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Original poster

People could cut housing costs to retire early

107 replies

ThoughtsQuestions · 26/01/2026 07:51

The statement is "people could cut housing costs to retire early" but I'm not sure how much I believe myself and trying to figure out my priorities.

Here's my situation for context;

I paid off mortgage on a very small home in my late 30s. It's a safe area, close to shops and a park. It's cheap because it's small and not a fancy building. My living costs are quite modest because I don't need to pay for housing. But in some ways, I'd love to live in less cramped conditions

Our annual family income (pre-tax) is over 50% of the value of the house. People on a similar income live in much bigger places, with a big mortgage.

I changed sectors and pay went up more than expected. The big pay feels temporary, ie if I stop working, I doubt I'd be in the position again. But I don't get enough time with my young kids

I'm weighing up my priorities at the moment.
Pros : financially free, could retire early if trajectory is same for a few years.
Cons : work's very stressful for the high pay AND we have a v small space to bring up kids. But really the kids don't notice, yet!

Lots of questions.....
Is a home that's much cheaper than you can afford worth the freedom it enables?
Curious what others would do, I notice the mismatch in finances + stress + free time vs the quality of our living accommodation compared to the norm?
Have you been in this situation and gone through this phase? What did you think in retrospect?
Why are so many older people living in such valuable homes and not making this trade off? I always assumed that if your house went up by so much money (those in detached homes in SE worth close to or way over £1m), people might cash out more. Especially as children moved out.

OP posts:
CommonlyKnownAs · 26/01/2026 08:03

Agree some people have bought more expensive properties in the hope they'll perform well as an asset. I think going forward that's going to be less common though, property isn't as good an investment as it was.

Original poster
ThoughtsQuestions · 26/01/2026 08:02

Illbethereinaminute · 26/01/2026 07:57

I'm not sure, we could overpay our mortgage and this gets if paid off earlier if we don't move house/have an extension but where is the rest of the money coming from to fund the retirement?

At 40, my pension is terrible, my husband's is better but way could it fund us retiring at say 50 especially when the kids won't be fully fledged.

I would rather pay extra towards a bigger house and work part time if possible to keep me occupied. Early retirement would mean a lot of sitting around bored with no money to do anything.

Depending on the value of your house, your pension might not need to be terrible. But i suppose you always have the option to downsize later in life to unlock funds.

I imagine if I retired, I might still work but with much less intensity and time to invest in skills I enjoyed. I think I would do sport and be more healthy. I'd also do budget travel for a few months over the summer. But there's a high cost now.

OP posts:
ScholesPanda · 26/01/2026 08:00

Whilst you're younger and working age, it can make sense to take the risk and buy a larger, more expensive property- increases in asset prices have outpaced increases in wages (and you don't necessarily need to work any harder to earn an asset price rise). You can also leverage debt against your property cheaply (comparatively), to invest or improve your standard of living.

Amongst older people, some will release equity and downsize, particularly if they've always planned to do this. However, if we assume they've paid off their mortgage they may feel like staying in the home they like and are used to.

If you're happy with your property I wouldn't overstretch yourself. Particularly if it gives you options to improve your lifestyle.

RedRiverShore6 · 26/01/2026 08:00

What age is early retirement, how old are you now, you say you paid it off in your late 30s but the children are not old enough to notice. How small is small.

CommonlyKnownAs · 26/01/2026 08:00

We still have a mortgage, but otherwise our numbers are about the same as yours. Haven't moved from our pretty cheap house because we don't want to. The finances don't make much difference though, it'd be nice not to have to pay a mortgage but it's only 10% of our post tax income. Wouldn't be retiring off that. I do like the freedom you mention here though, life is much nicer than it would be on the next rung up.

Rewis · 26/01/2026 07:58

Depends how small we are talking about. It is worth getting a bigger place if current place is a 40m2 one bed where kids share a room and you sleep on a sofa bed. Or if it is objectively a decent sized house with enough space but feels small just because others have bigger houses?

As for why old people live in big houses? Because it is their home. Why would they want to leave the space that has been theirs for decades if they can still manage there.

Illbethereinaminute · 26/01/2026 07:57

I'm not sure, we could overpay our mortgage and this gets if paid off earlier if we don't move house/have an extension but where is the rest of the money coming from to fund the retirement?

At 40, my pension is terrible, my husband's is better but way could it fund us retiring at say 50 especially when the kids won't be fully fledged.

I would rather pay extra towards a bigger house and work part time if possible to keep me occupied. Early retirement would mean a lot of sitting around bored with no money to do anything.