To want to throw in the towel and go mortgage free? Everyone telling me not to?

[Yetsterday]

I have a two year old and broke up with DP a couple of months ago. I am or was lucky that we lived in my mortgaged home. It’s worth around 500k with a 280k mortgage. This is repayments of around 1k a month. I earn more than ex and he will be paying 400 a month towards dc as per the CMS calculator.

Even though I am used to paying most things myself, I suddenly feel spooked with this mortgage as a single parent. My take home is 3k so in reality I have 3,400 a month to make it all work. I’m feeling very overwhelmed. I have seen some terrace houses nearby that are 240k so I would practically be mortgage free. I’ve voiced this with friends and family and they think it is crazy to do it unless it was strictly necessary as this house will go up in value more and then if I did downsize in future it’s always there. I do get their point but I feel sick most nights that this is on me and I now also have a child to think of. What to do? Has anyone been in a similar scenario? I feel constantly worried as have only 3k savings which I’m also trying to build up but obviously 3k won’t get me far.

Agree to see how it goes for a few months. £3400 income and a £1000 mortgage payment leaves plenty spare for other bills, living and saving, but it would depend on what your childcare costs would be, how reliable your ex is with maintenance, whether you have other expensive costs like high bills on a large/expensive property or car payments/travel costs. Also if your mortgage is going to go up with higher interest rates?

Have a really good review of your budget on your own and make sure you account for all irregular costs. Have a look at:

Do a money makeover and potentially save £1,000s - Money Saving Expert

Another thing to be wary of is that a smaller property wouldn't necessarily mean significantly lower living costs, if it's further away from work/childcare so your transport and childcare costs increase for example. Or if it's less energy efficient so your bills rise.

Terrace houses aren't necessarily noisy btw. We lived in a Victorian stone back to back where there were 4 different households adjoining, 2 either side and two round the back as those houses were offset/different widths and we never heard a peep out of any of them.

Is the mortgage and and property in your sole name? If yes, I would stay.

We paid off our mortgage last year when DH was made redundant. It's very liberating and a lot of the chat over interest rates etc are now going totally over my head as I've no need to worry. We'd love a bit more space but I love the area I'm in plus I've fabulous neighbours so we are staying put. I absolutely would not rush into anything if I were you and I'd take my time. Explore the idea a bit more and look around to see what homes are available and what type of home would you like and in what area bearing in mind your DC will need to go to school and child care and look at areas that work for you. Also think about moving costs and the stress a move brings.

Yes, regarding noise, it's build quality that counts.

Some of those modern estates with McMansions so close together have outside walls like rice paper and lots of noise complaints.

I am in an very, very old house which is a semi-detached and very, very close to the next house, but walls are 4 feet thick and never hear a peep either. House was very cheap and am mortgage free. Not very big, but will save us having to downsize later.

A really good idea in theory. Make sure it is a house you will be happy in though. Terraces are not for the noise sensitive.

I did this. Could have stayed in the big house but watched every penny. The leaving was awful - emotional and a wrench. Plus the guilt of depriving the kids.
The "arriving" has been great. Money to splurge on treats and for holidays. I started to live. The kids have smaller rooms but the cosier lifestyle has worked for us. And I have lovely neighbours I actually interact with.
You're on your own. Be kind to yourself and do what works for you. And don't panic if the "leaving" bit hurts.

I think it depends how the sums add up.

You have 2.4k after mortgage.

How much on bills, food, travel, childcare costs? If you put some away from Xmas, birthday, etc. what's left?
Don't forget childcare will drop in cost once DC is 3.

Do you think you'd like more kids in the future?

Echo others - don’t make this decision now. I would try and avoid any big decisions post a major life change, let it settle emotionally first. You really don’t need to make this decision now and on paper your set up is fine, you don’t look over exposed financially. However if it continues to be a source of worry in 12 months time, you could look to move then.

I would also echo others that moving is really stressful!

I'd wait a year and see how you feel.

I agree.

Moving is mentally and physically exhausting and I think you should just stay put for a while and see how you go.

If after a few months, you’re struggling financially then think about moving.

Just take it one step at a time.

I'd try and make it work with the bigger mortgage for now and see how that goes. I assume your pay is likely to go up and childcare costs will reduce.

With a 2 year old, you don't need too much space. I moved into a small cottage with my 1 year old and it was great for many years. Now he's 11, I wish I had more room for him to have friends over, sleepovers etc. He can and does have those things, it's just tighter for space than ideal.

I don’t think you’d be unreasonable in whatever you choose. I’m a single parent of 2 and what you would have left after mortgage is what I live on including paying rent. Of course, I don’t know your other outgoings, but it should be doable, at least for a while. Personally, I would choose to be mortgage free over a big house in a heartbeat. There are only two of you, you don’t need tons of space. A bedroom each and comfy living space is all you need. Plus, a smaller house would be easier to manage being the only adult doing all the housework. Having an extra £1000 in the bank each month would make a huge difference to your quality of life. You could save, go on holidays, pay for the expensive school trips when lo is older. Take your time to think about the life you want with your son, and then follow your heart. Good luck op x

1k a month on 280k mortgage seems quite low, are you on a low rate and how long are you fixed for?

@Luxell934 it’s fixed for another 3 years as of last month. I agree it’s low and that’s another concern for the future

I’d carry on how you are for now and revisit the plan at a later date. A £1000 mortgage on £3400 income is more than doable for now.

Maybe if your rate changed and it became unaffordable I’d do it but for now I’d stick. Also loving house is stressful and costly.

Also if you did it now with three years on your fixed term left you’ll likely have to pay a early repayment charge I think typically these are 1% a year of remaining mortgage fixed term so 3% charge on the 280k.

What about looking at a small terraced semi for or smaller detached 60s build for the 300k or 320k mark Easter time when the market may be better. Pay a small mortgage off over 10 years?

Or down size when your 3 year deal is over

We're mortgage-free in a small terraced house and I love it. We have two teenagers too, and yes, I would love a bigger house, but it's lovely not having that debt hanging over our heads. This might change down the line - we're young, DH is early in his career and I'm retraining into a new career, so 5 years from now we might change our minds, but right now it's great.

All the same, you've been through a lot lately. I wouldn't make any big choices right this second - see how it goes for 6 or 12 months.

As you are fixed for the next three years I would stay put. Reevaluate in 2 years time. A lot can change in that time. You may have had a promotion/be earning more money, you may have met someone else, your child will be about to start school and child care costs should reduce. I have been in your shoes and been solely responsible for a mortage whilst being a single mum, it is doable and your finances are fine to do it. You are trying to build up your savings, which is a good thing in case of things going wrong, needing replacing etc. If you did downsize and had no mortgage you will have more disposable income but will you have anything tangible to show for it?

Give yourself some time and get over it all. See how your money goes and know you have that option.

Also if you do move don't under esitimate the moving costs and the renovation costs to get property as you would like it. It always cosst more than you think.

We made a decision to stay smaller and go for mortgage free, but in your position you are already in the bigger house and moving is expense and big upheaval so I’d say stay where you are and see how you go. Nothing to stop you moving in future if it turns out you are finding it too difficult. Make sure you have appropriate life and income protection insurance as you are just relying on yourself now.