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

[gotelltheoldmandowntheroad]

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.

Not high earners at all and I'm worried about having to remortgage at the of 2023.

We bought our home 3,5 years ago and went for a house / mortgage way below our maximum affordability as we wanted to be sensible and try and future proof ourselves agains any adversities / change in circumstances. It just means we bought a cheaper house in a cheaper area rather than an expensive one which would have maxed us out.

We had savings when we bought but that's now been eaten up by childcare costs and the increase in bills / prices mean we are no longer able to save each month. That scares me as saving money was always a priority, alongside paying bills but there's just nothing left at the end of the month.

So bills don't overly worry me as we always pay that first, but the mortgage going up next year does. We have a Credit Card for house emergencies but I'm hoping that our renovation efforts pay off and nothing major will need repair ing in the next few years 😫 Otherwise we are f*cked.

We have a mortgage and have always kept a few thousand in savings for an emergency. We do dip into it for major purchases but don't let it go lower than 6Kish.
We are on a 2 year fixed rate until May 2023 with our energy company so have dodged a massive bullet there.
We also luckily fixed our mortgage on a 5 year deal just before the rates shot up.
We are definitely the exception there and realise we are incredibly lucky.

Mortgage payers (sometimes) have more options open to them if they are struggling financially. Obviously that depends on how far into their mortgage they are/how much equity they have/if they have taken a risk and have a large mortgage with no wiggle room.

Short term issues they can speak to the mortgage company and ask for a short mortgage payment holiday.

For longer term issues they can also review their mortgage (if on variable rate or fixed term has ended) and, if provider agrees, have the repayment term increased which will decrease monthly payments.

They can also consider releasing equity if the financial issue is very serious.

None of the above options are particularly attractive and may help out with short term problems, but have long term consequences that need to be understood.

Generally, I would always pay the mortgage if I hadn't spoke to and had a plan in place with my mortgage provider first.

Potentially you could be a single pensioner who is mortgage free.
Looking on the Internet state pension of £9620 a year or £185 per week
Single person council tax discount
Eligible for winter fuel payment
Eligible for cost of living payment towards energy bills
People will still be worrying about paying increased costs for energy and food

Everyone is affected by the cost of living increases

HA no. I am a homeowner and I am incredibly worried about bills. The mortgage will always come first, I will pay what I can reasonably afford for energy.

Mortgage is quite high relative to our earnings. So no savings. Just trying not to think about it tbh. Cutting back on food & will cut back on heating.

We don't really eat out and are already quite careful so not sure where money will come from.

Our mortgage was about £700 cheaper per month than renting would be and it equated to about 1/5th of our income. We aren't super high earners but combined we have a good income. We have enough that the price hikes aren't going to see us destitute. Our childcare costs are huge but my DD Is about to start school which will massively reduce our outgoings too.

It isn't the mortgage that makes us anymore stable - it is our incomes. But, if we didn't own our place and we were still paying rent, things would be tighter than they are.

Mortgage first, it’s the homeowners who have overstretched to move who may come unstuck, especially if they have fixed rates that may be ending.

We have a small mortgage (less than £50k) and the payment is less than 20% of my wage alone so we will be ok. We almost moved to a larger property last year but I’m so glad we didn’t now!

I'm still in debt and am paying it off now and my husband wants to own a home but I am really put off the idea of a liability to a bank tied to my home and don't want to enter into a mortgage, let alone right now.

Are you happy paying out for rent - which may increase with time - from a fixed pension amount?

It does depend on type of renter - council HA tend to be much more secure than private rentals and if you have to move because of landlord things - wanting to sell up or whatever it does costs and can go through savings.

Our current mortgage is half what private rent is for similar sized house in our area and it's fixed for next 4 years in mean time we've built up considerable overpayment because we can over pay a bit every month.

Our first house was more of a financial burden - house itself was a money pit and fixing the mortgage for as long as we did ended up working against us. Did give us more security than private renting as we didn't have to move around - which had been fairly common experience in pervious 10 years of private renting.

Higher bills are a worry - but we can cut back live slightly less well and still meet mortgage payments - but we're few years into owning now and have buffers.

