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Original poster

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

119 replies

Yetsterday · 05/12/2023 09:50

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.

OP posts:
Roselilly36 · 05/12/2023 11:13

I would take some time to think, and see how you get on until the Spring. I know a few people that have tried to sell (different areas) with no luck at all. It’s a buyers market. If you decide to sell, factor in all the costs associated with that. Good luck with whatever you decide OP Flowers

Grantanow · 05/12/2023 11:15

It all depends what you can tolerate mentally but it would be wise to take professional advice so you are clear about the options. Being mortgage-free does open up freedoms for some people but it may not be so for all.

Halfacnut · 05/12/2023 11:16

Don't rush into anything.

You need to bear in mind future schools etc (which might rule out staying in your current house, or might rule out moving).

Personally, I'm in favour of mortgages. I am mortgage free, but this was only possible due to having had big mortgages when I was younger, in order to live in houses which doubled in value. I then sold up and was able to buy my ideal house, but mortgage free.

Abra1t · 05/12/2023 11:19

We paid off our mortgage 18 years ago. I have never regretted it. Our house is small and was probably undersized for us when our children were teenagers. Now, when it's mostly just the two of us at home, it is just right. And there has been a lot of security during redundancies and financial crashes knowing our house is ours.

Baftler · 05/12/2023 11:19

I would look again at houses around 18 months to 1 year before your fixed rate comes to an end. You could always get a cheaper house and have a smaller mortgage rather than fully mortgage free but tinker around with a mortgage calculator to see what the monthly payments would be.

Consider looking to the future in terms of schools not just primary but secondary also, and wherever you are considering moving to imagine your child as adult sized because some day they will be.

Think about space not just about being mortgage free. We have rooms downstairs for the children separate to the lounge meaning no toys in their bedrooms and friends are downstairs too. It also means as teens they are not just locked in their bedrooms, there is space downstairs to hang out.

When we searched for this house on Rightmove all we did was put in the number of bedrooms and an area, no price specification because we flipped the results to lowest price first to see what met our criteria. This was to move for a secondary school catchment and become a place we hopefully stay for 20 years.

Marionberry · 05/12/2023 11:20

Do not make a decision right now, in theory downsizing makes financial sense but you have just gone through a break up. The ongoing bigger bills are always an issue obviously.

I personally would not have a lodger, we had a lodger but when he left we had decided to try for a child so didn’t replace him.

BigDahliaFan · 05/12/2023 11:21

Being mortgage free is very liberating, but we took on another mortgage in order to move from our mortgage free terraced house - in a large part to get away from noisy neighbours.

Jonny234 · 05/12/2023 11:23

Depends on what type of person you are.

If you think you'd be inclined to splash the cash on lease cars etc if you had extra then stay where you are.

If you are the type to save the £1k on the mortgage, plus lower heating/ council tax bills etc then go for it. In just 5 years with interest you could be up at £100k savings and your stress would be lower. This would then give you the choice to either stick or trade up mortgage free.

Don't let people talk you into thinking house prices are on an inexorable rise. With the way inflation has been and house prices falling they have fallen maybe 5%-10% in real terms in each of the last 2 years. While interest rates stay high and the govt taxes high there is no money in the market to change that.

Whatever you choose, I believe perhaps 6 months post divorce is a bit too premature. Give it until late spring and make a decision then, if you do decide to move it's the best time to market a property.

Daisies12 · 05/12/2023 11:24

I wouldn’t make a decision now, give it some time. £2.4k after mortgage seems a lot to me. I wouldn’t rush into anything, give it into next year and see how you’re doing.

StrictlyComeSnoozing · 05/12/2023 11:26

We opted for the smaller house and being mortgage free. If we ever change our minds we can move. But it means we can save a lot more and enjoy a really good quality of life.

You'd essentially have £1k more in your pocket each month so could build your savings nicely.

horseyhorsey17 · 05/12/2023 11:30

I was in a similar position (on similar earnings) to you and I moved to a smaller house - I still have a mortgage as I am in the south east and houses are insanely expensive and I needed three bedrooms for my kids, but it's a small mortgage that doesn't keep me up at night! The house will still go up in value, just obvs not as much as a bigger house, but it costs me a lot less now and that is my priority.

IMustDoMoreExercise · 05/12/2023 11:33

Yetsterday · 05/12/2023 10:56

@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

In that case I would make a decision when the fixed rate is coming to an end.

How secure is your job? Are your parents in a position to help if you lose your job?

Eddielizzard · 05/12/2023 11:34

I would absolutely wait a few months and then take stock. Don't do anything rash. Seems to me that you can afford your mortgage, and this is a period of adjustment. Give it time.

Startingagainandagain · 05/12/2023 11:34

Give yourself some time. You might not enjoy living in a terrace and your home might a lot of work done to it. At least where you are you know what the neighbours/area/house is like.

If you have a spare room you could rent it to pay some of your mortgage.

gotomomo · 05/12/2023 11:36

Let it settle for a few months, at the moment it seems overwhelming but life has a habit of the unexpected happening.

Waxdrip · 05/12/2023 11:38

It's a personal decision but would be a no brainer for me. I'd move and be mortgage free, if it's a good quality terrace. The peace of mind as a single parent if you ever lost your job or became unable to work is priceless.

It would also be easier to move in your own time with a toddler than in three years with a child in school.

caringcarer · 05/12/2023 11:46

Very few people buy houses at this time of the year. Wait until the end of March and see how you feel then. It sounds like you can still afford your house.

ElizaMulvil · 05/12/2023 11:49

If you do decide to take in lodgers, I think you are allowed to have £7,500 pa before you need to pay tax. ( Not everyone's cup of tea though.)

Propertyshmoperty · 05/12/2023 11:50

I agree with trying the middle ground of giving it at least a year, we tried selling our house over the past year, 2 chains fell through, complete nightmare.

If you've got a house you love and neighbours you like it may be worth trying it for a bit. I'm semi detatched and have an unpleasant neighbour and I would mortgage myself to the hilt to not have to deal with him anymore but 2 failed sales has destroyed my resolve so I'm taking a break from this shitty housing market for a bit. Xx

SkyFullofStars1975 · 05/12/2023 11:55

Being mortgage free is a sensible idea but I wouldn't touch a terraced house with a bargepole. I'd consider other options and keep looking.

LostFrog · 05/12/2023 12:01

Don’t make any rash decisions. Be glad that you have options but you don’t need to decide everything now.

TurnTheDamnedLightsOff · 05/12/2023 12:03

I would see if there were semi or detached homes in that price (unless the terrace is the end one). But I'd go for it personally.

AllTheChaos · 05/12/2023 12:03

LylaLee · 05/12/2023 10:07

Rent out your house to cover the mortgage. With the extra rent a smaller place.

By the time OP has paid 40% tax on the rental income though…

Moveoverdarlin · 05/12/2023 12:04

I’d give it a year or two before you do anything. Having space is worth a lot, don’t panic and downsize, not having room for bikes, toys, friends over, parties, sports gear will drive you mad as your child gets older.

Unexpectedlysinglemum · 05/12/2023 12:11

Can you take in a nice lodger if you have space to help pay the mortgage now? That's what I'd do if I had a spare room

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