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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask about life with no rent or mortgage....

213 replies

broadstairs14 · 10/12/2018 18:06

I'm in the fortunate position of being a "homeowner". If I look a little more closely, the bank owns much more of my home than we do. DH and I have had a lot of discussions recently about trying to get our mortgage paid off early and being mortgage free really appeals.

I know two people in real life who inherited/ were gifted money at a young age and owning a house outright seems to have given them a huge amount of freedom and choice.

If you are mortgage free and still on the youngish side, how does this affect your life? Is it worth making sacrifices in other areas and really pushing for this? I'm looking for some inspiration to spur me on but also worry that I might be building it up and maybe it doesn't have such a huge impact all of the time.

OP posts:
Tiredand · 11/12/2018 20:40

Can recommend the Mr. MoneyMustache blog too, a bit OTT but the concept is close to what we've done, never upsized our lifestyle too much and just used pay rises to cover debts and the occasional blowout not increasing regular costs.

Tiredand · 11/12/2018 20:42

Can't edit, so by "cover debts" mean overpay the mortgage, never had any finance that wasn't interest free. As others say, look at how much you pay in interest on a 25 yr mortgage and it will scare you.

malloo · 11/12/2018 20:47

@Ariela agree, and I'm a big fan of MSE! Already got all the bills nailed down to the minimum, shop in Lidl, do mostly free stuff with kids etc but still not much left. Not complaining, we're lucky to manage fine and have no debt apart from mortgage. I guess it's just the value you put on the present day to day vs the future day to day!

busyhonestchildcarer · 11/12/2018 20:48

I am 51,mortgage free and live in a lovely french house with a pool.We made money on our house in the UK then by selling that were able to buy what we have now and retire on hubbys work pension.We dont owe money to anyone and its great.Only thing is to understand when retiring Early is the pot of money you have has to last as there is no more money coming in.

AhhhhThatsBass · 11/12/2018 20:52

I’ll be mortgage free in about 5 years. I’m looking forward to that day. I imagine I’ll feel much more secure. We have an expensive lifestyle including a large mortgage and the expression “you don’t own your house, rather, your house owns you”, is one that I’m reminded of constantly.

vintagesewingmachine · 11/12/2018 21:03

Paying off our mortgage allowed me to go part time at 42 which is just bliss as full time all but burned me out. We would like a bigger house with a bigger garden but I am never going back to a mortgage again. We don't owe anything to anyone and we like it that way.

rededucator · 11/12/2018 21:06

I’ve been mortgage free from 31. The biggest benefit I see is that if I wanted to I could leave my job and become a FTM if I decided I wanted to and still live a very comfortable lifestyle.

Botanica · 11/12/2018 21:07

Good point made about overpayments building up a buffer.

I've done this and have built up enough to have a five year payment holiday which is a great feeling, knowing it's there if you need it.

I'm taking a sabbatical for a year and will be without the bulk of my income (will only have buy to let rents coming in, no salary), so great to know I don't need to cover the same level of monthly outgoings.

Providing yourself with some freedom and choice is a wonderful thing.

For those overwhelmed by the thought of paying off early, perhaps aim to reach six months or one year payment holiday? Even if you don't ever use it, it'd be good to know you've got it on hand just in case.

Stumpted88 · 11/12/2018 21:47

I think it’s the same as when I stopped paying a grand a moth childcare when DS went to school, I felt filthy rich.

But found a way to spend the extra money, got naice cars, took actual holidays, a few of them and started to actually buy things for my self that wasn’t from primark.

I don’t feel any different from when I was skint form childcare bills as I do now, but can’t deny that in the last couple of years I haven’t been to some amazing places and it’s nice not to worry about money.

AmICrazyorWhat2 · 11/12/2018 21:49

For me it's about a) recognising that a posh house wouldn't make us happier than having lots of spare cash would - the happiness return on a big house just doesn't seem worth it. We'd get used to it and it'd not feel any different to living here.

This is our mindset too- some people love the idea of having a big house, some like us aren't that bothered.

DD, OTOH, occasionally complains that some of her friends have larger, detached houses - but they don't get to travel as much as she does. DH and I love travelling, going out, etc. so we'd rather live in an old terrace (that we've done up pretty well) and do that.
DD can always buy her own mansion in the future. Grin

manicmij · 12/12/2018 00:39

Personal choice on paying off early or not. Some lenders have charges for the loss of interest so check penalties out. Given the lasting very low interest rates a mortgage is really cheap money in comparison to other loans eg car. May not be the best idea to pay off but it will probably give lot of comfort.

TheFairyAstronaut · 12/12/2018 00:44

We could do this as we’ve got a bit 200k in equity but DH doesn’t want to live in a more modest house.

It’s stressing me out to the point that I’m seriously considering what a bit over £100k could get single me outright. Short answer locally is a one or two bed Victorian flat in ok nick in an ok location.

festivedogbone · 12/12/2018 07:41

AmICrazyorWhat2 My son is the same, moans that our house is too small. But he loves going on holiday (we only do UK based stuff at the moment but we have at least a weekend away every two months and two "proper" holidays a year).

tryingtosortmylifeout · 12/12/2018 07:49

I’m striving for 60% LTV in the next four years - I’m thinking to reach that milestone will be a great feeling (I’ve previously been at 90%). Making your very last mortgage payment must be a fantastic feeling, but I’m only in my 30s and can’t afford to overpay, so there’s not much point wishing my life away.

