To ask how to come to terms with this financial situation

I'd speak to your gp as you sound very anxious and may need help be it counselling or medication. I'd then speak to a financial advisor or speak to citizens advice about how you can better your situation. It also sounds like you are grieving for your lost relationship and I'd work to come to terms with that. You are wise to realise that it's never a good idea to bank on an inheritance. There are ways you can improve your situation however you won't believe it until you hear it for yourself and get the help you need to deal with the anxiety.

How long is your mortgage term?

Isn't there a type of insurance you can take out that will pay you in the event of illness? Would something like that put your mind at ease?

I bet it's hard being in own and all bills mortgage suddenly being paid by you

But

You own your own home and you can save a little each month

Can you remortgage for a lower rate /longer term to lower mortgage now

Long term worst you sell and buy a flat when older and downsize

Why would inheritance tax wipe it out? It sounds like it’s below the inheritance tax threshold anyway and even if not, inheritance tax is only ever a maximum of 40% over the threshold. That would leave £540k on a £900k estate (it would actually be much less than that because you only pay it over the threshold) which leaves you and your brother at least £270k each which would pay of your mortgage.

I know you can’t downsize now, but as a future plan when dd is older could you go to a different area and buy a two bed and reduce the mortgage?
I know how you feel btw, I’ve got myself into a hole where I’m on a low income with virtually no pension which I can’t really change due to having a disabled child. I have moments where it completely occupies my thoughts, especially as friends are in very different positions and I also had a more financially secure childhood.

Yeah, you need to get some perspective.

Can you get a lodger? Not a great option and may be impossible with disruption. Depends a lot on house layout.

if I had a room with an en-suite and could find a female professional would seriously consider this.

Well done for having your own house and providing a stable home for you and your child.

So many people in the same boat - the hope is that in time your house will have increased in value and your mortgage will have decreased. When the time comes that you have less income, you’ll have equity in your house to allow you to downsize - buy something smaller outright (maybe in a different area if necessary) and have some money in the bank. The higher your mortgage now, the bigger that equity will be in the future - the bank wouldn’t lend it to you if they didn’t deem it to be affordable for you.
You’re also young, there’s a high probability that you’ll meet a new partner, cohabit and share the bills in the future.

For now I’d focus on creating a home for you and your child and filling it with happy memories. No one knows what the future holds but there’s no sense in worrying about the what ifs and missing out on living and enjoying the right now - your little one won’t be little forever and it sounds like you’re doing a great job ❤️

No one knows what will happen in the future, when I had feelings like this, after divorce and taking on the mortgage alone, I used to tell myself 'you are alright now, in this moment, you have somewhere to live and enough to eat, your children are OK.' I am now in my 70s and again, have moments of panic about what my life will be like in the future, how will I cope with any ill health and struggles with mobility? There is no point in speculating about things that haven't happened, just keep going, you are doing all you can, and it will be enough.

How long is your mortgage term? If it’s 30 years, you can reduce it in the future when you have more equity and potentially more income.

None of us will get to retire at 60!

Is your ex paying as much as he should be? And contributing to extras for your DD?

Your sense of what’s normal is warped by having grown up with money. You’re in a far better position than most single parents.

But OP, kindly, I don’t think it’s really about the house. Once you’ve come to terms with the split and your life having changed, things will start to feel a lot better.

Op with the kindest respect.

You do have a buffer, you have savings. You managed to put away £60 this month. Many people can't afford to put that away and many can't afford to feed themselves by the time their bills are paid. You need to be easier on yourself. People have made suggestions so I won't bleat on.

Maybe see your gp. You've gone through a big change and that's hard

I've been in both positions. 6 years ago my "pay" from my good career didn't last all month and it was awful.

Even better. But I didn't know whether OP had both living parents so even in the worst case scenario where she would have to pay "something", it is not going to "wipe out" the entire inheritance as she seems to think.

No if the home is 900k and it is two parents who own nothing will be tax as they both have the 500k allowance for a house (we just sold my in laws house for 900k and didn’t pay tax)

Once you've built up your emergency savings switch to paying off the mortgage at a slightly accelerated rate. It will do wonders for your mental health. You'll see the principal start to drop and assuming you can do it regularly and in small amounts your minimum payment will drop as well. Once it does drop don't pay just the minimum keep paying what you were paying and the decrease will accelerate. It doesn't take a lot of overpayment to see a significant savings on interest payed over the term of the loan. As a bonus usually the overpayments are applied to the principal, but also held in a reserve so for some reason if you needed to hold off on paying you could once you had built up a significant reserve. We will have payed off our house in 13 years instead of the 25 year term simply by making regular overpayments. We hammered it before we had kids, but since then it was more of a consistent £120 overpayment (over the past 6 years) and keeping the payment at the original minimum and not the refactored minimum given that we had overpayed so much of the principal.

