Paying off modest mortgage early or going big?
Discussion
My wife has always been the sensible one when it comes to our mortgage and despite us both desiring to live in a fancier house in a better postcode we have resisted the temptation.
We bought our current house for £240k (3 bed Victorian-semi) in 2016 and have been aggressively over-paying and as such, we're on-track to be mortgage free in 9yrs.
However, with a household income of £150k PA we're very conservative with our borrowing and if we chose to, could max ourselves out with an almost £800k mortgage.
We currently live with walking distance of shops and restaurants so whilst a move to the suburbs would get me the double garage I desire, we don't want to give up the lifestyle we currently have.
I can easily and (mostly!) happily see us living in the current house for the next 20 years. An updated kitchen and new flooring downstairs would make it a beautiful home.
Not sure what I hope to get from posting this but curious to hear if others have had a similar dilemma.
We bought our current house for £240k (3 bed Victorian-semi) in 2016 and have been aggressively over-paying and as such, we're on-track to be mortgage free in 9yrs.
However, with a household income of £150k PA we're very conservative with our borrowing and if we chose to, could max ourselves out with an almost £800k mortgage.
We currently live with walking distance of shops and restaurants so whilst a move to the suburbs would get me the double garage I desire, we don't want to give up the lifestyle we currently have.
I can easily and (mostly!) happily see us living in the current house for the next 20 years. An updated kitchen and new flooring downstairs would make it a beautiful home.
Not sure what I hope to get from posting this but curious to hear if others have had a similar dilemma.
TheFungle said:
We currently live with walking distance of shops and restaurants so whilst a move to the suburbs would get me the double garage I desire, we don't want to give up the lifestyle we currently have.
I can easily and (mostly!) happily see us living in the current house for the next 20 years. An updated kitchen and new flooring downstairs would make it a beautiful home.
Sounds like you're happy where you are, so why change? Having a relatively small mortgage compared to your income is a strong positive, you don't have to max out "just because".I can easily and (mostly!) happily see us living in the current house for the next 20 years. An updated kitchen and new flooring downstairs would make it a beautiful home.
Carry on with overpaying. You've not over-stretched, so updating the kitchen and flooring shouldn't be a problem.
It’s all very personal and how you feel regarding risk or a big mortgage on your shoulders.
If you are happy where you live and think the house you live is your house for the next 10 years than stay put and enjoy your life.
If you know today that house is not the forever home than makes sense use the market growth to take to your dream home. Not using the market will mean your dream home will be less possible as years pass by unless your earnings beat inflation and house prices growth which is probably unlikely.
I am early 40s have a decent size mortgage but I am on what I consider my forever home as I could happily live here all my life.
Saying that my house has so much equity that I could consider another move I. The next few years if the market is favourable. Said move would probably make me live in a house/setting similar to mine but in another part of the country mortgage free.
No right answer but the house market does not wait for anyone and will probably carry on growing regardless of crisis. With inflation one can argue that will probably grow more as money is worth less and less.
If you are happy where you live and think the house you live is your house for the next 10 years than stay put and enjoy your life.
If you know today that house is not the forever home than makes sense use the market growth to take to your dream home. Not using the market will mean your dream home will be less possible as years pass by unless your earnings beat inflation and house prices growth which is probably unlikely.
I am early 40s have a decent size mortgage but I am on what I consider my forever home as I could happily live here all my life.
Saying that my house has so much equity that I could consider another move I. The next few years if the market is favourable. Said move would probably make me live in a house/setting similar to mine but in another part of the country mortgage free.
No right answer but the house market does not wait for anyone and will probably carry on growing regardless of crisis. With inflation one can argue that will probably grow more as money is worth less and less.
2 GKC said:
Could you get an £800k mortgage on £150k joint income? I’d be surprised, but screw that anyway. That would take most of the luxury out of your lifestyle in one fell swoop.
That's with chucking in equity and a bit of savings so £800k is accurate enough for this thread 
You're right, taking it up to that level would remove any breathing space whatsoever so would see us living a comparably meagre lifestyle.
How much difference is there in housing quality between approx £350k house you have now and say £550k in your area?
Were i live we went from a £230k house to approx £430k just before the pandemic.
£230k house was a modern 4 bed, smallish garden, driveway and garage, in a quiet cul-de-sac in town. walking distance to pub and shops etc.