Penguinsetpandas · 12/12/2018 08:15

My DS also complains house is too small but loves going on 3 holidays abroad a year. Lucky he's planning on being a YouTube millionaire shortly so won't have this dilemma Grin

Xenia · 12/12/2018 08:20

Someone mentioned a penalty about which is a good point. On paying off early when I gave my older children a bit of money to pay some off (not all off) early in the last few years we did 10% as there was no penalty for that - so eg I made a payment in one December of that year to a lender of 10%, then in the January 10% and then we took the hit on the penalty in the February but it was less of a penalty than had it all been paid as one sum in one (annual in that case) year.

As I said above we paid our off and I just was sure I wanted a big house rather than a lot of other things so after being mortgage free at 356 knowing I would work another 30 years at least and earn a fair bit we bought this house which I remain very pleased with (and is now mortgage free). Those of us with choices to buy (many people never had and never will - my family down the mines, working in fields etc would not have had much chance to buy in their history) just need to decide what suits us best and we certainly had years when we had no savings, only just covering full time childcare costs and negative equity so no chance of over payments.

blueshoes · 12/12/2018 08:47

My PIL were mortgage-free relatively early in their adult lives and spent the money on cars and holidays instead. They have now downsized to a dinky house when, living in the outskirts of London, they could have have enjoyed massive capital appreciation over decades and their financial situation many multiples better.

It is risky and a hard slog but there is fiscal discipline in paying into a mortgage and upsizing when you can. We paid off our mortgage 7 years ago and promptly took out a mortgage double the initial one which we will again pay off in 5 years with consistent overpayments, just in time for when the dcs start university. Once they start uni, the plan is to buy flats for them, if we choose, and pay the mortgages on those ...

DoubleHelix79 · 12/12/2018 10:16

We are almost 40 (same age) and have a mortgage free flat in London in which we live and another mortgage free ex-council house in the south east which we rent out.

We were able to pay them off through a combination of choosing a mortgage far below what the bank would have lent us, consistently overpaying and having a few windfalls (small inheritance, company shares maturing).

Neither property is particularly flashy and I wouldn't mind a bit more space but it's great to have minimal outgoings. It meant that I could quit my job a few weeks ago without having another lined up. I can search for something I really like, knowing that we are ok financially.

Applepudding2018 · 12/12/2018 13:40

We are mortgage free, but mid fifties having paid off 25 year term so that's not what you were really asking! Any extra money we have will go into pensions, although tbf as DH originally bought our house in 1992 for £40,000 our monthly payments weren't exactly huge!

What I will say is that our house is very modest and given the choice years ago of upsizing to somewhere bigger / posher we decided to stick with our small house so I could work part time but we still had some spare cash for the odd meal out, holiday etc.

AmICrazyorWhat2 · 12/12/2018 14:45

My PIL were mortgage-free relatively early in their adult lives and spent the money on cars and holidays instead. They have now downsized to a dinky house when, living in the outskirts of London, they could have have enjoyed massive capital appreciation over decades and their financial situation many multiples better.

Ugh, that wasn't a great outcome for them. How did they miss out on the appreciation, though, if their first house was mortgage-free? Surely they made a packet when they sold it?

I can definitely understand paying off a mortgage and hanging onto a property if it's in a desirable area like Greater London. We live in a small city with a high crime rate and housing prices have barely moved in the last decade. Our house isn't going to be our pension plan!

mindermum1 · 12/12/2018 16:20

I spent about 5 years actively overpaying the mortgage. I worked extra hours at nights and weekends, and that money went straight to overpaying. Also at the end of the month any money left over was paid in even if it was £4. I took about 5 years off the term of the mortgage. I think it was well worth it as we are now in the position to guarantee our daughter's mortgage for her flat.

Sweetpea55 · 12/12/2018 17:06

Eight more payments and we will be mortgage free.
We are going to squirell away the equivalent amount into a higher interest account.

threatmatrix · 12/12/2018 20:13

I always overpaid my mortgage and every time it it went down I added the saving to it.
I am 53 and mortgage free. I have extra holidays or better holidays, I don’t understand people who are telling you not to do it. It’s a no brainier.

TiddleTaddleTat · 12/12/2018 20:19

I think that some believe it's better to overstretch when you're able to as you will benefit from the capital appreciation as the house rises in value. It assumes house prices always go up! Which they have historically done over the long term but in real life we need to sell/buy according to personal circumstances (relocation / new baby etc) and therefore it is risky to use the house you live in as your main asset.
When we are (hopefully) rent and mortgage free I hope I will be disciplined enough to put a fair amount of the equivalent I would be paying into savings (probably stocks/shares). This way you are benefiting from long term investment as well as having the peace of mind that your house will not be repossessed if, god forbid, something terrible happens. For me, the security of that would be priceless and so beneficial for my wellbeing. It's not about having cash for holidays so much as the freedom and flexibility to live without being enslaved to a mortgage

shonashmoo · 12/12/2018 22:53

We're in our early 40s and mortgage free. My Husband bought the house 20 years ago when houses cost less so we were able to pay off the mortgage last year. We don't have any credit cards or owe anyone anything. It brings a tremendous sense of calm that nothing (material wise) can be taken away and we can enjoy our time with our young children. If anything happened to our jobs it wouldn't be the end of the world which is a fortunate position to be in.