Just quickly on the pension - it seems silly not to be putting in at least the 3%. He'll get tax relief, and employer matched, so for a net cost of about 1.6% of salary he gets 6% into pension.
It's worth looking into.
I take it you mean mortgage would be 300k if you trade up? You can obviously afford it. You're both young enough to get 20 year term so repayments would be 1660 at 3%. If you continue to pay 2,500 per month it'd be clear in 12 years.
There are lots of non financial factors for you to think about. Why do you want to move? Will the stress of moving be worth it?
And if you know you'll trade up at some point, will you get the benefit waiting until just before your children move out?