Just an update on our decisions regarding this.
We have decided to rather look at buying a new place to live in at the end of next year or early 2014. First we need to find a some good schools for our sons (one will be going to grade 8 in 2015, the other to grade 1 in 2014).
We will then rent out our current house. This means that we will have about 18 months to clear some of our debt & to save up for a decent sized deposit.