Canadian market.

We're currently trying to sell our house. We already purchased a house that is lower than the price we're looking to sell our current house. The difference is a bit more than 200k. We were planning to take this difference and pay off our debt which is 200k from an independent lender. This lender's interest rate is slightly lower than the bank.

Now we're thinking about using that difference and buy another house instead of paying off the debt. We'll have our parents living there and help us a bit with the mortgage. Potentially we can rent out the basement too to help further with the mortgage.

Which is more sensible?