I bought my house a year ago for £160,000. This was cheap because it was repossessed and the house is valued now at least £200,000.
I have £50,000 equity in the house, so obviously if I sold this house at 200,000 then I’d have £90,000 cash to buy another house. It is possible to get a 3 bed semi in excellent condition for around £110,000 – therefore an approximate £20,000 mortgage. My current house is a 4 bed detached in the country, therefore it is perfect for a family in years to come.
My option is either to do that or to mortgage my current house. It would be a £110,000 mortgage over 30 years – which would cost me £700 a month. I currently take home £1650 per month after tax and national insurance.
What should I do? Is it best to sell and save the extra money I’ll have each month – or to stay and rely on further future equity raise in the house?