Bigger House Vs Mortgage Free

[Owlgirl14]

We had the option to either stay in our 3 bed semi with only 4.5 years left on the mortgage and would be paid off by the time we're 41/42.

However we now have a baby and needed more downstairs space so are moving. At the beginning I reluctantly wanted to move but I know it will enhance our life and we can afford it.

Just out of interest I wondered what people would have chosen given the same situation.

@Curlewwoohoo we bought just before house prices went crazy 18 months after we bought ours the exact house next door sold for double and ours was in better condition and has a large conservatory. We had an investment do really well and paid it off. We also live in North Nottinghamshire so it’s a bit cheaper. If we had bought where DH grew up even at the time the house would have been x3 as much. Our 3 bed semi is now worth 300K , his Mums terrace is worth 550k.

This is a really interesting thread.
We are in a similar position.
We're mid/late 40's with 2 DC's who will be teenager's in a few year.
Currently in a small 3 bed (mortgage fee)
We've just made the decision to move (have been thinking about it for quite some time) as we really do need more space.
We only have one bathroom so it can already be challenging in the mornings when we all need it - and that's only going to get worse as the kids get older.

We spend a lot of time at home, so although it will mean getting another mortgage (around £100k - £150k probably), we feel it will be worth it.

We've got some stuff to do to our house before we sell it though so not rushing anything. (and every month means a bit more savings, and therefore a bit less mortgage needed)

If you're comfortable where you are, I'd consider going mortgage free and going for Buy To Let in the kids' names. Without any other income, they wouldn't pay tax on the rent.

The rent and your additional payments could see the properties mortgage free by the time they leave home. The rent could then support them at university / cover tuition fees.

They'd then be in a great position starting out in life and could start a family much earlier than they could otherwise.

Can you do this? I always assumed it would need to be in parents name due to the legal responsibilities of being a landlord.

A parent could buy a property and then transfer it to their child/children. But this would not be something to do lightly as there are legal repercussions & tax implications. Should get legal advice before considering.

Being in your late 30’s you are both in the prime time window for earnings, so I’d have defintely gone for the bigger house and more mortgage. If you were both in your 60’s it’d be very different.

It could be best to use a LTD company with your children as the shareholders, but legal advice would be essential.

We increased our mortgage by 114k when we were in our early 40s. I stayed at home until the children went to school and then returned to work part time as a teacher. My salary covered the extra payment. We went from £230 a month mortgage to £1050. It was a massive increase and i'm pleased we did it. Same area but bigger bedrooms, garden, downstairs toilet, drive and utility. It was a big step up but we put the extra income to good use. Will you go back to work full time after baby. Childcare costs is a biggie now!

We are in a similar position. Could be mortgage free on our current house or move to the big family home. For us it’s more about location though and quality of life for the kids. I don’t know what to do as I love our current house and it is big enough!