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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Are people who own their own homes or have a mortgage worried about bills?

226 replies

gotelltheoldmandowntheroad · 12/08/2022 08:39

If you have a mortgage or own a house outright, does it usually come along with being okay financially?

Do you all have thousands in the bank? I assume you do because things come up like repairs and services that can be expensive.

So with the energy hikes and other cost of living issues, what happens? Do you know you will have enough to cover the bills? Or are you high earners along with owning?

If you couldn't pay your utility bills would that mean your house would be under threat?

I know nothing about it all as no one in my family has ever had a mortgage.

OP posts:
BaileySharp · 12/08/2022 10:25

We have no meaningful savings. A few hundred tht gets spent! We are managing bills ok and have small amount of wiggle room but I am concerned about rising costs of energy and food. I think we'd only be in danger of losing houe if we couldn't make mortgage repayment, which is a payment we woul prioritsie. Luckily we entered a new 5 year fix a few months ago so our payments won't change

MyNameIsAngelicaSchuyler · 12/08/2022 10:26

I’m not sure I’d feel secure in council housing. I never saw it as an option as my parents and everyone I knew owned their own homes, so the opposite to you.

we bought in 2001 and went ‘up the ladder’ until buying the house we live in now. We bought what we could afford on one salary (had a baby at the time) and have chipped away at it ever since.

three biggest changes for us was adding a a second salary BUT not changing our lifestyle as a result. This meant we have become much more secure over the last decade than in our 20s/ early 30s. So yes, we have savings, a lot of equity and reasonably high monthly incomings.

we can’t do everything we want (Solar, holidays, pay off another chunk of mortgage) BUT we have choices and I am aware of our privilege (combined with financial prudence).

sunsetsandsandybeaches · 12/08/2022 10:27

We have a mortgage but we deliberately bought a cheap house with tiny monthly payments in comparison to our incomes. We also don't have children and don't live an extravagant lifestyle, so we have a decent amount in savings too. We've never struggled for money but mortgage/rent and council tax should ALWAYS be priority bills.

mondaytosunday · 12/08/2022 10:27

I own my home outright, but I have a budget - it's circumstances rather than my own earnings (I'm a widow and both my parents are dead). I have two children, one still in school.
I am not as worried as many - I have a income from investments and they will keep the wolf from the door so to speak. But I am careful - a short break to Europe in a couple weeks is the first holiday we've had in almost three years, domestic or otherwise, as we moved last year and the new house cost a lot to fix up.
But even when my high earning husband was alive and we lived in a big house in an expensive part of town, we had a budget. Few people have it so they don't have to balance the books every month. There were no skiing holidays etc.
It is relative. Most well off people aren't well off because they are careless with money, it's because they are clever with it.
I will be able to pay my bills - I've budgeted for them. That doesn't mean it doesn't affect me - paying for bills means not doing something else. I am fortunate that that other thing is not anything essential.

clopper · 12/08/2022 10:29

Paid off the mortgage so I don’t have to worry about that. However house is old and difficult to keep warm. Not thousands in the bank for us as supporting DC at uni and worrying about their bills too. I do appreciate that I’m in a better position than many. I do wonder how it will be for WFH employees as they will have to heat their own workplace, so money saved by less commuting is going to be eaten up by heating costs.

InChocolateWeTrust · 12/08/2022 10:30

It varies enormously just as it does for renters.

DH and I are on v high incomes, and didnt stretch much to buy our house. We've overpaid and now have a lot of headroom.

My sibling stretched more, and their income took a hit when their DP lost their job and the new one paid a bit less. They are quite tight for cash and are pretty worried about bills but as an extended family there's a lot of money about and we won't let them go to the wall. I have enough to pay their mortgage on top of mine and would do so to keep a roof over their head.

tiger2691 · 12/08/2022 10:31

My wife and I live in a flat, owned outright, however we survive jointly on £1050 net pcm, which was fairly doable pre energy hikes and crazy inflation. Council tax is also insane for band A, approximately £155 pm. I have no idea how a couple live on £525.72 on UC, nor how a couple both under 25 get by on £416.45, that's baked in poverty and destitution, thank you IDS, such a caring man.

