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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:
MiddleParking · 01/05/2021 22:12

No, that’s not what it means. You do indeed have ownership. Very concerning that people are allowed to take out these financial products without understanding the nature of them!

Squirrelblanket · 01/05/2021 22:17

It's both, debts ARE bills.

We don't overpay ours but we didn't want a huge never ending mortgage to begin with so we were careful in choosing our house. Most of my friends have bought houses costing the maximum that they were allowed to borrow. We'd rather have a smaller house and get it paid off quicker as we'd like to retire early, ideally abroad. Horses for courses. 🤷‍♀️

We also take the term down every time we remortgage.

BackforGood · 01/05/2021 22:46

As many have said.
It is a balance.
It also depends on things like your attitude to risk and your employment status.
If you work in a fairly secure role, you will look at things differently from people who freelance, or work on short term contracts.

If you work in a job that you can't see yourself doing at 67 (perhaps nursing, teaching, or as a builder or some other physical role) then your thinking might be different from someone who works in an office.
Someone upthread said they 'wouldn't prioritise paying down their mortgage over paying into a pension', but I've paid into a pension since the day I started work, and never see that money as it is taken before my pay hits my bank account, so it doesn't occur to me to mention that - in my mind, pension is like NI or tax - it is never mine in the first place to 'choose' whether to pay it or not.

Interested in this thread?

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General money
WingingItEveryDay7 · 01/05/2021 22:51

We see our mortgage as a debt to be paid off ASAP!!

We bought our first house 11 years ago and made overpayments straight away. Once fixed term was up we got a brilliant deal because we'd paid off loads. Continued making overpayments on the next deal and guess what, next fixed deal we did was even better. The more you pay the less interest you accumulate, therefore, less and less to pay and so on. We've just upgraded to a house twice the size with a decent mortgage, which we wouldn't have been able to do otherwise. Not been here long and still settling in. There's a few jobs we want to get done and then we'll start making overpayments again. Just makes sense to me 😁

ForgedInFire · 01/05/2021 22:56

I don't actually have a mortgage yet as we are in the process of buying our first home and are renting currently. But I see it as a bill like rent and we don't intend to overpay by much if at all. I would rather have the extra money to enjoy while we and our kids are young then be mortgage free in 20 years

gurglebelly · 01/05/2021 23:17

I see it as a debt and overpay as much as I can, but don't reduce the term - that way if we need to stop overpayments we have a lower monthly payment and have some breathing space.

JustGotToKeepOnKeepingOn · 01/05/2021 23:54

"when I make that last payment but I will sigh a sigh of relief."

I was always told to keep a tiny bit to pay on your mortgage so if you needed cash you could easily release equity...

Not something I need to worry about... I didn't buy until I was in my 40s so I've a long way to go yet. I do overpay as I see it as a debt.

TheNestedIf · 02/05/2021 00:34

I came under threat of redundancy during my fixed term mortgage rate. The day that fixed term up, I started ploughing in as much money as I was allowed and that I could spare until it was all paid off. These days, when there is yet another "restructuring" at work, it's not quite the panic stations moment for me as it is for some of my colleagues.

Pinkpaisley · 02/05/2021 01:49

Our mortgage interest rate is so low that it really doesn’t feel like debt. It’s just a monthly housing expense that will eventually disappear.

JackieTheFart · 02/05/2021 02:44

I couldn’t pay off enough for it to make much of a difference at the moment, I have other personal debts I’m paying down earnest first.

Also I’m on a 1% rate or something so low I barely think about it. I’m overpaying twice the amount of my mortgage on the other debts, have paid off £10K in a year.

Rainbows89 · 02/05/2021 02:51

I see it as a bill each month like rent.

Ours is massive unfortunately and we can’t afford to pay anymore than we do.

If and when we get some inheritance though I hope we will be able to pay some off.

I’m sure we will downsize at some point.

Equimum · 02/05/2021 07:57

On a month-by-month basis, I think of it as a bill, but we treat it as a debt otherwise, and overpay. The more we can knock off it, the less the hit of interest rates rise. At the moment, overpayment has also allowed us to get to a better LtV ratio faster, thus reduce our payments and enable us to overpay by a greater amount, while still only putting the same sum into it.

