My husband and I are lucky enough to have paid off our mortgage recently on a house that we like and has suited us for the last number of years but we don’t see ourselves staying in long-term.
Our combined gross salary would be in the region of 75-80k (bonuses mean it can fluctuate somewhat) and as we have no major outgoings or bills to pay we’re living very comfortably at the moment while saving €1,500pm.
We’re hoping to move in the next 12-18 months to a house that suits our needs a bit better but we’re not looking to buy anything huge – our budget would be in the region of 200k (hopefully less, but we’d be willing to stretch to 225k should be have to).
We know we’re in a very fortunate position but our query is around what to do with our existing house when we move. The way I see it, we have two options:
Having said that, it would work out at around €450pm which we could put towards the mortgage on our next house. But I’m also wondering, would it make more sense (in terms of overall cost and interest paid) to just sell the house as soon as we can and use the money to keep the mortgage on our new house to a minimum.
I know we’re in a fortunate position but we’ve also worked hard to get to where are and I’m keen to make the choice that will make the best financial sense for us. I’d be keen to hear anyone’s opinion on this. It’s hard to know who we could ask to get truly independent advice, so I figured here was a good bet!
Our combined gross salary would be in the region of 75-80k (bonuses mean it can fluctuate somewhat) and as we have no major outgoings or bills to pay we’re living very comfortably at the moment while saving €1,500pm.
We’re hoping to move in the next 12-18 months to a house that suits our needs a bit better but we’re not looking to buy anything huge – our budget would be in the region of 200k (hopefully less, but we’d be willing to stretch to 225k should be have to).
We know we’re in a very fortunate position but our query is around what to do with our existing house when we move. The way I see it, we have two options:
- We will have a deposit for a new house saved by the end of this year and the intention would be to keep adding to this savings fund until a house we love that’s within our budget comes up. We wouldn’t be part of a “chain” in buying and my thinking would be that if we decide to sell, we would do so after we have bought and moved into our new house. We reckon our house would sell for 110-120k. Hard to know at the moment especially with such conflicting news and views on house prices and where they might go. We would then use this money to pay off a huge chunk of our new mortgage, leaving us with a small mortgage of maybe 60k which we could pay off very comfortably.
- The second option is to rent the house out. We’ve no experience of being landlords but would be up for doing it if it made financial sense. The areas we’re looking at buying our next house would be at a maximum a 15 minute drive from our existing house so we wouldn’t be talking about huge distances to travel to deal with tenants or repairs or whatnot. The rental market is very good in this area and I don’t see that changing any time soon. The minimum we would get for our house would be €800pm but similar properties are now being rented out for €1,100pm. I realise that could easily change though. The plan would be to put any rental income towards our new mortgage with the intention of selling it on in maybe 10 years when property prices have maybe increased (or not).
Having said that, it would work out at around €450pm which we could put towards the mortgage on our next house. But I’m also wondering, would it make more sense (in terms of overall cost and interest paid) to just sell the house as soon as we can and use the money to keep the mortgage on our new house to a minimum.
I know we’re in a fortunate position but we’ve also worked hard to get to where are and I’m keen to make the choice that will make the best financial sense for us. I’d be keen to hear anyone’s opinion on this. It’s hard to know who we could ask to get truly independent advice, so I figured here was a good bet!