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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

is this a good idea to put an end to immense financial stress?

73 replies

monsh · 05/08/2023 09:34

I have a nice sized four bed house in a nice area. Purchased for around 480k a couple of years ago but only have 250k equity. I’ve found things a struggle. The mortgage is 900 and I’m living her alone now after my relationship ended. So I have no help with bills etc. My take home pay is around 3k. I used to save around 700 a month but I am struggling to even save 100 at the moment. I’ve tried all sorts like cutting back the sort of food I would normally get or not eating out, no cinema etc. I don’t do much anymore and finding it really miserable. DD is only small so she won’t remember this house. Would it be a bad idea to try and find someone cheap that I could buy mortgage free? I’d have to leave this area probably and it makes me feel guilty as I know it’s a nice home for a child. Our lives are so miserable without any spare money though. My wider family are all mortgage free (in large homes) and I just don’t know how else to move past this stress. Last year we spent so much on heating the house and I am dreading it again this year.

OP posts:

hauntedvagina · 05/08/2023 09:49

OP I'd be thinking long term here. You're struggling on a low interest rate, when your fix is up in 2026 you need to be prepared to see an increase of roughly £500 a month in your repayments. If you're struggling now, this will unaffordable for you in two and half years.

You need to speak to a mortgage broker, find out if your mortgage is portable (you keep your existing mortgage but take it with you to a new property and avoid an ERC) then when your fix is up in 2026 pay off most of it with the equity and take on a new, smaller mortgage.

Speaking to a mortgage broker should absolutely be your first point of call though.

burninglikefire · 05/08/2023 09:50

Moving is an expensive and stressful process. If the house is nice and is in a good area could you consider letting a bedroom, say to a female lodger? You can get about 7K a year from this without paying tax. This might give you a couple of years to take stock.

Hollyhead · 05/08/2023 09:54

I think it could be but I don’t think you need to necessarily go completely mortgage free, why not move and if it helps you stay in a nicer area have a mortgage of 50k or something. Your existing mortgage might be portable so you could put most of the equity in high interest (earning more than the mortgage costs you) until 2026 then repay a large sum. If you’re in a 4 bed in a nice area you should be able to downsize without it being to something horrible! I’d prioritise an energy efficient move too to help reduce costs.

Marwoodsbigbreak · 05/08/2023 09:57

I don't understand why it's a choice between staying in a 4 bed in nice area, and moving to smaller place in not nice area.

Surely you can move to two bed in similar area and massively decrease your mortgage?

benfoldsfivefan · 05/08/2023 09:57

How would you pay for legal fees etc if you move?

I agree on renting out a room , you could earn about £500 pcm depending on where you live. This would be tax free. Give it a year then reconsider. Of course, your current house would be less likely to depreciate in value than the potential smaller one in the not so nice area.

ChazsBrilliantAttitude · 05/08/2023 09:59

Are your earnings likely to remain static or will they go up a bit in the next few years?

Have your bills changed by £600 pm - if so what has driven that? You’ve gone from saving £700 to struggling to have £100 left? We have a 4 bed house and our gas & elec went up £200 pm but that is with 4 people.
For example - do you have radiator thermostats turned down in the bedrooms you don’t use.
Are you claiming everything you are entitled to include the council tax discount?

Shinyandnew1 · 05/08/2023 10:01

I don’t know anyone with young kids who are struggling with money to be able to be mortgage free-why is that your first thought? I’d move to a smaller 2- bed house with a small mortgage when your current deal ends.

greenteaandmarshmallows · 05/08/2023 10:02

I'd downsize rather than aim for mortgage free st this stage

crew2022 · 05/08/2023 10:16

I would move. A two bedroom house would be cheaper to run and I'd rather have a small or no mortgage and have security. That would make dd life more comfortable than a 4 bed: how many rooms can you use?
In terms of area I'd aim for the best I could whilst decreasing the mortgage or paying it off.
There's a big difference between not as nice as now and 'bad' in terms of crime and lack of opportunities for children and young people. Only you know how not nice the area is but I would factor in things like crime.

MuggleMe · 05/08/2023 10:19

I'd try and get somewhere with a smaller mortgage rather than mortgage free.

watersprites · 05/08/2023 10:21

Purchased for around 480k a couple of years ago but only have 250k equity.

tbf that's a lot of equity!

