Mortgage free or forever home?

Zerforax

I'm sure the most common answer would be to be mortgage free in your chosen forever home but assuming that isn't easily possible, which would you do?

Also I'm sure age will be a big factor (e.g. if you are 30 or 40 or 50 or 60) along with location (South East or London vs. North).

If you were 35-45 and had 400k but could borrow another 300k (assume joint salary of 70k, with 2.4 children), would you buy a house for 400k or would you take on a small/medium/large mortgage? There is always a bigger/nicer/better location house at a higher price point!

housebuyer143

Having just made this decision and left mortgage free life for a mortgage and much larger, better house in my mid 30s, I say mortgage and better house!

You only live once and if your current house isn't what you want to live in then being mortgage free in it isn't that great.

powerspowers

Hmmm my husband and I are in that age and income bracket but in a cheaper area house price wise. 

We’ve gone for £120k mortgage over 20yrs and hoping to have it paid off in next 8-10 years with longer term aims to retire early / career change. 

We could have stretched further but wanted to be able to afford to live off one wage if needed. House is ex-LA 4 bed semi. 

Questions to think about (don’t feel you need to answer!)

Would you be happier in the cheaper home? Does it meet your needs?
What would the longer/higher mortgage mean for you? 
How well prepared are you for kid’s uni costs? Pensions? 

What about if you have a change of circumstances? Is another child on the cards? 

No one can tell you what to do. We chose cheaper because it fits better with our long term plans and comfort levels. You could make the argument that a higher priced property is a larger investment and worth stretching for whilst you can. 

Good luck with whatever you decide!

lookstraightahead

I wouldn't take on a mortgage of 300k with a joint income if 70k and two children, forever home or not (although forever home rarely is). I would perhaps take on a 500k property with as low LTV as possible (maybe 40/60) and wait till the kids are grown up to invest further (or downsize), and put the rest of my 400k into other things, especially as the market is weird.

Gycraig

Me and partner earn 60k between us but no kids, couldn’t imagine owning a house worth 200k never mind 700k guess it depends on location, can get a nice 3 bed for 200-220k where I live. 

Also that “dream home” eventually just becomes your home and you end up looking a little bit up the ladder again, can’t beat the good old hedonic treadmill

jonnydeppiwish!

We did that 10 months ago, exactly the same scenario. We’ve spent a few £s on updating the 3 bed semi to how we want it and, at present, are very content.

We save a good sim each month, though at the moment, this is being spent on holidays and things we’ve always wanted to do.

Mortgage free every time - we also both now work part time so enjoy a 3 day weekend every week!

housebuyer143

Agree with some of the comments above - would I take on a £300k mortgage on that income... probably not. There is something to be said for stretching yourself when you are younger but thats a large amount of cover and it could prevent you enjoying the other things you wanted to do in life?

My mortgage stands at £150k (on a similar income) and that is fine with me for the next 30 years. It all depends on your priorities, but as I said before if your current house is not suitable then staying in it to be mortgage free is not a good idea.

Rosa_Damascena

I was surprised to discover at the ripe old age of 43 I was not a good candidate for a 25 year mortgage. Perhaps things would have been different if I was buying joint or looking for a shorter term.

In the end I got my forever home and paid in full. I am incredibly lucky I had the means to do so.

Northern_Dreamer

I'd take mortgage-free any day, I could find a very nice house for £400k and like you say there's always something better out there so best to try enjoy what you have!

Thrugelmir

Taking on a substantial £300k mortgage against a backdrop of rising interest rates and other inflationary cost pressures. Wouldn't be my choice at the current time. Life is too short to drag a ball and chain around. 

babyblade41

At the end of the day you still sit down to watch TV in one room , go to bed in another  & maybe cook in the kitchen 

I would always choose mortgage free