Sell or Stay.

[ryan-neil]

Hi.

Looking for some some advice on the current situation.

My spouse and I currently save 1k per month each and have accured 20k so far and will average 25k per year from now on excluding any pay increases.

We currently have a two bedroom apartment valued at 120k if we wished a quick sale but an outstanding mortgage at 1.25% tracker of 215k with repayments of 900 euro per month excluding TRS which is 70 euro. Rent in the local area is 850 to 900 per month for an apartment with high demand in the area.

We are now looking to upgrade due to a child on the way and are viewing 3 bed houses for between 160 to 200k area depending on area. Currently we plan to save for 5 years to save approx 150k and buy most likely for cash and retain the apartment but are unsure if this the best financially as we have the funds to find an property trade up and retain the tracker plus another 1% on the entire outstanding mortgage amount so we would end up with a house valued at an average of 180k but a mortgage of 250k at a tracker of 2.25%.

Is it finanically better to
a. Stay in the apartment for 5 years, save 150k and buy for cash then, renting the apartment then on to cover the mortgage.
b. Sell the apartment and move to a house selling the apartment.

Thanks

 

[goingforgold]

Hi here,

Only thing for certain is that nobody can predict the future. With a child on the way everything changes including your ability to save, and have you factored in childcare costs etc? Also house prices may change in the next five years making your plan more difficult (note we are not allowed to speculate on house price movements on AAM)

I would personally look at the second option of selling apartment and getting a bigger place for your growing family. It's a cleaner option and you don't have the hassle of renting the apartment etc. Whatever negative equity you will have in new house will be quite quickly eroded through your savings.