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Original poster

Mortgage =debt ?

46 replies

Paranoidmarvin · 09/11/2020 20:01

Had a conversation with a friend the other day and she got me thinking. She doesn’t see her mortgage as a debt she just sees it as a fact of life. Something everyone has. As she could sell her house and the amount she owned would be gone.

I see it as a debt and hate seeing it on my online banking as it reminds me of how much we owe.

How do u see yours.

OP posts:
SonjaMorgan · 09/11/2020 21:12

Both are you are right I suppose. Yes it is a debt and we try to overpay the max amount per year. But if we weren't paying a mortgage we would be renting. At least this way we will be able to be mortgage free and just pay maintenance.

NaughtipussMaximus · 09/11/2020 21:14

Technically it is debt, but it’s much more like an investment in our eyes. We don’t have any other debt.

Mendocino · 09/11/2020 21:29

Paying a mortgage means that each year your capital worth ( assets minus debt) is growing. This is assuming no dramatic house price drops but with a decent deposit and an intention to play the long game this should not be an issue. This is hugely preferable to rent and massively different from debt used to buy goods that quickly depreciate in value ( cars, luxury goods etc. ) Growing capital is a smart financial move.

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BarcelonaFreddie · 09/11/2020 22:26

Love GeorgiaGirl's idea of it being a 'rent to buy'
Agree with that.
You'd have to pay rent if you didn't have a mortgage... I don't view it as debt like a loan or credit card.

PicsInRed · 09/11/2020 22:31

I see it as cheaper than rent, more secure tenure, more freedom to do what I want with the place and no arguing with rapacious landlords to have basic necessities fixed. At the end, I'll have a lovely paid off house.

I don't worry about my mortgage in the slightest - I love my mortgage.
.

DuzzyFuck · 09/11/2020 22:33

I think of my flat as an investment, not a debt.

That said, I was lucky enough to put down a substantial deposit as well as seeing the market here boom, so it's quickly earned a nice amount and the chances of my ever being in negative equity are slim. If that wasn't the case then I might feel differently.

MaudHatter · 09/11/2020 23:52

A mortgage is a debt .

notangelinajolie · 10/11/2020 00:00

No, it's an investment.

maryhadalittle · 10/11/2020 00:05

I see it as a piggy bank minus the interest rates. Each month I will be paying and in the end (hopefully) would have my own house whereas renting, it's never going to be mine. So overall, it's an investment.

FinallyFluid · 10/11/2020 00:08

To quote my mother, it is rent on steroids. Grin

Once you get over the initial hump and have some equity it ceases to be a total debt. IMO.

BarbaraofSeville · 10/11/2020 03:24

It's debt, but not like credit card or overdraft debt as it is buying somewhere to live and investing in an asset at the same time.

If you didn't have the mortgage you would need to pay rent, and wouldn't be building up the asset.

After 25 years of paying rent, you have nothing to show for it. After 25 years of paying off a mortgage, you own an asset that can give you free and secure housing for life or can be sold for money.

Topseyt · 10/11/2020 03:49

A mortgage is definitely a debt, but it is a debt that has enabled you to make an investment which should in most cases appreciate in value. So it is a good debt, not a bad one.

It is also a fact of life. The two are not mutually exclusive.

lovelemoncurd · 10/11/2020 04:14

I see it as an asset. I bought my first house for 35k I sold it for 75k. I bought my second house for 85k and sold it for 300k. I have had a mortgage but always viewed a house as an asset and certainly would not have achieved this renting!

KihoBebiluPute · 10/11/2020 04:30

A mortgage isn't the same kind of thing as a debt like credit cards or other consumer debt. I consider myself to be living "debt free" despite my mortgage and credit cards because all my credit cards have a direct debit to pay off the balance in full every month and the mortgage doesn't count.

The mortgage isn't a real debt because it's secured on the asset of the house, which is worth way more than the value of the debt so those numbers cancel eachother out. Effectively I have an asset of a house worth £Xx0,000 and all the mortgage means is that the bank is effectively a current co-owner of that asset with me, with a share of ownership currently worth about 35%, but I am gradually increasing my share every month and eventually will own it 100%.

Debts are generally repayments from historic events of living beyond ones income. Being averse to holding such debt is sensible.

It is not sensible to be averse to a mortgage debt unless you are at risk of negative equity. So long as the mortgage is significantly smaller than the value of the house it is a financially sensible way to structure an investment purchase.

WattleOn · 10/11/2020 04:39

I’m with you, OP, it is a debt.

Some people talk about ‘good debt’ and’ and ‘bad debt’. I understand why they say that but I disagree with it.

Debt is debt.

Accept that in the modern, western world, incurring debt may be favourable in the long run (usually when it is paid off) but it is still debt.

anxiiousone · 10/11/2020 06:36

@Littlemissweepy

It’s a debt, offset by an asset (assuming not in negative equity)
Me too
joystir59 · 10/11/2020 06:37

Of course it is a debt.

pastandpresent · 10/11/2020 07:06

I think it's both. If you don't have a mortgage, you would likely to have to pay rent. So it's a fact of life, as well as debt with asset.

Ylvamoon · 10/11/2020 07:16

It's a debt that eventually will be paid off.

Rent is a living cost, you will never pay it off. Just like your utility bills.

Valkadin · 10/11/2020 09:55

Its a debt that’s ultimately an asset unless you end up in negative equity.

OnlyFoolsnMothers · 10/11/2020 10:00

Fact of life for me- doesn’t stress me, there isn’t an alternative and tbh if u have a mortgage I consider that very lucky- vs renting

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