Could you switch to part interest/part repayment?

watersprites · 05/08/2023 10:22

Or as pp said move but aim for smaller mortgage eg 100k as opposed to mortgage free

GirlOfTudor · 05/08/2023 10:24

Love the typo 😂
I think it would be smart to move to somewhere mortgage free (or with a tiny mortgage). You could then find somewhere bigger/nicer once interest rates settle.
£3,000/month income after taxes is an awful lot though. What other outgoings do you have that mean you spend £2,900 of this?!

sunshinesupermum · 05/08/2023 10:30

If you can port your mortgage I agree with PP to downsize but still in a nice area so that if/when your rate increases (and who knows where we'll be in 2026 - hopefully better after the next couple of years) you can afford the smaller mortgage thatmoving will provide. The long term costs of running a 4 bed house outweigh the costs of moving.

Shinyandnew1 · 05/08/2023 10:31

My wider family are all mortgage free (in large homes)

I wouldn’t let that affect your judgement. How many of them are over 55 or in dual-income households!?

hookiewookie29 · 05/08/2023 10:33

When you are working to literally just keep the roof over your head, then it's not worth it. You have no spare cash to enjoy life. I would absolutely sell up.
Life is too short and precious to be miserable.

Namechangedforthis25 · 05/08/2023 10:34

What do you want long term

happy with a smaller house forever - then downsize to somewhere safe with a smaller mortgage

if you would like to move up again then I’d stay put - at least for a few years to see what rates do first

ClairDeLaLune · 05/08/2023 10:37

I would compromise on a smaller house but still in a nice area, with a small mortgage. Don’t live in a not nice area if you have the choice, quality of life is important. But there’s no point in the 2 of you rattling around in a big, expensive to heat, house.

gogomoto · 05/08/2023 10:37

Moving is stressful and expensive, whilst long term this might be a good option, right now is taking in a lodger a better one - a female mon-fri one for instance. In fact I'm looking for somewhere!

You can earn through lodgers without paying tax up to a point. The great thing about Mon-fri is they won't be doing washing and generally their partner lives elsewhere at their permanent residence. In my case it's my dd who needs somewhere that's not a student house or bedsit with noisy other residents drinking late at night etc. (she's a mature student and comes home every weekend)

QuimReaper · 05/08/2023 10:45

What are your outgoings OP? I'm trying to work out how over £2K a month is going on just bills and living expenses - is it childcare?

IMustDoMoreExercise · 05/08/2023 10:48

fortheloveofflowers · 05/08/2023 09:37

Get some foreign language students in to help.
My take home is the same as yours but my mortgage slightly higher.
however, if you can buy a house that you like for the equity you have to then do it

I voted YANBU but if you could do this, then I would do it although it is obviously difficult with a child.

You need to think about your daughter's schooling. How good will the schools be in the cheaper areas?

IMustDoMoreExercise · 05/08/2023 10:52

ClairDeLaLune · 05/08/2023 10:37

Yes, this. You need to think about schooling.

Itsnotrightbutitsok · 05/08/2023 10:52

I do think 2 people living in a 4 bed is mad, especially if you are struggling but I don’t know if it’s the right time to buy/sell at the minute.

Have you looked in to getting a couple lodgers or as a PP said foreign exchange students?

I wouldn’t hesitate to downsize but only if it was a nice home in a nice area.

The best thing to do would be to find a nice home of say £300k and put down £200k and just get a £100k mortgage.

Ireallycantthinkofagoodone · 05/08/2023 10:58

If you have a spare room, why not rent it out to help with bills? It’s really not a good time to sell - you could end up having to live with your home in ‘show house’ condition for ages, spend a lot on solicitors and agent’s fees, stamp duty etc., and be unhappy in a ‘not so nice’ area.

Gazelda · 05/08/2023 11:01

Are you able to port your mortgage?

Would you be able to reduce the size of the mortgage and still keep the fixed rate or would you need to keep the same size mortgage and (hopefully) overpay with the equity?

What would your moving costs be?

Can you live in one floor to reduce heating costs?

Can you take in students?

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