Surely it’s not that much different to renting?

we have a mortgage and not high earners or with thousands in the bank but we earn more than enough to cover our bills. Ours aren’t going up (for now) as both energy and mortgage are fixed for a good while longer.

but if I was struggling I’d prioritise the mortgage over anything else bills wise.

Mortgage first always. We've fixed the rate for 5 yrs. If we hit a wall the company will reduce the payments. Fuel comes after food. A cold home is better than no home and fuel companies have to suck it up like the rest of us. Having grown up during thatcherism with 14% interest rates you learn what the priorities need to be for you.

Most homeowners try to get the biggest mortgage they can, so any savings go into the deposit. Also, most homeowners are so stretched when they first buy the house that some repairs, renovations etc have to wait years. Meanwhile, you retain the 20 year old carpet that came with the house and eventually replace it 10 years after you move in. Owning a house is usually a combination of short term poverty in return for long term security. Whilst paying off the mortgage people often stay in jobs or relationships that they hate just because the disruption involved in any change would be even more traumatic than the status quo.

Your assumptions about property owners are laughable.

I know. I'm from London. It's why I'm here. People think it's grim up North but it's really not, it's lovely. The house I'm in, if you transported it to say zone 4 it would be at least 500K. The difference is absolutely crazy but this isn't luck, I made this choice and now I'm glad I did. I wouldn't want to spend so much just to be able to live somewhere. What I pay now seems reasonable, whereas anything over £500 a month just to have a place to live just seems crazy. I've never paid more than that.

This depends a lot on the type of house you have though, in terms of what you need to spend on maintenance, and the terms of your mortgage. My mortgage is very low, less than £300, whereas the identical semi its attached to the rent is more than triple that at £900 p/m. That's a saving of more than £7000 per year, and as it's a new-ish modern home I don't spend anywhere near that on maintenance. Plus even if I do spend on something, it will add to the value of the house when I come to sell. e.g. last year I had a new boiler fitted but that 'only' cost £1200 but will definitely be a selling point compared to if I'd left the old 30 year old one in. I've been thinking of having the patio done, yes it will be an initial outlay but comparing house prices it will make the money back or more when it comes to selling. Whereas you don't get that with renting.

OP if a homeowner defaulted on their energy bills, they would first be made to have a pre-payment meter and put on a payment plan, then if they kept defaulting their debt might be sold to loan agencies, who would then work out another payment plan, often very low. While I think there is technically a possibility to have a charge put against the house, that would usually mean that when you came to sell it a profit would then pay back your debt, not that it would force you to sell it immediately. And that is very unusual and only for really big debts, if someone didn't pay their bills for years, not a few hundred quid, because the legal costs of obtaining it would outweigh the benefit.

So I would say generally most people are in a better position with mortgages rather than renting, but not always to the extent they have huge amounts in the bank. You also can't discount the huge peace of mind that comes from knowing, as long as you have a fixed rate mortgage, that nobody can put it up for the next x years, and the bank can't decide to make you sell your house.

Personally no I'm not hugely worried about the cost of living, mainly due to aforementioned cheap mortgage. My deal runs out in 2 years though so I am keeping an eye on things for then.

No mortgage as own house outright , minimal savings but always been able to pay bills (direct debit). I could increase monthly payment if necessary.

I should add we do have savings. I kept credit on the fuel bills which should cover us for 6 months to a year. We're quite a few years down the line and learned a lesson when dh was made redundant not long after we bought our first house. I think renters and those at the end of their mortgage deals will have a much harder time.

We could have borrowed double, but I'm glad we decided not to stretch ourselves too much.

Unforeseen costs have been things like the house needing underpinning - while we were able to claim most of that on home insurance, our premiums then went up massively.

Boiler, fridge, front door, a window, radiator, kitchen tap and washing machine all breaking and needing replacing over the course of a few years. Then the many repairs and services.

It's cost thousands on top of the mortgage and any non-essential work like painting and decorating.

Why would you want to buy a house via mortgage when your rent is so cheap. A lot of the monthly payment in the early days is interest.

