High mortgage, high equity

[Weekendawayer]

Havjng a Friday night debate (fun)

does anyone have a higher mortgage but feel fairly relaxed as have high equity? This is my friend who is relaxed as takes view when kids fly near, will downgrade house so doesn’t mind spending as much on mortgage as never going to own outright.

im saying would be worried about house price crash and general view is always to pay off mortgage.

any thoughts?

I have high equity 76% but also a high mortgage £240k. But I'm not relying on downsizing as we are in our 40s and overpaying.

I do feel a bit guilty about not moving somewhere smaller and cheaper but I love our house and location and we are very settled in our community so I guess we'll keep paying off.

Didn’t think about the guilt angle. More just praotically, she is confident of downsize so therefore not fussed re mortgage as equity so high will cover.

Does anyone else have same view - it high mortgage, high equity, when sell will probs get. Small Profit so that with equity means nice smaller house but in teenage years, dc get the bigger, better house.

We are around 50% equity. I think yes, I like having a big house with enough space for everyone but if it all goes wrong then we have options. We would have the same wiggle room in the budget if we had stayed in our old house and overpaid the mortgage but we'd all be on top of each other and life would be way more stressful.

Hmm

But you don't know if the house will hold its value or hold its value in relation to the houses / areas you might want to move to.

My sister bought a house in Surrey for the same price as my London home. Hers has gone up by £400k, mine by £200k. We bought at the same
time.

And everything you pay into your mortgage could be going into pension / investments.

But anyway there's more to property choice than investment isn't there.

My response was to @Weekendawayer

The higher the equity the more of a loss you can tolerate before you make a loss from the sale, solely in cash terms. Obviously if it was an expensive house, say, a 30% loss on 800K less the amount owed will leave you more than an equivalent loss on a cheaper house. In which case you might end up going into rental because you cannot buy anything with such a small deposit/don't earn enough.
However unless you sell for more than you paid technically speaking you're not making a profit.
It's worthwhile though if your only other option is renting where you pay a landlord and have nothing to show for it.

I think this is called renting from the bank. Interest only mortgage, 60% equity = big house. Downsize once kids have gone. Mainly a thing in London and kind of made sense when interest rates were low.

we did this. Thankfully we have a long fixed rate.