Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Do you think your mortgage is a debt

114 replies

HaudYerWheeshtBawbag · 18/05/2018 23:27

I don’t...

I think of it as an investment & not a debt that I would say in terms of a credit card etc...( I/We dot have one)

WDYT?

OP posts:
yoyo1234 · 19/05/2018 14:44

Secured debt.

Onlyoldontheoutside · 19/05/2018 14:47

Secured debt.When you have paid it off you have security.Its not really and investment unless you can sell and downsize.Some of us would be in box if we downsized.

ImNotMeImSomeoneElse · 19/05/2018 14:50

Of course it's a debt. Owing money is now and never will be an investment.

happypoobum · 19/05/2018 14:51

How can you possibly think it isn't a debt? Debt is money you owe. A mortgage is money you owe. Confused

ImNotMeImSomeoneElse · 19/05/2018 14:53

Imagine you already own your house outright, and decide to take out a mortgage on it, which is allowed. You use the money to go on holiday and get drunk.

Still an investment?

If not, then a mortgage is not an investment. A house purchase, however, can be.

DixieFlatline · 19/05/2018 15:06

Imagine you already own your house outright, and decide to take out a mortgage on it, which is allowed. You use the money to go on holiday and get drunk.

Still an investment?

As someone else has said, you need a roof over your head regardless, which costs money. You can either pay rent and never get anything but temporary shelter for it, or you can get a mortgage and build up equity in an asset. You don't need to go on a holiday you can't afford.

user1471426142 · 19/05/2018 15:34

It is debt but I do view it differently to other credit. I’d be feeling very insecure if I was sat or £40k credit cards but seemingly happy to have ten times that in mortgage debt and mortgage payments. That doesn’t stop me wanting to get rid of that though. I don’t think you can have true financial freedom until mortgages are gone because most of us are quite vulnerable to job losses/sickness etc.

bluerunningshoes · 19/05/2018 15:36

I see it as rent.

LeggyLinda · 19/05/2018 15:37

Yes. I would say it’s a debt.
Quite an expensive debt - considering the longevity of it.
However, as it funds a home, it is a very acceptable debt.

sprinklesandsauce · 19/05/2018 15:44

Yes it’s a debt, but if somebody asked me if I had any debt, I would reply , yes £500 on a credit card, not yes, £290K on mortgage.

(Both figures made up)

So yes it is a debt but long term so most people don’t include it in day to day finances.

And yes it is debt to buy an asset, not £40K on credit cards for buying a lifestyle you can’t afford so it is different.

Triskaidekaphilia · 19/05/2018 15:46

I think of it as debt but it's my second lowest priority debt (after my student loan because I do not yet earn enough to pay that off) so it's not one I stay up at night concocting spreadsheets of when I'll ever pay it off.

CuntinuousMingeprovement · 19/05/2018 15:47

Lol at posh rent!

Also, how exactly does prices being below 2007 levels in most areas mean people are in negative equity because of it? There are people in negative equity, of course, but even those buying at peak of market weren't necessarily mortgaging for more than the property is now worth, and will also have had 11 years to pay it back. You could've taken out a 100% mortgage then and still have equity on a property that's dropped in value.

Magpie24 · 19/05/2018 15:48

It is literally a debt

Whatthefoxgoingon · 19/05/2018 15:52

It’s a debt but one taken on for a very significant future gain. Blowing the same amount on a car or a holiday means you’ll have nothing to show for it, as these are consumables.

Whatthefoxgoingon · 19/05/2018 15:53

My mortgage debt made me a lot of money in house price gains, once the debt was paid off. It doesn’t always work out this way true, but it certainly was a debt worth having for me.

SensoryOverlord · 19/05/2018 15:58

Personally I don't consider our mortgage as a debt. It's a housing cost which you have to pay whether that's for 25 years to the bank or forever to the landlord.

ImNotMeImSomeoneElse · 19/05/2018 16:00

DixieFlatline

The house purchase is an investment.

The mortgage is the debt that is usually undertaken in order to buy it. But sometimes a mortgage is undertaken simply to free up cash. Neither is an investment, but I'm using one as an example to demonstrate.

HateIsNotGood · 19/05/2018 16:04

A Debt with Benefits

CountFosco · 19/05/2018 16:11

In 2016, 53% of towns and cities average house prices were below 2007 levels, meaning lots of people still in negative equity.

No, not unless those people were stupid enough to have interest only mortgages. Our house has not increased in value since we bought it 15 years ago. But because we've been paying off the mortgage all that time (cheaper than rent) we have a ton of equity in it, enough to buy a house if we lost our income. That is not the same as having credit card debt for the same amount as we now owe. A secured debt like a mortgage is not the same as unsecured debt and it shows a lack of financial understanding to think it is. Presumably everyone who thinks it's a bad debt are renting until they've saved enough to buy outright? And they won't send their children to university until they've saved enough to pay the fees? Because all debt is BAD BAD BAD Hmm

balsamicbarbara · 19/05/2018 16:20

Owing money is now and never will be an investment.

Not exactly. If you can use borrowed money to make a bigger return than the interest rate on the loan, you've made money. This is why even huge companies with lots of cash often take on a lot of debt too.

CuntinuousMingeprovement · 19/05/2018 16:35

I'm guessing, but given that peak was 2007 for a lot of areas, ie people have had 11 years to pay off the debt, probably a lot of the people in negative equity have MEW'd.

Even if you bought a 90k place for a 100% mortgage 11 years ago, and it's now worth only 70k, to take an example near me, if you've had any kind of repayment mortgage at all you've probably at least cleared enough to not be in negative equity. The thing about places that are cheaper than they were in 2007 is that the prices were still quite low anyway, so a drop of 20% quite often is still well under 20k. We're talking areas where houses peaked at 100k not 500k.

Now if you had IO and/or more than 100%, yeah I can see how you might still owe more than the place is worth.

Looneytune253 · 19/05/2018 16:39

Well yes it IS a debt BUT I don’t see it that way. Dh and I are currently going through the process of a right to buy (15 year term) and we were talking about any profit in years to come. We thought it was lovely that the discount would be a lovely bit of profit (potentially) in 15 years but I pointed out that as we are currently paying rent, in 15 years the whole value of the property will be profit as we would have been paying rent anyway. Make sense?

Looneytune253 · 19/05/2018 16:40

@40isnew50 but if you’re paying rent for absolutely nothing why not pay it into a mortgage and the house is eventually yours. Our mortgage per month is going to be slightly less than our (council) rent.

AnnabelleLecter · 19/05/2018 17:34

It's the only debt I've been happy to take on.
It leads to investing in an large asset which can be your home.
I see a mortgage as more of a savings account, with great long term returns.
Instead of paying off our mortgage and saving the money, we have moved up the ladder which has put us in a much better financial position.

Racecardriver · 19/05/2018 17:37

That is a finacially illiterate statement. It is very much a debt. Sobering has given you money which you must pay back. It is a debt.

Swipe left for the next trending thread