Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

Chat

Join the discussion and chat with other Mumsnetters about everyday life, relationships and parenting.

Flip

1 2 3 4 5 6

Original poster

Do you see mortgage as a debt or a do you see it as just another bill?

148 replies

burpsburp · 01/05/2021 17:12

I was talking to a friend recently and she was aghast that we were overpaying the mortgage to reduce it as much as we can and hopefully be mortgage free sooner than not. Our payments aren't ridiculously high as some others' on MN but we aren't high earners and have a very modest income so it's a decent chunk to us.

She perceives her own mortgage as a bill lik rent etc and eventually it will finish at the end be of the term which is so mant years ahead that it's not worth stressing over now. She'd rather spend the money on whatever now and enjoy life right now and doesn't see it as a debt. Whereas I've always seen a mortgage as a debt. A bloody massive one at that and one I want to get rid off. I do understand where she is coming from but even by paying a little bit extra each month, I can see the years slowly going down. She thinks I'm being mad and I'll be dead before I've even paid it off and it wouldn't have been worth it. I see her point.

Does anyone else see it as a massive burden like I do or just another bill like utilities etc and part of daily living costs?

OP posts:

SpnBaby1967 · 01/05/2021 20:10

It's always just been a bill to us, but we recently started the process of buying a much nicer and bigger house as we outgrew this one with a mortgage 3 times the size so we plan to overpay it as much as possible.

We dont really have debt anywhere else though, but having been in debt ......serious debt before, where I literally couldn't sleep for worrying how I would make the next pymt, I have never seen the mortgage in the same light. It's just always been the first thing we pay.

InpatientGardener · 01/05/2021 20:14

I view it like a bill on a month to month basis, a bit like rent in the sense I pay it and don't really think about it, but we also overpay with the goal of being mortgage free a lot sooner than the term states. So in the long term sense I see it like a debt, but its not one that might make me feel uncomfortable like if I were to have a credit card rack up.

RedcurrantPuff · 01/05/2021 20:15

@CeeceeBloomingdale

I see it as both. We never overpay but always reduce the term when we remortgage.

Us too

Interested in this thread?

Then you might like threads about this subject:

General money

SimonJT · 01/05/2021 20:17

Bit of both, while my interest rate is low my mortgage is very big, so its still significant interest really.

I overpay, I want to be mortgage free as soon as I can without being too extreme, I want to retire early as I’m a type one diabetic, so my life expentancy is reduced, so I would like to have a retirement I can enjoy it.

I’m more relaxed now two people are paying the mortgage as there isn’t as much pressure on me, but it makes it easier to overpay.

KihoBebiluPute · 01/05/2021 20:19

I don't see it as a debt or burden because the value of our equity is plenty and in the event we decided to sell up and rent instead we would be plenty in credit. The mortgage is more like "rent" on the fraction of the house we don't own yet.

However we still overpay as much as possible because the sooner we can be mortgage free, the sooner we can start diverting the same monthly amount towards pension, as I am very conscious that without significant additional investment, our retirement income will be about half what we currently bring home and I don't want to see a massive drop in our standard of living so it seems imperative to me that we have a plan to get the mortgage paid off and other investments built up asap. Theoretically we could put the money currently going into overpayments straight into new savings and investments instead but tbh the certainty of interest on the mortgage beats the uncertainty of doubtful returns on savings and investments at the moment!

OldWomanSaysThis · 01/05/2021 20:23

It's secured debt as long as there is equity.
Your house is the collateral that can be sold if you can't make payments. if you do make payments and sell, you get the payments back.

Credit card debt, student loan debt, etc. - is real debt. It's unsecured.

The housing bust was in part due to lack of equity and the housing debt being unsecured, so selling the collateral didn't help. You didn't get your payments back.

So, I see mortgage loan as slightly different then regular debt - if there is equity.

Terminallysleepdeprived · 01/05/2021 20:23

It's not a debt in real terms, so long as you cam afford it. I see it more as an investment.

My mortgage was 67k when I took it out and 2 years on is 64k so I can see it going down. I am not over paying at the moment as I simply can't afford to without having to make massive cut backs like cancelling dancing lessons for dd which I am not prepared to do.

I am a single mum, the mortgage is less than half what rent would be on a much smaller house and I don't live in an expensive area.

JennyBond · 01/05/2021 20:26

@Angelica789

Financial advisors never recommend over paying as interest rates are low and you’ll get a better return by investing spare cash elsewhere. I would only over pay if I wasn’t going to be mortgage free by retirement age.

That’s probably right, but being mortgage free gives you much more financial flexibility and less stress I find. Knowing we won’t lose our house if both OH and I end up out of work had been a real comfort this past year when things looked rocky for both of us at one stage.

That said, paying ours off coincided almost exactly to the day with when we started to pay school fees so we’ve not seen any real benefit month to month.

Also for me there would always be that temptation to dip into savings so paying the mortgage off was a better option for me.

