I feel foolish now that it turns out I had several fundamental errors in my previous post about Lotro housing. My only excuse is that I was reading the official lotro material on housing and perhaps stacking discounts will be introduced at a later date.
I had decided to opt for a small dwarf house - to be close to our kin hall and to avoid unnecessary expense. Now however, given that deluxe houses have a bigger discount and given that there doesn't seem to be a disadvantage to setting up home away from your kin hall I am not so sure.
I think Throg will still opt for a small house. I'm not really a home maker and I don't think I will be getting a lot of furniture and stuff. I can always look for a deluxe house later if I feel like it and the loss of 1G that I pay for a small house won't be too painful.
I am still a bit unsure about location. Although Throg is a dwarf I amn't too fond of the look of the dwarf houses. Plus I already have a free port to Thorin's hall. The general opinion seems to be that eleven houses especially deluxe models are the prettiest but it would be too out of character for a dwarf to buy an Elf house. I could imagine Throg settling down in Bree-land though. Bree is such a cosmopolitan place that all sorts live there.