See the How Much Of My Paymebt is Interest section
www.which.co.uk/money/mortgages-and-property/mortgages/remortgaging-and-managing-your-mortgage/how-do-mortgage-payments-work-ajjvj1p1gkmr#headline_3

Our house is owned outright, and sure, of course we're worried about the bills.. we still need to be able to heat the house and eat.

The fact we're not at risk of losing the house is a huge help, i'm not going to deny, but if we can't cover our bills, we'll still be in a shit load of trouble, and the only place we have wiggle room in the budget is the food money quite frankly.

Yes we have a little squirreled away, but if we start eating into that, what happens when its all gone?

There is nothing wrong with the PP aspiring to buy a house in the future though. There are many benefits to being a home owner. It's an investment for your future, for your children's future, something to leave them if something happens to you. And if you got mortgage free then that's something you don't have to worry about for retirement.

We have a mortgage, our monthly payments are less than half what we would pay in rent for the same house. I'm very glad we're not still renting. We overpay and so have the option of dropping our payments if need be.
I think most people, unless very comfortably off, are worrying about the rising cost of living.

whereas anything over £500 a month just to have a place to live just seems crazy.

We paid more than that in rent to live in two different northern cities over a decade ago - one a 2 bed flat just outside city center so we could walk and avoid transport costs and one a 3 bed end of terrace in suburb house. I think it was £650 - and that was down from original rent as market was flooded with flats at time - and £600 for the house.

Depending in the property location and size- does sound like an excellent deal.

Our current mortgage is around £500 but we pay more to overpay every month.

Mortgage on our home, own a flat. I'm not worried about increased bills as can afford them, but would rather not pay the inflated prices obviously .

As for money in bank for house repairs, yes we have savings to cover this, and have just inherited a large sum.
If the roof blows off, I will contact insurance company.

If I had to choose between paying the mortgage or the gas bill... obviously mortgage.

I have a mortgage which equates to about 50% of my homes value. I bought it with my XH 15 years ago when married, but am now divorced and on a low income, so it wasn’t a huge stretch on 2 x incomes but with just me it’s a lot. Rent would be a lot higher (maybe double for the same size house) but I would be eligible for the housing element of universal credit, whereas I don’t get any help towards my mortgage cost, despite it being interest only (I’m not paying back what I borrowed, so the mortgage will never go down, just the interest that accumulates on it which is several hundred a month).

My energy bill is likely to be £500 a month, my mortgage is £650, and I earn just over £1000 a month in my (term time only but full time hours) job. I also run a small business which I spend weekends and school holidays doing, for another couple of hundred a month.

Everything else is paid for from my tax credits and child maintenance. So that’s food and groceries, council tax of £230, car loan of £200 a month (soon paid off), petrol, clothing, water, phones/broadband, insurance (home, car, life), credit card repayments of £350 a month (from having to use credit cards to live on during leaner months) and anything else.

We haven’t had a family holiday for several years, although I could occasionally stretch to a couple of nights camping or a weekend somewhere in a travel lodge.

We do occasionally get a takeaway or go out to eat, which I’ll have to stop when the electricity bills are higher, but I would say I live a very modest lifestyle (colour my own hair, don’t have any beauty treatments etc, don’t go out evenings except for the odd coffee and cake, have basic tv package such as Netflix but no sky).

There’s definitely places I could cut back if I needed to, but mortgage, council tax and utilities will always be paid as that has long term repercussions.

Luckily my worst case scenario isn’t awful - I have to sell my house, but somewhere smaller in a less nice area, saving me £650 a month on mortgage, will probably reduce council tax and energy bills by moving somewhere smaller, and could possibly pay off some debts (car and cards) etc with a lump sum from the house to reduce outgoings further. That’s the only reason I’m not panicking tbh. If I didn’t have equity I would be shitting myself at this point.

We paid off our mortgage so our outgoings, relative to what they used to be, are smaller. But I am noticing how much the cost of living is rising against my income, which hasn't risen as fast. I do dip into my savings a bit which is a concern. Can't keep doing that.