HELL! To buy our forever home or stay put comfortably?

[terracottacountryfarm]

Hi everyone, I’d love some advice as we’re at a real crossroads and can’t decide what to do.

We’ve come across a 5-bed detached house up the road from where we currently live. It’s in a small cul-de-sac, has been fully renovated by a builder, and is brand new and ready to move into. While it’s not decorated to my taste, it’s a fantastic space with everything we’d need in a “forever home.”

Currently, we live in a 3-bed semi-detached townhouse. We’ve spent quite a lot doing it up and even added an extension, so it’s very much to our taste. We love our home, and it’s big enough for two children if we decide to start a family soon. The only issue is that it doesn’t have the open-plan kitchen/diner and separate study space I dream of.

Here’s the situation:

My dad has kindly gifted us £300k, which has given us two clear options:

Option A: Stay in our current house

Use the £300k to pay off our mortgage entirely and be mortgage-free.
Use the remaining £150k to renovate the house (e.g., create an open-plan kitchen/diner).
Live comfortably with no financial pressures, but possibly outgrow the house eventually and need to move in the future.

Option B: Move to the 5-bed detached house

Use the £300k towards the £675k house, leaving us with a £100k mortgage.
Take out another £100k mortgage to redecorate and furnish it to our taste, leaving us with a £200k mortgage in total.
This would likely be our “forever home” and give us the space we want, but it’s a much bigger financial commitment, especially with children potentially on the horizon.

I’m worried we might regret not making the move before having children, but we also love the idea of being mortgage-free and having financial freedom, but equally, we will be pushing our limits financially...

What would you do in our position?

Attached floor plan of new home

Why would you buy a house done up by a builder in order to spend £100k redoing it?

id go with option 3 - stay put for now until you find either a bigger house done to your taste, or a fixer upper bigger house that you’re not paying over the odds for

Of those options I'd go with the 5 bed house. If you spend 150k making a kitchen diner thing in your existing house, it will still be a 3 bed semi detached townhouse.

Wheras you can decide not to spend such a big sum on decor in your new house
.( presumably a high end kitchen, bathroom and extensive flooring as I can't wrap my head round that figure otherwise)

I'd probably actually go for option c which would be a smaller detached house with potential to extend if i did go on to have children, but invest the money and only extend if you need to. The money might then be used for ill health, ivf, schooling, allowing part time work etc.

Definitely move but take your time to redecorate when you have the cash, don't borrow for that.

Being mortgage free is a gift that will keep on giving. I think that’s an excellent option.

We chose to stay in a smaller house and pay off our mortgage. The peace of mind that brought was worth more than extra space. Looking around at friends struggling with interest rate rises and cost of living rises I don't regret the decision. But only you know if you could afford the living costs of upgrading.

The "forever" house could end up being a tie later on and you'll likely end up moving anyway to downsize as you get older and any kids move out.

Decor is temporary. Your home is decorated to your current taste but I guarantee that will change. At some point you’ll look around and want something new.

You have a golden opportunity to have a detached house with more space and a configuration you love. Grab it with both hands.

Option C - somewhere in between, look for a slightly smaller detached.
You'd be mad to trade financial security for an enormous house you'd rattle around in.
I also would not take out a £100k mortgage for cosmetic refurbishment. Do it as and when you can afford it.

Sounds like not getting the new house will give you breathing space to decide when / if you will trade up.
I would have a lot of hesitation though putting £150,000 into a 3 bed town house than you already have extended and put a lot of money into.
Your house size works for you now. If you are having thoughts of moving, I would definitely not put more money into your current house.

Two things you didn't mention but should consider - stamp duty costs and consistency of local school catchments...

Yes, schooling is important.

Option D (seeing as others have bagged option C).

Pay down the mortgage for now. It sounds as though you would like children in the future. This gives you options for maternity leave, nursery fees, part time working, a period of one of you being a SAHP. even IVF should you need it.

Then at a later date look to move to somewhere that suits your family at that point (eg schools as others say). So don’t do the extension in the meantime as that’s likely to be wasted money.

I'm in a three bed townhouse with two teens. I considered moving when they were in primary, but I'm glad I didn't. The financial freedom being mortgage free in my 40s is priceless.

I was able to take the risk of leaving a lifetime secure job and start my own business, which changed my life. We've been on so many holidays, I've helped DD with driving and uni. Looking to retire around 60. I couldn't have done any of those things if I was mortgaged to the hilt.

I'd do B but only take £100k mortgage and decorate a d buy furniture as and when savings allow. If your dad is giving you £300k be aware you may have IHT to pay if he doesn't live for 7 years after gifting. You should buy the house as tenants in common with you having a higher % to protect your dad's investment.

If it's a builder selling, would they consider part ex? It's messy though. I would say if you go mortgage free, it'll be a harder thing to do to then up root yourself and start paying a mortgage again whereas I assume you are young enough to have some future career advancement with increased wages?

I’d buy the bigger property as long as you weren’t stretching yourself too much. If £200k is a stretch it suggests you’re not on massive salaries, and this will likely reduce further for at least a few years if you have kids. What happens if the boiler breaks down or you need a new car? Can you still afford contingencies? If you only really need £100k to move and can change things over time then I’d go for it.

I second this, we are empty nesters in a 5 bed house (6 if you count the dressing room)

We both work from home so that's 3 bedrooms used all the time. We regularly have guests, and dd and her bf stay. If she has dcs that will be all bedrooms used when she's staying!

We certainly don't rattle around in it, we have a lovely huge kitchen/diner/sofas room and a tv snug, but also a boot room and a laundry which I love. Anyone who comes to stay has their own bathroom.

I would have said option 2 until you mentioned £100k for redecorating. Surely £15-20k would redecorate a fully renovated house?