BlueJellycat · 12/08/2022 10:32

Asset rich but cash poor here. My mortgage on our five bed house is under £400 PM so it would take the repayments going up over 200% before id be better off being a renter.

What do other people do when they cant pay the rent or Bill's? There a whole host of options there isnt there? From the sensible to catastrophic choices.

Most people factor in likely rises in interest rates especially in the first five years where your equity is low. My equity is high so my options are better but like others I guess I dont just fall into this situation. I took hard work, planning and a few massive gambles of faith. So I'm worried of course but I know as well I can navigate whatever happens as I did to get here today. We have young kids and I'm planning on watching my smart metre like a hawk this winter

LakieLady · 12/08/2022 10:38

I know I'm very fortunate compared to many, but that's mostly because I'm old and my mortgage was paid off about 7 years ago.

When the energy price cap rise was first talked about last June, I committed to a 2-year fix from Nov 21, but at June 21 prices, so I don't have to worry about energy costs yet, but I'm bricking it about how bad things will be when that deal ends.

I'm still working, but only p/t and am low paid (3rd sector, our salaries have fallen in real terms every year since 2007), I have state pension and a small occupational pension. If I was to give up work, I'd really struggle. I wouldn't starve and I would be able to pay most of the bills at the current rate, but there'd be no spare money for replacing any big household items and I'm not sure I'd be able to afford to run a car. I'd be entitled to a bit of help with my council tax, but nothing else.

I will have to downsize, although I'd prefer to move to a cheaper area as I would hate not to have a spare bedroom for guests or a garden. Then I'll have to find something that will give me some extra income from the leftover equity, or just live on it and hope I die before it runs out.

I really feel for families on low-middle incomes, it must be such a source of anxiety. I work in welfare rights so I know how very poor some people are. This government doesn't give a shit about them.

LondonJax · 12/08/2022 10:38

I think it depends how you're renting. If you're in social housing, as you are and like my parents were, then stick with it! As you said, you have to have extreme problems or be a very bad tenant before you can be evicted.

But a friend of mine is in privately rented property - they can't get anything on social housing round here although they are on a waiting list (that is ever growing). Both working, a couple of kids. But they are constantly worried when it comes to the annual renewal of the lease a) because the price could increase and b) because the landlord could decide to sell. Their landlord is now retired - only just so relatively young in the scheme of things. But now their concern is the future. If he dies the house goes to relatives who may decide to sell. Then they'll have to start house hunting. They get repairs done but that's at the behest of the landlord - if the bathroom taps start to leak he may not see a priority over, say, the boiler breaking down so it could take time to get things done.

We own our house so we're not in that situation. But we still had a mortgage to pay and, as you say, we had to do our own repairs. DH was made redundant about four years ago and the mortgage was the priority. It ate up all our savings and the credit cards were maxed out before he got a job so we're now paying back that debt. Mortgage is now finished thankfully so we've got enough to cover the debt and we're trying to get it down fast so we can build a small savings buffer again.

If it happened again? The house would be sold, we can downsize. But we'd probably have to cut the price to get a quick sale if we had mammoth debts I would think.

The good side of private renting and owning is that you can be flexible about where you live to a point. Obviously you have to sell in order to buy if you move to another part of the country - private renting is relatively easier then as you just have to give notice if you're on a rolling tenancy.

I know when my parents wanted to move us because of work in the 1980s they had to find someone who wanted to swap their council house in that area. I think they also went on a council waiting list but that was almost a waste of time.

I assume it's the same now. And that is a headache as you've no idea if anything is available in the area you need to move to - so it's not so flexible.

I assume you can do something via the social housing people in that situation but I imagine it's not as easy as saying 'my job's relocating to Scotland so we need to move from Wales' and just pack up and go. Any long term 'house for life' benefits would change too as it'll be a different housing provider.

My mum moved from her council house to a council flat to be nearer us when dad died and her tenancy changed to a five year renewable one from a 'home for life' one previously. So much more precarious.

