Advice please!

brokenHaiku

I currently own my own home (with mortgage), and I've been offered another job about 150 miles away. I'm now considering my options: as my new salary will be 25% higher, I could rent my current home, and buy somewhere new. The current place would effectively pay for itself in terms of the mortgage, while I'd be putting a lot of my salary into my new home. Or, I could sell my current place, and buy somewhere new. In terms of mortgages, if I sell the current place, my mortgage on a new home would be around £850 a month. If I rent, I'd be paying around £1300 a month.

I'm just thinking that the extra £450 I'd be spending on the mortgage if I rented my current place is effectively a gamble on my current property returning me a better rate of interest than putting the extra money into savings. Given the rumours that house prices are going to at least slacken off if not fall....I'm thinking I should probably be looking to keep the cash! What do you guys think? And thanks!!

Griptool

brokenHaiku wrote: »

I'm just thinking that the extra £450 I'd be spending on the mortgage if I rented my current place is effectively a gamble on my current property returning me a better rate of interest than putting the extra money into savings. Given the rumours that house prices are going to at least slacken off if not fall....I'm thinking I should probably be looking to keep the cash! What do you guys think? And thanks!!

You've answered the question yourself - my honest advice is to sell your current house and take the proceeds to Vegas, you're much more likely to make money that way:rotfl:

Jonbvn

It is not so clear cut as GT would have you believe.

The is no stock answer to your question. You really have to consider your overall financial position. Some questions you should ask yourself:

1. What is your situation regarding savings/investments. If you don't have any savings in an ISA, the 450pcm would be best paid into that first.

2. What is your situation regarding pensions?

3. Do you have any outstanding debts other than your mortgage?

The important thing you need to consider when trying to gain financial freedom is diversification. I.e. Do not put all your eggs in one (property) basket.

brokenHaiku

Thanks both. Basically for the past few years I've been getting my current house as I want it, which has left no money for savings. I have been paying into a pension, but I was at university until I was 26 (32 now), so stil some way to go!