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.

This is the original recording. Get your facts right listen to lyrics which are appropriate today for those missing their families during lockdown.

Sorrywrong thread!

Our DMIL had to move into a care home last week. She lived in a flat her father rented in 1926. It was sad work to empty a flat that had been home to 3 generations.

Her pension paid for the rent these last 30 years with lots of money to spare. Now her pension pays for her contribution to the care home and nothing more.

(Not UK.)

LuminousAmber
The 125% loans were scandalous and should never have been allowed. You never really owned the house at all. You rented more money than was required to buy a house possibly spurred on by what seemed like secure future gains and signed on the dotted line. I’m glad you’re sorted out now as it could have been so much worse for you.

Renting is not all bad.
I don’t have to worry about expensive maintenance. Last house needed a new roof and had serious wall cracks which cost a fortune. My newer house needs replacement central heating boiler and I don’t need to worry if there’s a storm/flood, a tree comes down or if the gutters are broken. If a white goods item breaks I get a new one within days. I only pay contents insurance and if I don’t like the neighbours I can move.

I would like to have the security of ownership but the way my life has turned out if I’d have bought a house I’d have lost it via divorce and greedy ex. I am a bit of a nomad and even if I had the money I wouldn’t buy a house as I can’t commit to living anywhere for too long.

We made this choice. We are now living in a secure and cheap (for its size) property. We aren’t responsible for repairs, we can leave whenever we want with little notice, we were able to put out capital into the business to generate more wealth rather than letting it languish, we have more money each month to invest/spend on things we want if need. I wouldn’t buy on a mortgage unless I was buying to let out at a substantial profit, it was cheaper than renting or, there were no suitable rentals avoidable.

Yes it’s worth it. I’m 43 and now mortgage free. It’s a fantastic feeling

@Mummyoflittledragon it depends on where you live. Our area is highly desirable middle class type place with a large rental stock owned by the local nobility. People are obsessed with buying a house here because they’re worried that they won’t be able to afford one in x years if they don’t get on the ladder. Obviously once they’re on the ladder they want their house value to grow as quickly as possible so vehemently oppose any new development. The result is that the houses available for sale are hugely inflated in price. We’d be paying two to three times our rent on a mortgage (we’d also have to pay a lot for maintaining the property which would be expensive too).

Regina
Your experience is exactly what I’m saying. Albeit further along the scale. And just wow at 3 times the rental value! To buy the 270k house in my example, many lenders are now insisting on a deposit of at least 40% now. So of course if someone has a deposit if 108k, the mortgage payments at face value are going to be less, especially with the initial very low rates around. And even less because they don’t cover a lot of the on costs for the ll.

If I take this example and put a lifetime rate of 3.2%, the 162k mortgage works out at £794 pcm. It looks more attractive. But the 1.5k extra a year doesn’t go a long way when you need to fix everything yourself especially on an older property (I imagine you’re talking about listed buildings here) and have had to save up over 100k to buy it in the first place. Rent will obviously go up at some stage. But mortgages could go up as well. I remember thinking is never buy a property as a teen when rates were in double figures. My first purchase was over 7% apr. No Fixed term reduced rates either.

I can therefore see why you’d want to continue to rent. Can you not buy further away?

Our mortgage is cheaper than rent so it's worth it for us.

It’s the long game though, isn’t it. We’ve had a mortgage for 17 years now. Things were very different when we first bought but it wasn’t easy - and we’ve extended the mortgage several times to move house so we’ve still got 20 years left on it. But we now pay significantly less on a mortgage than we would on rent if a similar properly.
I’m glad we got a mortgage when we did. We’ve been able to remortgage to get a lower rate etc, we’ve got significant equity in the property now, and if things go tits up we can downsize and release a sizeable chunk.
We were lucky to be able to buy when we did - our first flat was £120k with a 95% mortgage so we were able to save the deposit easily as DINKY. I know it’s significantly harder now.

We have a mortgage - nearly paid off now, one year to go, but I will say that owning a property means you have to do the upkeep and fix anything that goes wrong, and that can cost a lot depending on the age of the property. We've had to spend a LOT. If we were renting that wouldn't have happened.

On the plus side, we can do whatever we like and there's no threat of getting the eviction notice and having to move. We'd rented various properties for about 13 years so it was a relief to buy somewhere and settle!