That’s just personal to my circumstances though and I can see why others chose to save instead. I think anyone who isn’t using their pension allowance should always do that first instead.

MissDollyMix · 01/05/2021 20:27

Neither! I see it as a payment plan. Like putting money aside for savings every month.

paralysedbyinertia · 01/05/2021 20:29

We saw ours as a debt and paid it off as quickly as we could. Saved ourselves thousands. I'm so glad we did as our household income has taken a massive nosedive. I am so glad that we have the security of owning our own home.

Bagelsandbrie · 01/05/2021 20:33

It genuinely never occurred to me to overpay on a mortgage until Mumsnet. Having a mortgage is one of the cheapest forms of debt you can have. If you borrow sensibly and don’t over stretch yourself there is no need to frantically try and pay it off.

We are very fortunate not to have our mortgage anymore (paid off) but we always treated it like another bill really.

BackforGood · 01/05/2021 20:34

I agree with JennyBond - it is about your home, so more than a financial decision on its own.
The knowledge that losing your job won't mean losing your home is fab. Owning the home without a mortgage also gives you choices as you get a bit older - you can work part time, or decide to retire early or whatever - or, of course, choose not to.

BlackLambAndGreyFalcoln · 01/05/2021 20:36

As a time-limited debt. I don't overpay though as with interest rates this low pensions and investments generate a much better return for my money.

Vetyveriohohoh · 01/05/2021 20:37

I see it as a debt, DH would love to overpay but as our rate is about 1.4% until 2026 I’m investing anything we could’ve overpaid elsewhere

DisgruntledPelican · 01/05/2021 20:40

I overpay when I can, but I don’t see it as a debt in the same way as credit card debt, ie a low-level worry until paid off in full. In the same way I don’t see being mortgage-free as a goal - maybe because I’m still working my way up the housing ladder?

BlackLambAndGreyFalcoln · 01/05/2021 20:42

Student loan debt is not unsecured "real debt". Unlike credit card debt you only make repayments if you earn over a certain amount each year and if you don't repay it all, it will at a certain point be wiped completely (repayment thresholds and wiping date depend upon the year you originally took out the loan). It works in practice like a graduate contribution tax repayment, not a loan.

percheron67 · 01/05/2021 20:43

I no longer have a mortgage but looked upon it a a savings account!

TillyTopper · 01/05/2021 20:44

It's a debt and I also overpay.

DMCWelshcakes · 01/05/2021 20:45

The way I see it, I rent a house off the building society & if I'm good, after a certain number of years, they'll give me a free house.

whensmynexthol1day · 01/05/2021 20:47

If you're in your 'forever home' I would absolutely prioritise pension payments over mortgage overpayments. The longer the money sits in your pension the more it can accumulate and benefit from compound growth. The growth I've had in my pension over the last 18 years has well exceeded mortgage rates. I don't understand the view that you pay your mortgage off first and then focus on pension- that is totally the wrong way round!

name674398 · 01/05/2021 20:49

Somewhere in the middle. I'm aware it's a debt I want to get rid of, and we do over pay a little, I don't want to pay it to the end of the term. But equally, I'm mindful of the fact we have children now and I don't want to restrict our income too much with a young family, very focussed on making memories and aware we have decades of working ahead of us (had kids early 20s) so I'm not going to restrict our spending too much just to be mortgage free from a young age. There's more to life, and it's comfortably manageable. I will prioritise it when kids are grown by which time we'll only be early 40s! (We do pay a lot in various insurances, income protection etc).

CheesecakeAddict · 01/05/2021 21:01

A bit of both. I see it as a rent payment but one I do want to pay off. My student loans I see as a debt that I'll never pay off, so I don't try. Whereas my mortgage I do intend on paying off and hopefully before I'm 60 so I can retire early (currently due to pay it off by 65). But I can't afford to overpay so I don't stress about it.

doomonic · 01/05/2021 21:05

The knowledge that losing your job won't mean losing your home is fab. Owning the home without a mortgage also gives you choices as you get a bit older - you can work part time, or decide to retire early or whatever - or, of course, choose not to.

It depends on other factors though doesn't it, savings & insurances mean you can still have money if you lose your job.
Plus if you have a lot of equity you may downsize as you get older or whatever. Like I said upthread I don't really see the point of overpaying but we could sell tmw & buy something in the outer zones or further out & be mortgage free so I guess that makes me feel ok.

Montysauras · 01/05/2021 21:06

Somewhere in the middle... although I hate having a big mortgage..we don’t plough all our money into it but do overpay and have reduce the term. I do a payment every day (basically just round my bank account down every day so £1-2 a day) However DH is very good with money (me not so much ) and he does shares etc, we both have cash savings so we have eggs in a few baskets

Spiderplants · 01/05/2021 21:07

We are overpaying now as a few friends have got in to financial trouble since the coronavirus crisis. It’s made us reassess our priorities and try to clear the mortgage.

Flip

1 2 3 4 5 6