Should I sell my home to upgrade with my $500K payout?

[JordosS1mplyLuck]

I need guidance. I own a property. 475K is owed. 55K is in redraw. 500K is in offset. I could pay off my house. I could save and move in 5 to 10 years. The house is small. It has 3 bedrooms, 1 lounge, 1 bath, no garage. I have 3 young kids. The real-estate agent said I could get 750k to 800k. I expect 730k to 740k. I am looking at a house. It has 5 bedrooms, 3 baths, 2 lounges, and a 2-car garage. It costs 1.1 million. If you were in my shoes, would you sit and hold, move when you can afford a new deposit, live debt free? Or would you take a risk and buy a new home? For context: I received a 500k payout for a workplace injury.

 

[timmabambino85]

I would combine all your money to buy the new $1.1 million house and take a small loan. We did that last May, and it makes life less stressful.

 

[Maria43]

This is both a financial and emotional question.
Having the house paid off feels good.

But in five years, the big house might be harder to afford.

Think about the long term.
Consider what you and your family truly need.

 

[vegwormsteelfiend]

You will owe $400,000 after selling your current house. Do it and enjoy the larger property.

 

[Ezmvp88]

Interest rates went up 25 basis points today. Consider that.

 

[Kickflikx]

We tried moving buying to somewhere that was 1.1 a year ago. Those exact houses are now 1.35, 1.4. If you want to make the jump, and you can with the cash you have, then I would do it.

 

[drainedworldsamurai]

Hey, you're in such a great spot it'll be way easier to move into that bigger place now and enjoy all the comforts with a young family, rather than trying to hold out for another 10 years. Either way, you're still going to be in a good place, but you can fast track that dream home and then just focus on crushing the remaining mortgage while coming home to the place you really want every night.

 

[slothrichz]

Act promptly. A similar situation happened in 2018 an accident left me unable to work since. We spent $325k on a small apartment. The payout finally arrived in 2020, and we used it as a deposit on a bigger house for $825k. We sold the apartment for $600k, now own the house outright, and spent $200k of the apartment sale profit on renovations. At the start of last year, the valuation was $2.1 million. We couldn't afford to buy it now, so we're glad we jumped as soon as we felt the need to go bigger.

 

[MysticMongoose]

I would honestly put the $500k toward the $1.1 million property if you can handle that loan, and keep the other as an investment if your finances allow otherwise, I'd sell it and feel secure with just a small mortgage on the bigger place.