A question about : Disadvantages of downsizing?
Hi
Myself and my wife (both 51) have a property worth around Ј370k with a Ј109k mortgage, paying Ј900/m (overpaying a bit) and it will clear in around 12 years. Our thinking is that we will sell this house and buy a house for around Ј250k and become mortgage free or very close. Kids left the nest, don't need the current size of house etc. We would then use that Ј900 to invest in something else, most likely including tracker funds. We will also look to take out another interest only mortgage for a flat in our nearby city for student offspring, again an investment, so that should be near enough cost neutral.
We think the above all makes sense. But are we missing anything? Is there a downside to downsizing like this? I guess its what gives a better return over 12 years: spending Ј900/month on the existing property or Ј900 on other investments plus the knowledge of being mortgage free?
Any thoughts welcome!
Best answers:
- Just be careful you don't downsize too much. It's OK while still working but when you retire you will both need your own space from my experience. When we sold our last place to downsize , the garden was too alrge for us, a couple were looking around because they wanted to upsize, they had downsized too much on retirement and were getting in each others way.
- Make sure you pick a place that will meet future needs.
Changing is very expensive you only want to do it once.
maintenance is an ongoing expense so
running costs another
Also consder locations, another way to release equity is to move to a cheaper area.
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