To wonder if having a mortgage is worth it?

[malificent7]

If for example you have to scrimp and save for a deposit first...then earn enough for the monthly deposit.
It may mean giving up pleasures and treats in life such as nice food or a social life.
Also it means that many will stay in jobs they hate for fear of loosing a house.

I am aiming for a mortgage but has anyone decided not to get one in order to have a better quality of life. ( mad though that sponds.) I know that dp will gave virtually nowt left for treats if we got one which is going to be hard for 25 years.

Buy a house in a cheaper area if possible or a smaller one. When you look at the figures a mortgage payment will be high initially as part of your expenditure but will decrease as time progresses due to salary rises and increments giving you more monthly money and also due to inflation reduce the value of the payment in real terms. Hopefully your property will increase in value over the duration so you will have equity and eventually own it. You can reduce the term considerably ( by up to 8 years) if you are able to make an extra monthly payment which perhaps becomes more feasible as your salary increases.
Renting on the other hand does allow you not to worry about maintenance etc. but will always be affected by inflation so will rise overtime and maybe disproportionately if demand outstrips supply. You will obviously have to always pay rent for life whereas only 25-30 years for the mortgage so retirement is easier. You also have no security on a rented house as it can ba sold with sufficient notice.
It's not easy at the start of a mortgage as payments are a high proportion of you outgoings but it does get easier.
Personally I'd go for a mortgage as go without the "treats", not really necessary as adults if you can see the big picture of living mortgage free in your twilight years.

Most definitely worth it. I prioritised home ownership over everything else and worked two job to save for the deposit. I wanted a stable base for me and any children that came along so that we didn’t have to frequently move like I did when I was a child. Nowhere ever felt like home.

Very much worth it, the DC have grown up in one house, we can both afford the mortgage singly should a job loss occur etc and we won’t be worrying about rent in retirement.

🧟‍♀️ Zombie 🧟‍♂️

You don't necessarily have to buy now though.
We have been trying to save for a mortgage but we need a 4 bedroomed house at the moment and we live in an expensive area.

However in twenty years or so we will only need a small 1 or 2 bedroom.
It will cost us 350k for a house but if we save our money and then buy when the kids have left home then we may be able to buy outright through saving and taking a lump sum from pension. We could get a small house flat for 150k.

It's all swings and roundabouts.

Monthly mortgage payments are usually cheaper than rent though, for the majority of people. Saving for the deposit is the only hard bit where you have to do without and really scrimp. I'm saving about £600 a month on average and renting at the same time (saving more now I'm on lockdown), but I really do without, never buy any new clothes, never eat out, a trip to the cinema or theatre is a once every 6 months affair

Personally I think it worth it, the thought of it being paid off and no rent in retirement, having a house to own that we can sell and downsize to is a nice thought.

Once your deposit is done, people are in a better position. Treat wise, I’ve found as each year passes I’m less bothered about treats then I used to be! I spend more on nice house stuff then anything else, and if anyone does need to cut back to save it’s well worth it! I enjoy my money going on nice things in the house I can see everyday rather than say, a top, that I might wear really infrequently.

Good luck to all the savers and buyers!

My rent is 665 a month. Did the morthage calculator and i would pay over 1000 a month. More like 1400 a month. Am i doing something wrong?

There's something very unusual going on with those figures. As countless posters have said, rents must generally be higher than mortgage interest, otherwise there wouldn't be any landlords.

The maths is not hard.

People who buy property, even with a mortgage, generally end up better off.

1. rents increase, often by more than inflation. By 15 years into a mortgage the compounding effect of this can mean the monthly mortgage payment is much much cheaper than equivalent rent. .

2. the government tends to protect property values. This benefits homeowners.

Well for us mortgage is cheaper than rent. We are also paying toward an asset that we will own outright at retirement age, which is significant as it functions a bit like savings. Finally, owning our own home brings a lot of stability and peace of mind. We will never be forced to move if we don't want to leave, which is important for us as a young family with school aged children. We can make improvements as we like. We can make sure to maintain the property so that we don't end up living with damp or broken appliances that a landlord can't be bothered to fix. We aren't worried about breaking something and losing a deposit. Those are all quality of life factors.

I agree, however, that as a purely economic decision, owning is not for everyone. There are some good arguments to be made that investing the deposit/mortgage funds in high return investment funds over the same term as a mortgage will actually yield better returns in the long term, particularly when considering the total cost of maintaining a property. There is freedom to downsize without the fear of losing your shirt if times get tough and the market crashes. If you are renting and can't pay, you just get kicked out. If you have bought and can't pay, you lose everything you've invested over the years.

I think the question of renting vs buying ultimately comes down to a question of what you need to get out of your housing situation. Personally, I do not think that personal housing should be seen as an investment. It can work like an investment if the market works in your favour, but that is not always a guarantee. Housing is a basic need, and I think how you choose to house yourself comes down to values and priorities. If you need stability and the freedom to do what you want to a property that comes with ownership, buying is probably a better bet. If freedom from responsibility is a higher value, renting (and investing would-be deposit and maintenance money, NOT spending it all on holidays) may be a better bet.

If you're moving around a lot and not sure where you want to settle I'd say renting makes sense. But in the long run probably not.

I have a question though; if you're retired and your pension is too low to pay rent what happens then? Can you claim housing benefit?

Yes they can claim housing benefit but only up to a certain amount and savings plus pension will be taken into account

@dayslikethese1 yes you can. There’s pros and cons to both.
I have looked after Many wealthy people who had excellent careers and they ended up in a nursing home.... and they had to sell their house to fund the care. Many elderly become ill or will need careers and they would have to fund this themselves. I don’t think a lot of people are this side unless it has happened in their own immediate family.

Mortgage payments are often cheaper than paying rent. Also you eventually pay of a mortgage. You carry on paying rent for ever.

Hi I got mine at 19. I'm now 31. I had help for my deposit. (£9000 and I put in £2000)
Me and my partner paid for all our furniture, kitchen stuff and bedding. Including standard things like ironing board, airer, lamps and curtains. We split two years later. I was able to keep the house by myself and now I'm 8 years into my new relationship. We have children.

For the first 4 years I paid £695 a month and then it dropped down to £495 and now I pay £417 a month.

My friends who are renting pay at least £200 a month more than me. They can't do home improvements and they get kicked out when the landlords decide to sell. I've seen family and friends with mould, broken taps, boiler problems and allsorts on rented houses. I have some friends with mortgages too.

I hope my kids buy a house when they are grown up. It's yours as long as you pay for it.