My wife and I (33M / 35F) are trying to decide between paying off our current home vs upgrading to a “forever home,” and would really appreciate some outside perspective.
Financial snapshot:
- Combined income: ~$320k
- Cash: ~$100k
- Taxable investments: ~$300k
- Retirement: ~$500k
- Current home value: ~$600k
- Remaining mortgage: ~$130k (on track to pay off by Dec 2027)
We have a 1-year-old daughter and are planning for a second child in the next year or so.
Option 1: Stay put and pay off our current home
- Be completely debt-free in ~1.5 years
- Then redirect cash flow into investments / flexibility
- Move in ~5 years once we have more $ saved
Option 2: Upgrade to a “forever home” ($1M+) within the next year
- Larger down payment + significantly higher monthly costs
- But would get us into a long-term home we love sooner
What we’re wrestling with:
- Is it smarter to lock in a low-cost lifestyle and build wealth faster?
- Or stretch a bit now for a better long-term living situation while we’re still relatively young?
- Timing feels tricky with young kids, a potential second child, and current interest rates
We know the house we are in is not a forever home, and we will certainly want to find something else in the next 5 years. We’re fortunate to be in a good position, but want to be thoughtful and not make a decision we regret long-term.
Curious how others in similar situations have approached this—especially those with young families. Would you upgrade now, or wait?
Thanks in advance for any thoughts.
Mid-30s with young kids: pay off house soon or upgrade to a forever home?
byu/Own-Move-391 inpersonalfinance
Posted by Own-Move-391
14 Comments
Liquidity and extra cash not going towards a better house is king when you have young kids. Also, who knows what the state of AI job displacement may be in 5 years. The safer play is staying put. Plus kids love to destroy houses when they are little.
You can afford either path, so it’s really about timing, not money. The way I see it, the real question is whether ~$2.5k/month of lifestyle value is worth it to you. Simple.
This may not be a popular viewpoint to some on this sub. But have you considered school district choice for your kid/s? This will be a deciding factor. If you are in a good school district now, stay put. Otherwise, plan on moving to your forever home in a better school district. If you are considering private schools then this is irrelevant.
Our HHI is slightly above yours and we have a house (paid off) worth what you are talking about. If we tried to buy the same house today (even with 450k down) we would feel very cash poor, but our property taxes are also like 22k a year and we have 1 kid in private preschool and another baby in the house who will do the same in about 2 years.
It really depends on the house deal, other expenses, opportunity costs and other subjective things. Selling houses in this price range also sucks right now, at least in our area.
We are finding our “forever home” is too big and requires too much maintenance. Will dump it once teen is off at college. I think a forever home is a myth.
I would pay off your current home and save to buy the forever home the year before your child will start kindergarten. I think it’s better to adjust to 2 kids (maybe increased daycare?), decide what you really need in a forever home as the kids get a bit older and decide on schooling options later.
Just a note that in our area some elementary schools are closing due to fewer kids and we’ve had friends scramble after buying their ‘forever home’ zoned to X school that was walking distance but now closed. Guess that can happen anytime but I’d try to wait until you’re closer to school age before deciding on a forever neighborhood.
I would wait. Once the kids leave you might very well not want the forever home. If you save aggressively you will outpace home prices and might even be aboe to buy with cash in 8 yrs. The first 4 or 5 with kids smaller is easier to maintain
When kids are a little older (maybe 4-5) that’s the time to upgrade to give them a better lifestyle. For now you’ll need nanny etc and they don’t do much anyway
Banker here.. if your forever home is a decent size home on some acreage, id believe it to be a forever home.
If it’s a nice home in a subdivision, it’s really a forever for now home.
Of all the homeowners that I seen mention a forever home, almost none of them are in a subdivision.
Not saying it can never happen. Just something to consider.
Land and the ability to add whatever you want onto that land is way stickier.
We sold the ‘good enough’ house for the better house (“McMansion”)
Better neighbors. More young families. Previous place had older people who were aging in place. Very few kids. My kids are feral most weekends and roam with other kids their age at the current neighborhood.
More friends for us due to the same issues above
Love the house. It’s big. 10 year old house so minor maintenance. Previous house had Tons of issues and a potential replumb in the future. Electricity is the same as the smaller house bc it has better insulation and windows.
It’s biking distance to great schools. My son rides his bike to middle school every day.
New house has increased in value greater than the old one.
Old House had terrible storage and the layout sucked. New one is great.
You guys are on good footing financially. Don’t overthink it. If the new place will improve your day to day life, then go for it.
I can only say this: nothing compares to being debt free.
If you think about a second kid, I would lean on having more cash at hand and upgrade housing later. Those daycare costs in early years are a lot and it’s something that will stick with you until they go to kindergarten. Also unless not having a mortgage really make you much happier, why not use the extra money to make some low-risk investment or high yield savings considering you get a decent mortgage rate?
As a current dad to two younger kids aged 5 and 2, we are finally making the move now to a single family home and out of our townhouse because my wife wants her own office for WFH and we just don’t have enough rooms currently with each kid in their own space.
I would say to stay in your current place if there is enough room for everybody. Somebody else mentioned that kids are quite messy in their younger years, so it’s nice to not have to worry about sharpie on the walls of your forever home. Also, it gives you time to build up a sizeable down payment, which will really make a difference on that monthly PITI for your dream place so that you don’t feel house poor later down the line.
However, if your current place is too small and you don’t want to room your kids together because they are on totally different sleep schedules, then you might need to pull the trigger sooner rather than later. You guys seem to be on far better financial footing than me and my wife by the time we had our first kid, so you have time/financial wiggle room to make your decision.
Rent your current home and stretch a little yourself to move to your forever home