My wife and I are saving for a new home in NYC. The only debt we have is a student loan (about $26k left at 3%). We have $47k in the bank and our Household Income (HHI) is about $300k. We owe just under $389k on our current home, on a 30 year mortgage at 4.65%. In the next 2-3 years, we plan on purchasing a new home for our growing family. Does it make sense to make larger principal payments now to have greater equity in our home and lowering our LTV Ratio? Or is it better to have the cash in hand?

While my $$ would be tied up in the house, i feel like there is something to making a large principal payment from a short term ROI perspective. But I am not 100% sure.