So swings and roundabouts. Most people, early on in their mortgage, are pumping money into paying it off in answer to your question. It's only the latter years when the mortgage begins to look smaller compared to money coming in that that changes. And, of course, when you retire, whilst you have a house with no rent/mortgage, you're also less likely to be able to get extra cash if you need it quickly (I can't imagine many of our 80 year old neighbours having huge pensions or be able to get a bit of work if they needed to repair the roof!) But you do have an asset to sell and move into something smaller/somewhere cheaper if you're lucky.

If your DH is desperate to own, why not look at 'right to buy'? I'm not sure if it still exists but if it does it's certainly cheaper than buying on the open market.
My aunt was a council tenant for 10 years or so (I think) and got 30 ish % off as a discount. I think she got it for somewhere around £200K instead of nearly £300K - so a big saving. I presume, though, that you having been in arrears would count against you in that (but also in any mortgage to be honest - they do check).

Daisymaybe60 · 12/08/2022 10:42

We had some hard times when we were paying off our mortgage, we’d to extend it when interest rates were mad, but at the end of the day our small house is now ours and we don’t have to worry about paying rent from our pensions for the rest of our lives, which is massive. When the mortgage ended we had a few working years left to build up a savings cushion against future maintenance bills.

The mortgage was always a priority. If it meant no holiday, no car, it didn’t matter. The roof over our head did.

Richelieu · 12/08/2022 10:43

DH is retired, does a bit of freelance stuff. I still work. We're lucky enough to own our house outright and have some savings. Always been very careful with money and considered ourselves fortunate to be comfortable and much better off than the average. However, I've literally just been totting up my predicted outgoings ahead of the estimated bill increases ahead, and I reckon my entire monthly salary will disappear, with very little indeed left over.

That's quite scary…

EllieQ · 12/08/2022 10:45

Agree with the previous poster about the stability/ risks being different at different stages of life. We have a mortgage, and have had various levels of savings since we bought the house.

We didn’t have any savings when we bought our first home (ten years ago), as we had spent all our savings on the deposit, fees, and moving costs (man with a van). I expect most first-time buyers are in the same situation!

We then started saving again for maternity leave, then those savings were used up, and we had a few years of nursery fees and not much spare money, so lived a frugal lifestyle. Once DD went to school, childcare costs dropped and we could start saving again.

When we bought the house, we didn’t over-stretch ourselves as we were planning to TTC and needed a house that was affordable if I went back part-time.

I have felt frustrated over the years as our house is smaller/ in a cheaper area than friends and school parents, but it is a relief now with prices going up. Our mortgage payments are lower than rent would be, and the small house means our energy bills aren’t too high. Our joint income is £45k, and we feel fairly comfortable (impart because we still live fairly frugally).

We saved more during lockdowns as we weren’t doing anything, but as costs have been increasing recently, there’s less spare money to top up savings. However, I inherited a few thousand from my mum when she died a few years ago, and that is my safety net right now.

Harridan1981 · 12/08/2022 10:47

We have always owned bar 9 months in rented when relocating.

We rarely have any savings, but can afford bill increases. We do have some long term savings but not to be used really

LakieLady · 12/08/2022 10:47

tiger2691 · 12/08/2022 10:31

My wife and I live in a flat, owned outright, however we survive jointly on £1050 net pcm, which was fairly doable pre energy hikes and crazy inflation. Council tax is also insane for band A, approximately £155 pm. I have no idea how a couple live on £525.72 on UC, nor how a couple both under 25 get by on £416.45, that's baked in poverty and destitution, thank you IDS, such a caring man.

Your council tax is really high @tiger2691 ! We pay the 4th highest council tax in the country and Band A here is £1525 pa.

It might be worth doing a check on entitledto.co.uk, you could be entitled to a bit of help with your council tax.

MrsMoastyToasty · 12/08/2022 10:48

A mortgage is given on the basis of your ability to repay. We got ours when we were both in full time employment. Now 20 years later I am unemployed and we also have a dependent child. I was made redundant in June while off sick and am not recovered enough to return to work. Its scary. I'm actually looking for remote work so I can start increasing our income and work from my sofa if needed.

flumposie · 12/08/2022 10:48

Our fixed rate mortgage finishes in November. Just about to sign up for a 5 year fixed rate mortgage that will cost about £50 more than we pay now but it was the best we could find. 7 years in total left to pay. I am extremely worried as just about break even currently. Bulb changed my payments from £68 to £ 157. As a result I am £290 in credit currently. However I can not afford much more.Will be wearing oodies in winter. Priority will always be mortgage, food , bills.

