Should I stay and maybe struggle or move?

[DarkFate]

So I recently got divorced. I kept the marital home worth £310k with £165k left on mortgage.

i can currently afford it (two kids 11 and 9) definitely until the fixed deal ends on 1st of March 2027 but after that I’m unsure. Think it will be only a case of living with no treats. (Not looking g for sympathy just describing the situation).

A house around the corner has come up for £230k - I went for a look and I think I can make it work. I would want a new kitchen, the driveway doing and some improvements to the utility room. I would keep maybe £30k-£40k back to make improvements, but it would reduce my mortgage liability by £40k.

But then I think, is it worth the moving costs and hassle to reduce your mortgage by that?

Why not just get through the next few tight years and have an asset worth more in the end?

I don’t know what to do.

N.B I don’t pay legal fees, only disbursements

What is your current mortgage interest rate?

Hi - it’s 1.67 (I fixed for 5 years in Feb 2022)

pay £768 currently. It was 25 years from the Feb 2022 I’m 42 so didn’t want to increase the term really.

I would wait until your mortgage deal expedires as it may be expensive to unwind it, unless you can bring that along to the new house.
£40k seems a lot but given that new house comes with surprises, this could easily be eaten up by unexpected renovation costs.
And maybe in 2 years your situation is also a bit better.
How much longer you have on your mortgage? Another option when your deal is due, is try to extend the tenor to make monthly payments lower and then make overpayments when you can to speed up repayment.

I'd worry that with stamp duty, solicitors and moving costs that you might only be left with about £20k. And then is it worth it?

I would look at maximising what you can earn now - see if you can get promotion/new job with payrise/gain qualifications to get more ££, as by 2027 you'll be looking at both kids in secondary which potentially could allow more hours working.

By the time you've sold and paid for it all (solicitors, stamp duty, surveys, and also removals, plus all the hassle of renovations are you sure you'll actually be any significant amount better off, just in a less good house?

I would personally try to stay in your current house. It will be worth more money that would give you more options in the future such as perhaps downsizing to release some funds to help provide a house deposit for your kids. Have you gone through your budget to see what you might be able to cut out or reduce. Also selling annd moving is very time consuming and stressful. All the very best for you.

Also it’s not uncommon for people to try and sell and buy properties that fall through and you will be left with lots of fees to pay and still not move. Think it would not be the best think to uproot your kids at this time even if it is so close by.

Could you increase your mortgage term to finish when 70 years old. I'm sure you don't want to increase the term, but it might give you some extra funds every month, particularly when you come to remortgage in 2027. Then when the children are older and your earnings are higher, start making additional mortgage payments to bring the term down again.

I agree with other posters, that you might be better off staying where you are, if the end result is just to save £40k on your mortgage liability.

Moving is really expensive with stamp, movers, surveys etc and renovation costs are through the roof. And that's even if the house sale and chain go through without a hitch, we had 2 chains fall through, took us 2 years to move plus 4 figures of wasted costs and the stress could have cost me my job, it's not worth it if you can stay put. I would at least reassess at the end of your fixed term, try to build a cushion if you can. Xx

Sending hugs and strength, sorry you have to consider making these difficult decisions.

I'd do what I can to stay in your current house if I were you. The stress, upheaval and cost of moving is not worth it for the sake of 40K. I'd consider increasing the mortgage term to bring the monthly payment down if you are concerned with affordability with the look to overpay when times are good.

You'd be spending an awful lot of your capital for very little gain or so it appears. I'd get in touch with some mortgage brokers and look for the deals you might be able to get (look for yourself too as brokers don't always find the best deal). Definitely extend the mortgage term, up to 75 is easy (well that's what mine is atm). So if you have to sell later in life deal with that when it's coming up, it just means that your mortgage payments are more affordable now.

Do you love where you currently live?
Any bonuses expected that you could use to over pay the mortgage? Any promotions on the horizon?

If you don't love it then consider moving but don't leap for something immediately, take time to consider what you really want and need. The move needs to feel like it would substantially better your life to be worth the upheaval for you and the children.

Financially in the longer term you'll have a better asset by staying in the more expensive house, but if it'll be a stretch and make you miserable then you should consider a move.

I wouldn’t think it’s worth it. What it will cost you in solicitors fees, stamp duty, living costs and any unexpected costs won’t make it worth it

Thanks everyone - I don’t pay solicitors fees but other than that would have to pay movers and estate agents.

i am already full time and can’t/don’t want to re-train. I’m going for a small promotion next year so that should help.

Think I’ll stay put until the fixed deal ends and then see what deals I can get. I suppose I can always extend the term and then overpay when the kids are older.

Thanks again.

Sounds like you have a decision but I wanted to add that I was in a similar position in 2020 and am glad I stayed. One thing I wish I'd done when I knew my mortgage would go up was to overpay while my rate was low, so I could get used to the higher payment without the commitment. That or religiously put the money away to act as a buffer for the future.

But I think you're doing the right thing if you stay. Even if you extend your term (I did, meaning I'd pay until I'm 67), you can bring it down if your salary goes up (again I have). Nothing is set in stone but moving costs will always be money spent you won't see back.