Should You Buy a Starter Home or a Larger Home to Grow Into?

by Maurie Backman | Updated July 19, 2021 - First published on April 8, 2021

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Some people like to ease into homeownership with a smaller home. Others like to go big from the start. What's the right call for you?

The first home my husband and I lived in together was a modest three-bedroom property. Since it was just us and a dog at the time, it worked, but once we decided to grow our family, we upsized to a five-bedroom home with extra bathrooms, a basement, and a lot more room on the whole.

If you're in the market for a home, you may be wondering whether you should buy a starter home, which will generally be smaller in nature, or a larger home. Here are some of the pros and cons to consider for both choices.

Benefits and drawbacks of a starter home

The upside of starter home is that:

  • You won't have to take out as large a mortgage, since starter homes tend to be more affordable.
  • You'll have an easier time getting used to property maintenance, since you won't have such a large home to maintain.

The downside of a starter home is that:

  • It will likely be on the smaller side, and you could outgrow it quickly.
  • If you have plans to expand your family, you may have to move in a few years, which is a hassle and an expense.

Benefits and drawbacks of a larger home

The upside of a larger home is that:

  • You'll have plenty of space to enjoy from the start.
  • You won't necessarily have to move if you expand your family.

The downside, however, is that:

  • You're apt to pay more for a larger home, and those higher monthly mortgage payments could be an instant strain on your budget.
  • You'll have a lot more upkeep to contend with from the moment you move in.
  • Your utility costs will be higher since it's more expensive to heat and cool a larger space.

How to decide

If you're torn between a starter home and a larger home, answering these questions might help you land on the right decision:

  • What's your home-buying budget? If you have a lot of money set aside for a down payment, you may be able to swing a larger home without taking on too large a mortgage.
  • How much patience do you have for maintenance? If you don't mind doing work around the house and spending your weekends mowing the lawn, a larger property may not be such a burden.
  • Is your family complete, or do you have plans to grow it? If you won't be adding more kids to the mix, a starter home may offer your family enough space. But if you're planning to have more children, you may outgrow your starter home fairly quickly. (To be fair, life can change, but you can use your current plans as a general guideline.)

A lot of people -- particularly first-time home buyers -- get a starter home at first, live there for a few years, and then move on to a larger property. There's nothing wrong with going that route, but there's also nothing wrong with skipping that step and buying a larger home from the get-go if you can afford it. Think about what'll work best for you and run some numbers with a mortgage calculator to see how each choice is apt to impact you financially.

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