Extend or save?

poppy10_2

JamesRobinson48 said:

With such young kids it sounds to me like there's probably no hurry to commit to an extension, although doubtless you'd need one in (say) five years time. Personally I would wait; assess once again nearer the time in the light of any changed circumstances; and meanwhile aim to pay down the mortgage while retaining a modest buffer of cash savings. 

Seems like bad advice to me. Waiting means the window for this family to actually make use of the larger house gets ever-smaller - before you know it the kids will be grown up and moved out, leaving the parents rattling around in a large house that they have only actually made full use of for a few yeas. Plus paying down the mortgage is incredibly bad advice when mortgage rates are at an all time low. It is the cheapest form of borrowing you will ever get. What's the point in paying it off to avoid 1.8% interest, and then end up having to pay 6% on a car loan or 8% on a personal loan if they decide to get the extension in future.

coachman12

I can see what you mean by "dichotomy" Joanna : because you have so many differing thoughts/options/economic consequences/job and pension factors/ etc going round and round in your head.
It's only my opinion but I've lived in a great many houses and had many similar decisions to make more than once over the years. My wife and always seemed to have ideas of the best course of action------sometimes we even found we were just looking for courses of action ( converting existing outbuildings, buying additional land etc) when they were not even needed----so we do understand your thought processes and why you feel torn in different directions ( BTW, we must assume whatever is decided on is genuinely agreed by both of you absolutely----naturally).
So......................You have 2 young children and no more siblings for them ; you don't seem wholly certain about job security (sorry if my intuition is wrong ), you love the house and want to stay there for at least the duration of your childrens' home being there, your pension provision is OK rather than great, your mortgage is just about right ( but no more than "average right"), your savings are good at £75k( but you mention no other savings and no investments).
Are you absolutely sure that you don't just want to redesign what you already have because it's beginning to feel "drab"  ( like you want a new kitchen/bathroom , a conservatory, a general redecoration everywhere)? 
Personally I would look ahead and see , with 3 bedrooms, your children having their own rooms for the rest of their lives at home and thus able to have their own space and somewhere to use their own pc as they study or play or socialise online. Downstairs, if your children ever appear again down there once they are teenagers  ( partly joking  ), you will have the same room space later on that you have now at this time in life as two youngsters run around the place ( which is worse during these young years------and better when they are teens ). If you ever feel "cramped " downstairs a conservatory might answer your concern.
With part of your £75k , why not spend some of it on renovating existing areas you don't like ( get a new kitchen and/or bathroom and generally make the existing house more updated and more space-effective ). That, plus a conservatory if you really feel "cramped " downstairs would use up some of your £75k but still leave you with plenty of it left-----and not "interfere" with any of your existing mortgage/savings/current monthly expenditure plans etc. 
Whatever YOU and your husband decide , I wish you all the very best as you watch your children grow up in a home where they and the house are obviously loved.