, even without adding to the value.

When is your fixed mortgage rate up? This may be the best time to pay most of it off. You are usually limited to 10% per year as maximum overpayment. If you are still on a good rate wait until it ends.

In the meantime stick it into a couple of different high interest accounts. You'll easily get 5%. That's actually quite a lot towards a holiday/ home improvement.

Once you've paid off the mortgage you'll be able to save for a kitchen and bathroom fairly easily.

Look at DIY kitchens and get a local joiner to fit. Much better value for money that way.

Canyoucheckonme · 02/10/2023 15:52

Love this thread. We've been in a similar predicament recently, well, less money but same thoughts re moving vs new kitchen. We too love our house, location and neighbours and it's our "forever home".

We decided moving would be too expensive and stressful. Been very fortunate in that we are currently in the process of paying off our mortgage entirely. We still have a buffer in savings, but not enough for the small extension and new kitchen we'd like. So we're going to live with it for a year or so and save like mad! Will then look to do it.

I agree re paying off a chunk of your mortgage, and then treating yourself to new bathroom, kitchen and a lovely holiday. Enjoy!

sundaymorningbliss · 02/10/2023 17:03

Get financial advice.
Invest some of it.

Goldmember · 02/10/2023 17:35

We had that dilemma 4yrs ago, without the windfall though. Our house was getting smaller after 16yrs with the kids getting bigger and me newly wfh, there wasn't enough space in the small 3 bed semi. The quotes for the work needed was too much based on the house value and ceiling price. We sold up and doubled our mortgage borrowing to buy a bigger home in the same village, it was absolutely the right decision for us, we have loads of space and the location is a bit better too. It is a complete doer upper though so is still costing us a fortune in renovations.

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