Essentially, hopefully with the above you'll almost be at an inflection point and things will just get better and better until the house is payed off and then you're gravy.

there's been enough in the news about inheritance tax recently - how can you not be aware that with two parents and primary asset being the home you'd be within inheritance thresholds? If you've not heard any of that, googling inheritance tax thresholds takes ten seconds.

that aside - and their assets could get swallowed up by care fees, what is the term of your mortgage?
For women, pension age has risen in recent years from 60 to 67 - so yes, lots of people are working longer.

You're in a better position than people renting, and you're able to save a small amount..
Try being more logical about some of the things that you're so anxious about.

Yes but you are only 40 🙂 In another 20 years you will have a lot of equity.

There is no sense worrying now about what your situation will be like in 30 years time. Your Dd will be all grown up. The political and economical landscape will have totally changed. So will our lifestyles and infrastructure. You’re okay for today, tomorrow and next year. Focus on that 👍

You could always rent out the 3 bed you’re in now and then use the rent you get to rent somewhere smaller for yourself when you’re older.

You’re overthinking this a lot. You have a lot of options long term.

When I split up from my ex husband about 7 years ago I ended up with the house on my own.
I was terrified however I'm still here. The things that helped me were making sure all my insurances are in place- house, buildings, life, insurance protection.
As my kids have got older I've been able to work and earn more (I've always worked FT but I can apply myself more and I've moved up the salary ladder).
Owning a house is a massively amazing position to be in/ try and think longer term.

OP, in the nicest possible way, you're being ridiculous and you need to stop believing whatever rubbish you're reading that makes you feel like this.

You 'only' have a 3 bed house that you're buying with a mortgage that you've qualified for so the lender has deemed to be affordable? You have nearly 30 years before retirement age, so it should be paid off by then?

Presumably you have a workplace pension?

You're worried about inheritance tax 'wiping out' what you'll inherit? Perhaps read up on it? There's a £325k allowance and the tax is 40% over that, meaning that if the £900k house is your parents only asset, you'll inherit about £335k as your half of the value of the house after IHT, so enough to pay off your mortgage and leave a six figure sum on top of that. That's an enormous amount of money.

You would really benefit from therapy to see this situation more clearly. You've gone through a huge emotional shock with the separation and you seem overwhelmed. Your kid will not mind they didn't have the clubs and activities you had as a child, but unless you get help your mindset and anxiety will be the thing to ruin their childhood. Especially as she'll also be dealing with the trauma of the separation. Please, please focus on your emotional wellbeing and healing, not your finances.

Worst case scenario is that you could sell your house and use the equity to pay the rent. Or your daughter grows up and you get a lodger. Or you remortgage and take longer to pay off the house. Not ideal, but there are options available to you as you have equity.

Best case is that you meet someone who shares the mortgage (much easier with two payers). Or you inherit enough to pay off the mortgage. Or you get a promotion that makes the situation easier. There are all sorts of possible scenarios in which your life turns out just fine.

Having a young child is a huge responsibility, and I suspect your financial anxiety is rooted in that. As she gets older, and the mortgage gets smaller life will get easier. Nobody can see the future, but you are in a better position than many, and whilst it’s a slog now, it will get easier. Lots of people have few (or no) savings at 40.

Maybe talk to someone about your anxiety? Your life has changed massively and it would be surprising if you weren’t anxious. If you can get through the worst of that and realise that your position is nowhere near as dire as you think, things will get better in general. You need some decent sleep. Look after yourself and your health, and the rest will follow.

If you want genuine advice you need to put figures down; income, outgoings, mortgage term, pension.

You still have 20+ years of working, your wages will increase with inflation whilst your mortgage payments should stay relatively static, your daughter will move out, you can over pay as the situation gets easier.

Yes, this is what many people will do. In 30 years the home will be worth more so you could pull out some equity, downsize, or move into retirement accommodation. It really is not worth worrying about now (and certainly not at 3am).