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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Mortgage free forever before I turn 30?

76 replies

Newname10000 · 01/09/2019 15:50

Me and my bf have been together 4 years - I am currently 23 he is 26. We are planning on buying our own home in the next year. We have a very substantial deposit between us and the plan is then to aggressively pay down the remaining mortgage, then save for a (potential) future move so we don't have a mortgage again.

Has anyone done this/had experience of this I can't think of any cons but then again it was my idea...

By the date we plan to start looking we will have £120k deposit and should be in the position to be paying £20k per year off the mortgage (including the standard payments.)

OP posts:
whymewhynow · 01/09/2019 16:47

I hate to be the voice of doom but please make sure that you get a proper legal agreement set out about who owns what share of the house when you buy with your boyfriend and what happens if you split up/one of you dies. You are very young and this is likely to be far more relevant to you and your future financial security that how quickly the money is paid off.

TonTonMacoute · 01/09/2019 16:47

Actually having a small, manageable mortgage is a good thing from the point of view of your credit score. We were advised to keep small mortgage going for this very reason, even though we could have paid it off.

Abouttimemum · 01/09/2019 16:51

Having no mortgage has never negatively affected our credit score. As long as you have a credit card that you pay off in full each month and pay your bills on time your credit score is just fine.

blueluce85 · 01/09/2019 16:51

Kind of a weird post for aibu though, unless a stealth boast?!

Janus · 01/09/2019 16:55

If you don’t mind me asking (and totally off topic!) could I ask roughly what job you/partner do? Have 4 children and one is 16, done well in exams, just about to start A Levels but doesn’t know what to do in life! Thought I’d ask what you do as may be of interest to her!

What8Surpr1se8 · 01/09/2019 16:56

I've been mortgage free more than once

You don't know what the future holds
Life throws random things at you !

If you have such a big deposit, why aren't you buying now ?

Read up about the legal differences between being single or married or civil partnership if you are buying together.

Life is too short. You need to have a balance of work & play, not all work, work, work

Original poster
Newname10000 · 01/09/2019 16:57

The (a little bit 'back of a fag packet') plan for 'fun/holiday/experiences' is that we both would be left with £100 per week to just spend on whatever (meals out, drinks, shopping etc) and then an additional £3000 each as a holiday fund.

We are almost on our way to completing Europe and did Australia and New Zealand last year - currently planning to go on Safari.

Obviously if we were unhappy wanted to change the plan we aren't planning on getting a short term mortgage just over paying a 25 year mortgage so would be able to control at whim.

OP posts:
MaterMetella · 01/09/2019 16:59

What's the ultimate objective? To retire early? Or is it the desire to have the mortgage paid off early and then have more disposable income?

Just that if it is the latter then it's essentially a choice between having your disposable income more evenly spread over the years (and having opportunities and experiences as others have outlined) or a 'jam tomorrow' outlook where you save hard and deny yourself but then have a greater disposable income later. But there's always a risk that that things don't pan out the way you think they will and you never get to take that trip...

Also, isn't a potential downside with the desire to be mortgage free (if we're looking for one :)) that you don't climb the property ladder? If you have a £120k deposit and are paying £20k for 6 years you'll be in a house worth around £250k. Many people trade up as their income grows so that they (a) have a bigger house/nicer area to live in and (b) because generally - and subject to what property prices are doing - when prices increase by x% over n number of years you'll make more if it was worth more to begin with.

If it's the desire to retire early then you might want to read an article in the FT this week about 'FIRE' devotees (financial independence, retire early ).

Good luck either way! :)

Legomadx2 · 01/09/2019 17:00

What is 'completing Europe'?

Original poster
Newname10000 · 01/09/2019 17:05

@Janus I work in finance, but have started specialise in prudential risk. My bf is an Aerospace Engineer.

I don't know if this kind of thing might be a helpful comment or not, but I got good grades but wasn't in the financial position to go to Uni so went into a big company to train as an accountant and ended up also taking a business degree (they funded) weirdly ended up being an accountant before I was a graduate and was hard work but was earning and have no student loans :) and I know there is currently a big drive/a lot of funding for large companies to increase the number of young people they're taking on so definitely worth looking at :)

OP posts:
Original poster
Newname10000 · 01/09/2019 17:06

@Legomadx2 Sorry just something I say - just meaning having been to every country - obviously haven't seen everything in each country but have visited :)

OP posts:
Original poster
Newname10000 · 01/09/2019 17:10

@MaterMetella Good q, I just like the security of it (something I lacked when I was a kid).

