Equity and imminent move - chance to invest
I’m trying to get my head straight on a decision and would really value some perspective.
We’re in our early 40s, married, with two kids. Combined income is about £90k, though my wife’s is freelance so it does vary downwards.
We currently live in a house worth ~£750–775k, with about £600–625k equity. We also have ~£100k in ISAs/SIPPs (adding ~£2k/month), and ~£20k in Premium Bonds as an emergency buffer.
We’re moving in the near future due to secondary school options locally being poor enough that we basically have to do so. So I have a reset moment I wasn't expecting, and I’m torn between two directions:
Move to a similar (or better) house and take on a bigger mortgage Or deliberately step back, buy something cheaper outright (or close to it), and invest the difference.
Up to now I’ve always taken a fairly simple view: house first, investments second — i.e. make sure the family is sorted and stable, then invest. But that also assumed we weren't moving, which is no longer true.
I appreciate that leveraging could mean better house and we have room to do so, but being mortgage-free in your early 40s with kids would be a very stable baseline, at least on paper.
I’m not looking to massively compromise on the house/location side (given the reason for moving in the first place), but there’s definitely a spectrum within that.
So really just asking: what would you do in this position, and why?
Particularly interested if anyone has gone “backwards” in housing (i.e. reduced equity / gone mortgage-free) with a family — how has that played out?