To ask how to come to terms with this financial situation

You get better rates when you remortgage if your loan to value goes under 60%.

Eh? Where does OP say she owns a farm?

Moreover with each year the debt is diminishing in real term value.

i would not be protesting - I would be saying ‘thanks’. It’s a great deal.

Let’s say you own a farm worth £2.2 million – that’s about the average net worth of a farm in England, according to figures from Defra.
If you’re single, the Treasury states you’ll be able to pass on up to £1.5 million of this to children or grandchildren tax free. That’s the one million pound allowance for farm owners, plus the normal tax exemptions that everyone has, which are worth up to £500,000.
£2.2 million minus the £1.5 million in tax exemptions leaves £700,000 that could be taxed.
Under the new government policy, that £700,000 would be taxed at 20 per cent – rather than 40 per cent as non-farmers pay.
This leaves a theoretical tax bill of £140,000. Your child or children can pay this off in instalments over ten years, interest free. That’s more favourable than inheritance tax bills non-farmers pay, which face a 7 per cent interest rate.
So that’s an annual tax bill of £14,000 for ten years, in our hypothetical example.
Now imagine that you’re part of a married couple and are passing on a farm of the same value – £2.2m.
The Treasury states “two people who jointly own a farm will be able to pass on land and property valued up to £3 million to a child or grandchild tax free”. This is because you and your spouse could each pass on a £1.5m tax exemption. (Spouses don’t need to die at the same time for their heirs to benefit from the combined £3m exemption.)
That means, in this example of a couple passing on a £2.2m farm, your children should pay no inheritance tax at all.

If it makes you feel better OP I'm in the same boat but 10 years older and haven't even bought my post divorce house yet!
Downsizing and reducing mortgage is my plan,as many people on here have said. Having a dd who is 12 you will feel like it's miles away but honestly the teen years fly in
I am very worried about my financial future but for right now I'm grateful for a roof over my head and a job. Take it one step at a time!

I know many people who are in a couple at 40 but they have a 400k joint mortgage with huge monthly payments. At least yours is affordable. You have a three bed home. One day you will be mortgage free. You’re financially self sufficient.

You're only 40
Don't worry about the next 30 years, just be grateful you have a stable home and can meet the mortgage payments.

In the future who know what will happen. You may meet someone else who can contribute. You may inherit lots of money. You may downsize. Move to a cheaper area. DD might decide stay living at home and contribute.

Might be worth getting income protection cover if you haven't already.

You take out an equity release to pay off your existing mortgage. You don’t have to make repayments on an equity release. They have their disadvantages (eat into inheritance), but you will not need to make repayments.

These fears are all in your head. Push them away and keep doing so whenever they reappear.

Think about how much your life has changed in the last thirty years. There will be just as many changes in the next.

If, when you retire, you haven’t paid off your mortgage, you can downsize then. Your daughter will no longer need to live near the school…

Every year that you manage to provide a stable home and school life for your daughter is a year of achievement. Congratulate yourself for what you’ve achieved and for every additional year you get under your belt in the future. Her childhood will pass more quickly than you expect and suddenly you’ll look back and realise that you’ve made it - most or all of her childhood was spent in a stable home environment, provided by you.

Yes, something might go wrong, but that’s true for everybody. All we can control is what’s happening at the moment.

If something did go wrong, I’m sure you’d still manage to be a source of stability and love for your daughter.

A stable home and school life is all that matters. Everything else is just glitter and garnish.

From my observations many young adults are not learning to drive until their 20s, for all sorts of reasons. Of all the things to be worrying about, not paying for DC's driving lessons sometime in the future is really rather ridiculous. DC can pay for their own when they are earning enough, both for the lessons, and costs of buying and insuring a car. Why can't you ask your well off parents for help?

How old is your daughter? Sounds like it's at least 10 years before she is even legally allowed to have a provisional licence. You don't know what is going to happen tomorrow, never mind decades into the future.
Everyone I know paid for their own driving lessons and their first car and had a great satisfaction from doing so.

Could you rent out a room for a year? Put the income towards extra payments on the principal mortgage amount?

I'm an avid listener of the Ramsey Show on YouTube which is focused on helping callers get out of debt and repaying mortgages/funding retirement. Once you get past the crazy salary difference between UK and USA the advice is still often sound. Maybe worth a listen.

I didn't go on holidays when I was a kid.

I paid for my own driving lessons and bought my own car, by having a job (as well as studying) as a teenager.

I'm a very successful adult.

You're being ridiculously negative.

Why would the payments go down as equity increases? Or do you just mean if you overpay?

How many years on your mortgage?

IIRC, inheritance tax is only applicable over £1m if it's a couple with a home they live in - so you'll get loads from your parents when they die even if there is some tax due!

That amount won't be wiped out with tax. More chance of it being wiped out with care fees than inheritance tax.
Just keep going through the tunnel with your fingers crossed. Having a mortgage is a better position to e in than renting these days.
I think you are maybe feeling anxious because of all you've been through that's understandable.

Just get a lodger for 1 of the rooms to help with mortgage

If your parents are well off you're more than likely to get sone inheritance surely?

Look on Rightmove and see how much it costs to rent your type of house, chances are it will be higher than your mortgage. At least buying you will ultimately own it, renters never will. And as pp have said generally your mortgage payment becomes a smaller proportion of your take home pay whereas rents go up.

Put some figures into an overpayment calculator and try to pay a small amount off each month, fifty quid will help a lot. Try to remember the payments will go down over time as your equity increases, and will feel a lot less as your wage goes up over time.
I worry about this too but doing some long term calculations has really helped.
At 57 you will also be able to use tax free lump sum from your pension if you need to

Exactly.
So many people have gained staggering amounts without "working for it"

Loads of them haven’t actually paid tax on the money. My mum bought her house for 87k in 1994. It’s now worth over 500k. She absolutely has not paid tax on the enormous windfall she has acquired due to the rise in property prices.