£430k house was a farm house 4 bed, 3 lounge, large garden and courtyard with out building prime for conversion to a holiday let and 3 stables with 8 acres of land. needed modernisation in terms of decor but otherwise sound. plus 8 acres of land. same walking distance to pub and shops and quiter than the cul de sac.
that was worth the extra borrowing to us but we found that anything less than £400k in the area wasn't much better than the £230k house so we'd have stayed put otherwise.
Were i live we went from a £230k house to approx £430k just before the pandemic.
£230k house was a modern 4 bed, smallish garden, driveway and garage, in a quiet cul-de-sac in town. walking distance to pub and shops etc.
£430k house was a farm house 4 bed, 3 lounge, large garden and courtyard with out building prime for conversion to a holiday let and 3 stables with 8 acres of land. needed modernisation in terms of decor but otherwise sound. plus 8 acres of land. same walking distance to pub and shops and quiter than the cul de sac.
that was worth the extra borrowing to us but we found that anything less than £400k in the area wasn't much better than the £230k house so we'd have stayed put otherwise.
NuckyThompson said:
How much difference is there in housing quality between approx £350k house you have now and say £550k in your area?
Were i live we went from a £230k house to approx £430k just before the pandemic.
£230k house was a modern 4 bed, smallish garden, driveway and garage, in a quiet cul-de-sac in town. walking distance to pub and shops etc.
£430k house was a farm house 4 bed, 3 lounge, large garden and courtyard with out building prime for conversion to a holiday let and 3 stables with 8 acres of land. needed modernisation in terms of decor but otherwise sound. plus 8 acres of land. same walking distance to pub and shops and quiter than the cul de sac.
that was worth the extra borrowing to us but we found that anything less than £400k in the area wasn't much better than the £230k house so we'd have stayed put otherwise.
Bloody hell where do you live?? Were i live we went from a £230k house to approx £430k just before the pandemic.
£230k house was a modern 4 bed, smallish garden, driveway and garage, in a quiet cul-de-sac in town. walking distance to pub and shops etc.
£430k house was a farm house 4 bed, 3 lounge, large garden and courtyard with out building prime for conversion to a holiday let and 3 stables with 8 acres of land. needed modernisation in terms of decor but otherwise sound. plus 8 acres of land. same walking distance to pub and shops and quiter than the cul de sac.
that was worth the extra borrowing to us but we found that anything less than £400k in the area wasn't much better than the £230k house so we'd have stayed put otherwise.
430k in Kent or East Sussex gets you a shabby 3 bed
I moved last year and went from a 540k house to a 720k house - It not my forever home and I don't feel any better off. Often think why did I do this? But the silver lining the area I moved too has been a proper boom compared to the previous house.
House moved from now circa 600k, this one circa 900k (at today best values)
So a bit like you, i have moved from "not so nice" to a more desirable location, but its not changed my life and made me wow myself to sleep every night with the choice
NuckyThompson said:
How much difference is there in housing quality between approx £350k house you have now and say £550k in your area?
An essentially identical house in a desirable postcode has just gone on for £600k with at least £50k of works required. Both are similar walking time from centre of town so really other than the postcode, there would be very little to gain.
Expanding the search to suburbia would unlock the world of four-bed detached with garage in the £5-600k range but that's really not what we're looking for.
We're talking Harrogate here so expensive for the north but still comparatively cheap in comparison to down south.
We went big in 2015, went from at £220k nice 3 bed in a good part of town to a £420k 5 bed on one of the best roads in the area (I do feel we stole it for that price).
It has been hard over the years, fancy cars have gone as have fancy holiday although it's pushed me more in business.
I don't particularly recommend it even though I'm glad we did it. I love where we live now.
Post pandemic I suspect following under £100k worth of upgrades the house would be worth £700k +, so a good financial decision. However that probably teeters on the edge ahead of the cost of living crisis.
This summer we fixed the mortgage for five years and I have one business plan where I'll have it paid off by the end of that should we wish. By that point I'm 50, two dependants and living mortgage free. The children will start to move out in under 15 years, by which point I'll be ready to downsize.
Or that's the plan, life has a funny way of getting in the way of such thoughts!
It has been hard over the years, fancy cars have gone as have fancy holiday although it's pushed me more in business.
I don't particularly recommend it even though I'm glad we did it. I love where we live now.
Post pandemic I suspect following under £100k worth of upgrades the house would be worth £700k +, so a good financial decision. However that probably teeters on the edge ahead of the cost of living crisis.
This summer we fixed the mortgage for five years and I have one business plan where I'll have it paid off by the end of that should we wish. By that point I'm 50, two dependants and living mortgage free. The children will start to move out in under 15 years, by which point I'll be ready to downsize.