Our mortgage payments are less than our rental costs. We don’t scrimp one anything. I suppose it depends where you’re buying and what your mortgage rates are.

I rent. Every single friend/colleague who has a mortgage pays less per month than I do. However, I can’t afford a deposit at this stage in my life, so I’m stuck.

Yes it’s worth it in the end, I was very frugal when I first got on the property ladder, had a p/t evening job in addition to my full time job, never went on holiday etc ... my salary increased, I married (my DH also had his own home) so we bought jointly together and have since moved twice - to different areas to take advantage of different property prices, paid off our mortgage in our 40s. So glad in the current situation that we own our own house, when we retire we can downsize & not have to worry about finding rent. And we will help our DS get on the property ladder (having just one child was also a deliberate decision).

Those few years of being really frugal were definitely worth it.

I grew up in a council house. I have my parents' rent books from 1969 when they first moved into a council house, until 2014 when my mum died. They could have afforded to buy a house but had not the confidence to take on the debt. No one in their family had owned a house. They rented privately from when they married in 1962 to 1969. then all the years of council rent. 52 years of paying rent every week- always on time, never missed. They could have had a mortgage for 25 years, paid off and paid nothing for the last 27 and owned a house worth a couple of hundred thousand.

DH and I both had a property when we met, we sold them and bought our first house with the profits of those, had a small mortgage and paid that off quite quickly. We bought a much bigger house using some inheritance and the profits from our first house (bought for 220,000, sold for 390,000). We paid £480,000 for this house and it has really gone up in value. We now have a house worth about £625,000 and a very small mortgage which we will have paid off in a couple of years. We are 40 so hopefully will have many years rent/mortgage free which will allow us to have nice holidays, save for the children to have a deposit each or go to university or whatever they want to do, and towards us having financial security when we are older.

We were lucky to each have a property that had increased in value when we met and to have a small inheritance each, and that the two houses we have bough together have increased substantially. We live in the north-east so housing is more affordable. We always over-paid the mortgage so it reduced faster.

Definitely worth it. More than anything because of the feeling of security having a house you own gives you - me anyway.

Depends on your age and situation. In my 20s I was single and moved a lot so I had no desire to buy a property. I lived in 8 different places and I don't consider rent to be a waste of money - having no commitment gave me the chance to travel, live in beautiful places and gain work experience. I then met my DP and bought a house together at 32. Financially of course I'd have been better off buying a house aged 25 or whatever, but I lived the life I wanted and I feel lucky, no regrets. It suits us to have a mortgage now as we are married with dc and we are settled in stable jobs. It is worth it especially as you get older but it's not the be all and end all.

Of course it is worth it

Look at it this way, rent v mortgage you can pay say £1200 into a landlords bank account paying HIS mortgage every month and you'll never see it again and have NOTHING to show for it. Or pay your own and at the end still have all that money but in the form of a house AND you no longer have to pay, you're mortgage free. Renting you'll be paying for the rest of your life! On a pension when you're retired!

What do you do then when you retire?
Horrible situation many people are in sadly
And IMO the no 1 reason you should buy if at all possible

The rent around here for a small house in a nice area is £900 per month. Our mortgage is £400. We only have 10 years left to pay off the mortgage. Mortgage is definitely the winner here. I couldn't afford to rent this house! I've never rented. To me it's dead money.

Zombie

When my parents divorced, my dad got remarried and he and his wife have no mortgage - they rent. He's past retirement age but can't afford to retire and he lives in a state of anxiety about where he will live as he ages. This is not a life I want for myself or my DH. We have a mortgage and we are working hard to overpay and then free up money to save for our children etc.

We didn't need a deposit and our monthly mortgage payment is less than the rent we were paying so definitely worth it for us. Not to mention being rent and mortgage free in retirement.

It is so worth it. The first few years are harder but you just find different ways of having fun. We had an offset mortgage and have been mortgage free from about 40 years old. OK we were both very fortunate to have well paid secure jobs but it is so reassuring knowing we won’t have to find rent for the rest of our lives. It also enabled me to ditch my well paid but incredibly stressful job when I was severely ill with post natal depression. Go for it!

Of course it's worth it. It's like asking "Am I better trying to buy something myself or just pay the same money for something I'll never own"?

Earnings won't stay the same for ever. Renting is risky, far more risky than owning. Renting is ideal for people who want to move around a lot, but not in other circumstances.