Bought a Starter Home? 3 Reasons You Might Want to Keep It

Buying a starter home is a great way to get used to homeownership. Since these homes tend to be on the small side, generally speaking, a starter home lets you get your feet wet without committing to the cost and work of owning a larger property.

You may have bought your starter home thinking you'd upsize after a few years. But here's why you may want to stay in your starter home.

1. You locked in a low mortgage rate

These days, you're looking at an average mortgage rate of around 7% for a 30-year loan. But if you bought your home in 2020 or 2021, you may have signed a 30-year loan at around 3%. Or, you may have refinanced to a lower rate if you bought your home a bit prior to 2020. Either way, 4 percentage points is a huge difference in mortgage rates.

The rates that mortgage lenders were offering a few years ago may not be available again for a long time, if ever. So if you're locked into a favorable fixed loan, you may want to stick with it.

2. You're used to your monthly mortgage payments

Even if mortgage rates somehow fall so they're comparable to the rates buyers were getting a few years ago, if you upsize your home, you'll generally be looking at a larger monthly mortgage payment either way. But if you can afford your current mortgage payment, you may want to avoid shaking things up.

Let's say you're used to spending $1,250 a month on a mortgage. You're able to arrange all of your remaining expenses around that number so it's manageable. If you're looking at going from $1,250 a month to $1,850 a month, that could require quite a bit of financial juggling on your part.

This isn't to say that you won't be able to afford the higher payments. Rather, you may find them more stressful. There's something to be said for sticking with a monthly payment you know is doable because you've been managing it just fine for years.

3. You don't want to deal with more maintenance

Upsizing your home will generally mean spending more money on maintenance. But costs aside, it could also mean having to give up more of your time for upkeep.

Let's say you have a small home on one-tenth of an acre right now. If you upsize to a one-acre lot, that's 10 times as much mowing, snow removal, and seasonal cleanups.

And that's just your exterior. If you increase your home's square footage, you'll have more rooms to clean, more floors to vacuum, and more areas to dust -- to name just a few tasks.

A smaller home may require considerably less work. So if you value your free time, that's reason alone to stay in a starter home.

Upsizing from a starter home could give you more space. And there's a benefit to that for sure. But think about what you may be giving up -- a fantastic mortgage rate, a monthly payment you can easily afford, and your time. You may decide that staying put is your best move after all.