If your mortgage is 2k, there is no way you will rent out your house out for that? So there will always be extra top-up needed if you keep and rent. That will wipe out any savings in the future most likely.
By far the best long term financial plan for you is to remain in your current house.
If you absolutely must move home, then I suggest you consider renting out your current home to keep a stake in the property market.
-we have found a place to rent for €1300 a month where we would like to ideally live. It is a bargain.
" Of course, if they have a nice landlord who keeps the rent down at €1,300 a month for the long-term and if house prices fall and if interest rates rise, they would be far better off selling now and renting".
Are you saying from the above that if the rent stays as it seems that we should sell, simply rent and not buy again? or see what happens with the market and perhaps buy if house prices were to fall again with any monies we would have saved?
This indicates that you do not have a proper budget in place. Car maintenance costs, insurance etc. don't just crop up; you should sort out your budget.We save very little and in fact have eaten into our savings when things crop up with cars, insurance etc.
You are putting yourself under pressure to make a decision by setting a tight deadline. Your best option could be to forget moving, renting or extensions but rather overhaul your budget, get on top of your mortgage and build your savings over the next couple of years; then revisit the options re moving. Time enough moving when the eldest is going into 4th or 5th class; some banks will lend till age 70 . . of course if house prices fell back significantly and you were back in negative that might leave you stuck where you are or in a rent and rent situation.- our oldest child is starting school in Sept so ideally would like to move before then.
Fair enough Brendan, but your advice still contains an implicit assumption regarding the short term direction of residential property prices.
By the middle of next year, if house prices remain the same, you will be in positive equity through paying off the loan.
Of course, if they have a nice landlord who keeps the rent down at €1,300 a month for the long-term and if house prices fall and if interest rates rise, they would be far better off selling now and renting.
If you can rent for €1,300 a month long term and if house prices fall and if interest rates rise, then Option 2 would work out great for you.
If rent rises, house prices rise and interest rates stay the same, then Option 2 could be a disaster. You would end up renting a house worse than your current house (which sounds ok)
Option 3 allows you to keep your options open. It will be more expensive, but you keep a stake in the housing market. So you can revert to your current situation if the rent in your new place goes up.
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