CrazyHorse · 02/05/2021 08:24

I've just realised we've got quite a short mortgage term compared to some other people, which is one reason we don't/can't overpay.

RoseMartha · 02/05/2021 08:37

I see it as both.

My exh and I never overpaid but what he did do which annoyed me was over a period of several years he kept changing providers and re started the 25 years so it seemed to never go down, I was not allowed an opinion on this and told I had to agree as he paid it, so when we divorced we should have almost paid it off but in actual fact there was over 10 years left on it.

After he left I did pay the mortgage on my own for a couple of years while the divorce went through. But it was sold as per FO. There was no way I could have overpaid with my income.

I am not in a position to have a mortgage at the moment. I do own a small flat at the bottom end of housing market and consider myself lucky.

MiaowMiaow99 · 02/05/2021 10:14

It is a debt, with low interest but it's the fact it spread out over so many years that makes the interest really add up.
Borrowing any money thats not interest free in always cheaper if you do it over the shortest time period.
We're saving thousands by overpaying. It's not just about paying the debt off by retirement but literally repaying the smallest amount on money back as possible.
Of course a financial investor is going to sway you away from overpaying as he wont make an income from that.

MrsAmaretto · 02/05/2021 10:15

We overpay a set amount each month so I see it as a bill, but one that will be finishing soon.

Both my parents are dead and as their adult child we inherited nothing from their pension. Given their youngish deaths I’m not sure I’m going to get any benefit from my pension but would benefit from having my mortgage paid off!

I was mortgage free at 31, and am only living in this house due to the £150k deposit it gave me.

redcandlelight · 02/05/2021 10:26

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

get the calculator out to work out how much interest you are paying to the bank compared to what you could save or put in a pension to pay for care in old age.

we split any work bonus/saving at the end of the year between pensions/mortgage/rainy day savings.

as pp say, a lower mortgage gives a bit of breathing room should income drop.

Hobnobsandbroomstick · 02/05/2021 10:31

The word ortgage literally translates "death debt/contract/pledge" in Latin and Old French apparently.

I'm saving for a deposit atm, when I finally get to the mortgage stage I'll make some overpayments if I can afford to.

Why does your friend think that you'll be dead before you've paid it off?! Confused

PegasusReturns · 02/05/2021 10:48

Every financial advisor I’ve dealt with has said you’d should prioritise saving over mortgage overpayments.

Generally the advice seems to be:

Insurance (life, critical illness)
Short term savings (3-6mths)
Pension
Long term savings
Mortgage

KeyboardWorriers · 02/05/2021 10:54

A bit of both really.

We would have to pay rent, which would be far more, if we didn't own our house.

On the other hand it feels satisfying to overpay a bit each month and chip away at the debt and the mortgage term.

So we overpay monthly and also a bit of any windfall (overtime etc) goes into overpaying, but equally I don't sacrifice our standard of living for it. Life is for living. Extreme frugality is not for me.

FindingMeno · 02/05/2021 10:56

Oh definitely debt.
If I could have housing security and pay off rent ahead of time, I would, to future proof my basic requirement for shelter.

RockingMyFiftiesNot · 02/05/2021 11:01

In my mind, it is debt because you haven't been able to buy it outright so you've effectively taken out a loan. I always described our mortgage as our only debt and the only loan I was prepared to take out. Appreciate that's just my view.

Taking steps to pay off your mortgage early and being mortgage free is so liberating further down the line. But depends on how much spare you have - you have to enjoy your life too so it's a balancing act.

LynetteScavo · 03/05/2021 15:32

@Spiderplants 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

You can insure against failing to be able to pay the mortgage due to long term ill health- I know we pay quite a lot in personal insurance but it helps me sleep better at night.

LaBellina · 03/05/2021 15:35

Definitely a debt.
One that can totally ruin your financial situation/ life even if you don’t pay it!
It’s not just a bill!

Good for you trying to pay it off ASAP.
If I only had the money to pay off one ‘bill’ for the month it would definitely be the mortgage.

SuperLoudPoppingAction · 03/05/2021 15:58

Council tax intimidates me too.
And the nice thing about overpaying (with my mortgage anyway) is you can have a mortgage holiday if you need to. Not that I would love undoing all my good over-paying work! But it's an option.