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Which option makes the most financial sense?

My wife (32F) and I (31M) own full equity in our home (worth around 600K EUR) as we recently just finished paying off our mortgage early.

We are now considering buying our next home over the next few years. We are trying to decide between buying an old house for around 1-1.2m EUR and fixing it up (most require a total renovation, possibly even a rebuild), versus buying a home between 1.4-1.5m EUR which will be ready to move into.

Some financial stats. We earn 145k EUR jointly. We have no outstanding debt and live in a country with free healthcare. We have private pension plans setup and will be sending our son to private school at a cost of around 10k EUR per year in around 2 years. A home loan here would be at a variable rate of anywhere between 3.2 - 4% interest. According to home loan calculators from banks in our area, we can borrow up to 1m EUR over a 30 year term.

1 - Buy an old home which requires renovation for around 1.2m EUR. Keep our existing home to live in while renovations are carried out. Possibly use a home equity loan to fund part of 25% deposit, however I'm not sure what the cons of doing this are. This would result in a mortgage of 900K or less depending on how we use a home equity loan here. We could then renovate slowly over a number of years (necessary due to costs)

2 - Sell our existing home for around 600K EUR. Buy a new home that's ready to move into for 1.5m EUR. 25% deposit would be 375k, so we could pay that from the cost of sale. We would then need a mortgage of 900k EUR from the bank.

Which option makes the most sense? Are there other ways to fund these options which are safer and result in less interest/risk?

submitted by /u/ExtensionLobster9225
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source https://www.reddit.com/r/RealEstate/comments/1cb15za/which_option_makes_the_most_financial_sense/
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