SenoritaNaturista · 12/08/2022 10:49

I’m wondering how older single/widowed/divorced middle aged people will deal with the energy costs. (E.g widowed where you lose your parters income and maybe pension too)….will it result in a shift where single middle aged and older people have to share homes - just as a means of covering their heating bills.

Will the long term effect of this then create a shift in the housing market too…
interesting to see where we are this time next year.

Harridan1981 · 12/08/2022 10:51

I should add that we bought a cheaper house than we could have afforded at the time, and always overpaid ev n if only by a little. We fixed recently at slightly more then previously, and fixed utilities last autumn

ImAvingOops · 12/08/2022 10:56

I would always pay my mortgage first. Re electricity bill I will pay what I can afford. I don't think I'll get cut off so long as I'm making an effort to pay - realistically they can't cut off everyone!
Hone ownership doesn't = rich. My house needs a new bathroom and kitchen but I've waited because I didn't want to borrow extra on the mortgage to finance it. My mum (in a HA house) gets all her stuff paid for by the HA, so her house is nicer than mine even though she technically has less money.
I have adult kids at home and come the winter will have to ask them to contribute to the electric bill. I know they work ft and should contribute really anyway but I've always liked helping them and letting them save their money, since I couldn't give them lots of cash directly. But now I won't be able to afford that.

NotQuiteUsual · 12/08/2022 10:57

Own outright. Have a month's earnings in savings, despite being mortgage free for two years due to poverty hangover. We're really worried because our income isn't very high and any increases will put us to the edge.

ApplesandBunions · 12/08/2022 11:00

Harridan1981 · 12/08/2022 10:51

I should add that we bought a cheaper house than we could have afforded at the time, and always overpaid ev n if only by a little. We fixed recently at slightly more then previously, and fixed utilities last autumn

Yeah same. It was quite a specific and fortunate set of choices that have left us as a middle income family being able to afford the increased energy bills. It would really only have taken one thing to be a bit different for the situation to be much more precarious. I am very worried about the impact on a population level.

ClarksonHammondMay · 12/08/2022 11:01

Mortgage half paid off and will need to downsize and move up north soon. downsizing alone won’t help as we’d be paying the same but for a much smaller house. We need to free up some money to help DS through university.
Can’t wait, if I’m honest. I love everything about the north. But I’m frightened of the actual moving.
I see paying off the mortgage as an investment… but, if my DH and/or I need a care home when we’re older then it’s all for nothing. That is the most stressful thought for me.

BlossomsOnATree · 12/08/2022 11:01

I’ve got a mortgage and also quite a lot of equity in my flat. I do have some savings as a buffer for emergencies (as I’m self employed) which I saved from proceeds from selling the house when I separated from ex, but they have been eaten away over the years of bringing up kids, things that needed fixing etc. and I’m worried about being able to afford the cost of living without using the remainder up, so I’m cutting back on costs everywhere I can. I’m on a fix but of course will end up paying more when it ends. I’m very glad I was cautious when buying, stuck to a budget and didn’t max out what I could afford. There are things I don’t like about the flat and we could definitely use more space, but there are pros too and I do appreciate it.

I do feel very lucky because my flat is a safety net. It gives us a much more secure place to live than renting, it’s cheaper than renting and if it came to it I could sell it and buy another in a cheaper area outright, even if that meant moving away. And it has made me money by increasing in value, though I know that could reverse.

So to answer OP I am worried about bills but I’m also grateful to be in a better situation than many others. If I couldn’t pay utility bills I might get cut off, but more likely they’d work out a payment plan - though if things were that bad I’d probably plan to sell up and move.

Mulhollandmagoo · 12/08/2022 11:01

ABrotherWhoLooksLikeHellMugYou · 12/08/2022 08:45

Mortgage first. Always.

Same here. my first priority will be to keep my house at all costs.