After making the decision to downsize, our ‘big’ house is now sold and moved out of and we’ve secured our new ‘downsized’ (or as I like to think of it, ‘right sized’) house. So how has it all gone and was it worth it?
For those who are numbers people, downsizing has allowed us to do the following:
- Decrease our mortgage by over half (nearly 60% in fact)
- Reduce our monthly mortgage payments by nearly 50% while decreasing our loan term by 1/3* (if we had kept our loan term the same as the previous home loan we would have decreased our monthly payments by over half too but we wanted to make the most of this move and pay our debt down as fast as we could so chose to decrease the term)
- Reduce our rates bill by $900 pa
- Reduce our power bill by over $100 a month (and that’s with me being at home full time as well with a newborn so once no one is home during the day when I go back to work it will reduce even more)
So from a black and white numbers point of view, absolutely it’s been worth it, the amount that we ‘burn’ through each month has definitely reduced.
But what about from a practical point of view, how has it actually worked for our family by downsizing from a 220 sqm home to a 140 sqm home?
I’ll admit, the timing of having to do open homes and move houses while heavily pregnant was not ideal, and while the timing was right for us in terms of the market conditions in hindsight I wouldn’t recommend attempting to sell, pack, buy and move while pregnant nor attempting renovations on the new home with a newborn.
We’ve been living in the house for a few weeks now and so far, we don’t miss the old house or extra space at all and have not really had to change the way we live at all. It just goes to show how poorly we used the space we used to have. We’re still in the process of unpacking and have already had to get rid of several pieces of furniture that didn’t fit and will no doubt have to reduce the amount of ‘stuff’ that we have but I’m quite looking forward to decluttering our lives. It’s making us really assess what things we actually need and use and what is just surplus to requirements.
There is naturally less storage in this house so we have had to compromise and accept the fact that our single garage will probably never be used for a car, but we’ve made peace with that. We’re also having fun trying to find clever storage solutions to best utilise the space that we do have.
Downsizing is not for everyone. For some, particularly first home buyers entering the Auckland property market for example, they can’t downsize any further than they have and for others it simply wouldn’t work for the age and stage of their family. We’ve been very fortunate that both the market and age and stage of our family have allowed us to embark on this downsizing journey and bring us closer to realising our dream of being mortgage free.
*this is the minimum our loan term will reduce by. If we channel our income and save we will reduce it by significantly more than this. If you want to work out how much you could reduce your loan term by check out New Zealand Home Loans’ debt free faster calculator.