Obviously wouldn't say no mortgage ever again, when we moved into something new would either hopefully of saved some more or take out another mortgage and pay it down depending on circumstances as and when.

OP posts:
ichifanny · 01/09/2019 17:10

Is there not a cap to how much you can overpay each year ?

SoyDora · 01/09/2019 17:11

Sounds like a fairly sound plan, as I’m sure you’re aware.
Not something I would have liked to do, we spent our 20’s enjoying ourselves and didn’t buy a house until early 30’s as we lived abroad (4 different countries) and had no idea where we wanted to settle. If you’re happy to settle down earlier then it’s a fine plan.

Ilikethisone · 01/09/2019 17:16

I think it depends. Me and exh did the same.

We divorced and so I was able to by my own smaller property outright, with the equity. I have a small mortgage and in no rush to pay off. I could over pay by about £500 per month.

But now I think I am in no rush. I wonr be moving, dont need a load of money just sat in property and invested elsewhere to increase general wealth.

My aim is to retire early. I dont want all my money tied up in a house.

BarbaraofSeville · 01/09/2019 17:17

Sounds like you're in the fortunate position of earning well but living in an area where house prices are quite affordable, which makes your plan infinitely more achievable than if you lived in a more expensive area, or your wages were more in line with local house prices as in both situations, you'd have far less disposable income to pay off your mortgage.

Well done for not falling into the trap of not spending all your spare money on things like flash cars, lots of eating out and socialising or holidays which are a great way risking future financial security for the sake of today's lifestyle.

nokidshere · 01/09/2019 17:20

Is there not a cap to how much you can overpay each year

If you are on a deal it's usually a maximum of 10% but if you are paying your lenders normal standard variable rate you should be able to pay off anything

Pinkcat231 · 01/09/2019 17:20

Have you checked the early repayment charges if you’re getting a fixed rate mortgage? Other than that, go for it!

BarbaraofSeville · 01/09/2019 17:20

Is there not a cap to how much you can overpay each year

Depends on your mortgage, sometimes yes, sometimes no. As the OP is planning to overpay, this is something she needs to consider. However, as already mentioned, in these times of low interest rates, you could quite well earn more interest and growth elsewhere.

My mortgage allows unlimited overpayments, but as I earn more interest by just leaving spare money in my current account, I'm not rushing to overpay.

Waveysnail · 01/09/2019 17:23

Fine as long as you have savings - ideally 6 months each of your wage. I would build this savings first then pay off.

NotSuchASmugMarriedNow1 · 01/09/2019 17:25

YANBU - This is becoming a thing now I've noticed with 20 and 30 somethings. The FIRE (financial independence retire early) movement is massive in the states and fast moving over hear.

Good luck to you.

What8Surpr1se8 · 01/09/2019 17:27

From experience, even if you are mortgage free, there are still living expenses to pay like utility bills etc
It depends what sort of lifestyle you want to have. Perhaps you would like extra money to visit family & friends, hobbies, celebrate birthdays & other occasions. You could work part time or start a family

You won't be able to access your private or state pensions until you are older

Another suggestion, buy in the best location that you can. Look at the police crime stats via postcode.
Location, location, location

You are in a very fortunate position

Jazzybeats · 01/09/2019 17:32

There’s a great forum on money saving expert called mortgage free wannabe. Lots of people trying to do something similar.

Sedlescombe · 01/09/2019 17:41

If you are in a position to pay the mortgage off so quickly you will save loads of money in interest. You need to balance that with actually living life..travelling and doing stuff together. Is it really necessary to pay it off so aggressively? Dont forget to have fun together too.

Original poster
Newname10000 · 01/09/2019 17:56

Will look into T&C's for overpayment.

In terms of area already decided - its low crime, Ofstead outstanding state schools and generally affluent.

Obviously still planning on living while young but not to the detriment of working forever/worrying about money. Saying that I don't have a desire to retire at 35 as I love my job but don't know what the future holds from career/family/economy perspective.

OP posts: