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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:
SandysMam · 01/05/2021 21:10

We pay an extra £225 a month off ours (it’s £775, we round it up to £1000). This will shave 7 years off our term and save thousands in interest. I think if you are a bit crap with money and into investing etc this is a tangible way to work towards something. However I would happily stop this if we needed to save for a big holiday or something although equally, could fritter £225 away in a month on shit quite easily!

SandysMam · 01/05/2021 21:10

Not into investing that should say!

ForensicAccountant · 01/05/2021 21:14

@Angelica789 Financial advisors never recommend over paying as interest rates are low and you’ll get a better return by investing spare cash elsewhere.

Advisers recommend paying off your mortgage as quickly as possible. We have never had interest rates as low as this and anyone my age will remember standard rates of over 5%. People my age will also remember endowments, investments you would take out and only pay interest on your mortgage. Profits were promised but at one point things turned ugly and there are now thousands of mortgage prisoners who pay over the odds interest with mortgages they can neither pay off nor are they able to remortgage.
Securing a loan against your home is risky as are investments that have a potential to give you a good return.
In fact, there have rulings by the Financial Ombudsman Service against advisers who have recommended people remortgage with capital raising and investing the money elsewhere as this is not deemed suitable advice.

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General money
CruellaDaVille · 01/05/2021 21:19

I always saw it as a debt.
I visualised every £1000 I owed as a brick of my house that the bank owned.
Every over payment I made got me closer to owning another brick.
It was a huge relief to get it paid off 10 years early.

SciFiScream · 01/05/2021 21:21

It's a debt. It's a bill. I'm renting my house from the bank. It's like hire purchase.

We over pay. I want to have the security of owning the house outright ASAP.

But we don't go daft with our overpayments. We both pay into a pension and we still have enough money to live a little.

It's about finding the balance.

We've only had a repayment mortgage for 6 years (expensive nursery fees meant we were on an interest only mortgage for years). We were interest only for 9 years. We remortgaged recently and still have 23 years and 6 months to go.

So we're overpaying to try and catch up. To try and get to where we might have been without those 9 years of interest only. We might pay off 12 years early, and will be in our late 50s by then.

MrsToadlike · 01/05/2021 21:23

For me it's a debt. And as we have a big mortgage, it's a priority to overpay, which we do every month. In case one of us ever lost our jobs - it just makes sense to get the total down, when we can. And at the moment we can touch wood.

However if we had a smaller mortgage (and therefore smaller monthly payment amount) I would probably view it as just another household bill.

MiddleParking · 01/05/2021 21:24

I see it more like a bill but I think that probably comes from a place of privilege. I do find it weird when people think a mortgage is the bank owning your house though.

delilahbucket · 01/05/2021 21:25

We overpay our mortgage while savings interest rates are so poor but we've struck a balance as we don't want to spend all our money paying off the mortgage while we have a child to bring up who can benefit from us saving.

OublietteBravo · 01/05/2021 21:28

I see it as a bill. I don’t overpay. I have >50% equity and the amount outstanding is barely 2x my annual income. I’m due to pay it off before I retire. I’ve been prioritising other savings for the past several years. Which means I can finally afford to remodel/extend this year to make the house as I want it to be. I do tend to reduce the term each time I remortgage though.

Spiderplants · 01/05/2021 21:32

I wonder if it’s an age thing? I have lost two close friends recently and I feel worried about leaving Dh with a mortgage.

megletthesecond · 01/05/2021 21:34

Debt. I overpay, almost there thank heavens.

BeenAsFarAsMercyAndGrand · 01/05/2021 21:34

@MiddleParking

I see it more like a bill but I think that probably comes from a place of privilege. I do find it weird when people think a mortgage is the bank owning your house though.
Except the mortgage means the bank DOES own your house. If you miss payments, they have the right to take the house.
name674398 · 01/05/2021 21:36

I wonder if it’s an age thing? I have lost two close friends recently and I feel worried about leaving Dh with a mortgage.

Life insurance?

Spiderplants · 01/05/2021 21:38

@name674398

I wonder if it’s an age thing? I have lost two close friends recently and I feel worried about leaving Dh with a mortgage.

Life insurance?

Oh my goodness! I KNEW there was something I had forgotten! Luckily your waspish reply reminded me. Thank you.
name674398 · 01/05/2021 21:39

@Spiderplants Hmm christ calm down, sorry I didn't interject with a load of waffle to fluff up the response but it's a pretty fair question.

Spiderplants · 01/05/2021 21:42

[quote name674398]@Spiderplants Hmm christ calm down, sorry I didn't interject with a load of waffle to fluff up the response but it's a pretty fair question. [/quote]
Perfectly calm, good job we have you around these parts to interject your wisdom.

jasjas1973 · 01/05/2021 21:44

@MiddleParking

I see it more like a bill but I think that probably comes from a place of privilege. I do find it weird when people think a mortgage is the bank owning your house though.
They do, stop paying and they'll have it back!

Def a debt, we paid ours off in 14 years and saved a fortune in interest payments, 'rates were a lot higher though.

SuperLoudPoppingAction · 01/05/2021 21:45

I think that's part of it for me. What if interest rates go up and it becomes onerous to pay? I feel like the more I pay off, the less that worries me.

name674398 · 01/05/2021 21:46

@Spiderplants oh gosh hunny I hate to be intrusive and do just ignore me it's obviously none of my business but I just have to ask, why are you worried about leaving a mortgage, are you not able to get insurance? I just assumed you had more to say Xxxxx ThanksThanksThanks

That better for you love? Hmm

Spiderplants · 01/05/2021 21:46

[quote name674398]@Spiderplants oh gosh hunny I hate to be intrusive and do just ignore me it's obviously none of my business but I just have to ask, why are you worried about leaving a mortgage, are you not able to get insurance? I just assumed you had more to say Xxxxx ThanksThanksThanks

That better for you love? Hmm[/quote]
Ooh so sassyGrin

Crustybreadandbutter · 01/05/2021 21:49

A bit of both. More like a bill than a personal loan but still aware it’s a debt (and overpay if can).

Spiderplants · 01/05/2021 21:49

@SuperLoudPoppingAction

I think that's part of it for me. What if interest rates go up and it becomes onerous to pay? I feel like the more I pay off, the less that worries me.
It’s definitely sensible, it’s a fundamental part of our financial planning, especially with interest rates so low. Having seen close friends struggle with long term illness and paying the mortgage, it’s a priority for us now. Cancer can linger for years Sad
MiddleParking · 01/05/2021 21:56

They do, stop paying and they'll have it back!

Yeah no I’ve heard of mortgages, I’ve actually got one. A secured loan really doesn’t mean the bank owns your house while you’re making the payments. People with mortgages are homeowners.

Youdontknowwhatyoureonabout · 01/05/2021 21:56

It keeps me awake at night. We had to increase our mortgage to move as the previous house was making me ill. DH can’t get life insurance due to health issues so we overpay as much as we can to reduce it quicker. It’s a worry.

jasjas1973 · 01/05/2021 22:05

@MiddleParking

They do, stop paying and they'll have it back!

Yeah no I’ve heard of mortgages, I’ve actually got one. A secured loan really doesn’t mean the bank owns your house while you’re making the payments. People with mortgages are homeowners.

Quite "while you re making the payments..." in other words you do not have ownership.

However, for me it no longer matters, a reduced term over payment payment plan with no penalties is what we did.

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