Or that's the plan, life has a funny way of getting in the way of such thoughts!
andy_ran said:
Bloody hell where do you live??
430k in Kent or East Sussex gets you a shabby 3 bed
I moved last year and went from a 540k house to a 720k house - It not my forever home and I don't feel any better off. Often think why did I do this? But the silver lining the area I moved too has been a proper boom compared to the previous house.
House moved from now circa 600k, this one circa 900k (at today best values)
So a bit like you, i have moved from "not so nice" to a more desirable location, but its not changed my life and made me wow myself to sleep every night with the choice
South Wales. Sold the house at the start of the year for a profit and moved next door, Kept the land though, So got a bigger farmhouse with 11 acres now.430k in Kent or East Sussex gets you a shabby 3 bed
I moved last year and went from a 540k house to a 720k house - It not my forever home and I don't feel any better off. Often think why did I do this? But the silver lining the area I moved too has been a proper boom compared to the previous house.
House moved from now circa 600k, this one circa 900k (at today best values)
So a bit like you, i have moved from "not so nice" to a more desirable location, but its not changed my life and made me wow myself to sleep every night with the choice
It’s totally down to your own circumstances - will you need more space in the future, do you like your neighbours etc. I’d consider myself as fairly risky - gliding, paragliding, light aircraft, travels to silly places, motorsports, married twice (the most dangerous of all) - but I always wanted to be mortgage free - to always know that pretty much whatever happened in the economy I’d have a roof over my head. And last month, aged 42, I paid off my mortgage. I could have borrowed more, gone bigger - but the stress free roof over my head won out.
I’m in a very similar position regards, current home, income & had similar considerations of moving up.
We’ve decided to just stay where we are, our current home is great everything we need. To throw another couple hundred k’s on another house is going to realistically get us slightly bigger rooms and a slightly better kurb appeal. Owning our current home outright while still in our 30-40’s is much more appealing. Plus all that extra monthlies to spend. Cars & holidays.
One chance at life….do whatever makes you happiest.
We’ve decided to just stay where we are, our current home is great everything we need. To throw another couple hundred k’s on another house is going to realistically get us slightly bigger rooms and a slightly better kurb appeal. Owning our current home outright while still in our 30-40’s is much more appealing. Plus all that extra monthlies to spend. Cars & holidays.
One chance at life….do whatever makes you happiest.
If you’re happy there and it’s big enough for the future, then I don’t see why you’re questioning it.
However if you’d like bigger / better / detached then of course go for it, whilst you still have the years left for a mortgage.
That doesn’t mean you have to spend the full £800k on offer from the bank though.
However if you’d like bigger / better / detached then of course go for it, whilst you still have the years left for a mortgage.
That doesn’t mean you have to spend the full £800k on offer from the bank though.
I always bought smaller and cheaper houses than I could afford.
Had I been more aggressive I would have made a lot more in equity growth.
However, I valued having low debt and sleeping well at night so no regrets.
In your case, if you don’t really want more space, garage, better location etc then it’s not really worth the hassle and expense IMO.
Had I been more aggressive I would have made a lot more in equity growth.
However, I valued having low debt and sleeping well at night so no regrets.
In your case, if you don’t really want more space, garage, better location etc then it’s not really worth the hassle and expense IMO.
What you could do is pay your mortgage off. Casually look at 800k properties and purchase chain free. Then sell your house and overpay on the new mortgage.
This is what we did. Bought a 500k house, 400k debt. Then sold the old place for £260k. On mortgage renewal next year (doh!), we'll have a £150k mortgage and a ~600k house.
Purchasing chain free gives you so much buying power and flexibility, if you can, do it.
Please note you do have to pay 3% extra stamp duty, but it is VERY easy to claim back so long as you don't have incompetent solicitors. You need the unique transaction number for the purchase. That said the land registry were helpful with this.
This is what we did. Bought a 500k house, 400k debt. Then sold the old place for £260k. On mortgage renewal next year (doh!), we'll have a £150k mortgage and a ~600k house.
Purchasing chain free gives you so much buying power and flexibility, if you can, do it.
Please note you do have to pay 3% extra stamp duty, but it is VERY easy to claim back so long as you don't have incompetent solicitors. You need the unique transaction number for the purchase. That said the land registry were helpful with this.
Edited by Rob_125 on Monday 29th August 08:29
Gassing Station | Finance | Top of Page | What's New | My Stuff