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.

Good advice

If you did decide to sell would your ex have any claim on any of the proceeds even if the house is owned by you?
Sorry, if I missed this...

This. We pay no housing costs and live off my wage of approx £1300/mth. It can be tight, but we manage. You should be fine with 2.4k.

Don't do anything right now. You have too much going on. Take a pause, a year is a good idea and then reassess... bearing in mind catchment areas etc. (for both primary and secondary) when you do.

One thing I would say, is based on your take home wage you are on not far off 50k salary. Once your salary goes over that, try to salary sacrifice everything above the 50k into your pension. You will continue to receive full Child Benefit that way, reducing your effective marginal tax rate.
Your child will be in school by the time your fixed rate ends, so your childcare costs should be less, which is good, as others have said, hold off till things are more stable, mortgage rates have settled, and you won’t have so much of an early repayment fee. That way you minimise your associated moving costs. Also consider the two sets of legal fees (buying / selling), the estate agent fees, and any stamp duty you will need to pay.
If you do decide to move at whatever point, look at whether the property could be extended at some point if you end up needing more space - eg loft conversion, as that can be a cheaper way of getting more space. As others have said, consider school catchment areas too.
I would say, do consider ensuring your budget works even without the payments from your ex. It may have to wait till your child is older and gets free childcare, but relying on it makes you more vulnerable. I know it sounds awful, but I totally relied on the childcare payments from my ex, then when DD was 6 he stopped paying, and all attempts to reverse that have failed. It made life very difficult, and I wouldn’t want anyone else to experience that.

I'm mortgage free in my own small flat but live on my own and that's unlikely to change (I don't want to live with someone ever again).
It is wonderful being mortgage free. It's a huge weight off your mind. The other plus is that a smaller property costs less to run.
However, in your case, I wouldn't be too hasty. I think you need some time to let the dust settle. There's been a lot going on and a lot of emotional upheaval. Give yourself some time to heal. With your salary and mortgage payment you should be able to manage well.
When the fixed term nears the end you could reassess the situation then - also with a view to your child starting school. What catchment area would you like to be in etc?
There are a lot of advantages to being mortgage free in a smaller property but you do need some time to consider all the options and the implications of each one.

I think that will depend on childcare costs. DD is 10 now, but when she was at nursery at was almost £2,000 a month full time.

They're on over 50k. Take home for c.50k is under 3k a month (assuming pension and residual student loans)

I also wouldn’t rush in to it.

I am not in the same situation but have considered doing similar in the past. DH has always thought I was mad because we love our home, and I already moan about lack of storage etc here!! But the thought of being mortgage free is so appealing. It would be life changing and give us the ability to save and also have more disposable income every month.

In your position I would wait for now and if you still have these strong feelings in 6-12 months then go for it.

At the moment it sounds like you can comfortably afford your home - and it would be a huge asset in the future. That said, so would any home.

We went mortgage free in a beautiful Victorian terrace. No sound issues as the walls are so thick. I absolutely recommend it. Life dealt me an unexpected bad hand health-wise and being mortgage free meant I could leave work and focus on my recovery. The freedom it's given us is life changing. Yes the bigger house is the better financial investment. But finances aren't the only thing you need to invest in.

Spend some time in the daytime with that fear. Is it about being alone? Is it about not having enough each month? Is it a fear of losing your job? Is it a fear of debt? Did you own the home before you met DP? Is echo others in that if it's just a couple of months this may be a stress reaction or just wanting life to feel easier, but you don't yet know if it's actually tricky to manage or if you are just worried about it because you're suddenly on your own. You will rebuild. Life will be good again. I tried to sell a house and had to take off market despite significant reduction in price -spring would hopefully be better which gives you a few months to have data and numbers to help balance out the feelings side of the decision (either way).

Good luck with that.

Having once endured five years of terraced living with various terrors on the other side of the walls, that's not something I will ever do again. Detached houses until the day I die, the more detached the better.

When does your mortgage offer run out? Most company’s charge a redemption fee if you duck out early, so I’d definitely wait until your offer is coming up for renewal and see what the market is up to. Prices are stagnant and falling back slightly so overall it’s a bad time to sell unless you absolutely have to. Experts are predicting prices will begin to rise again end of 2024/spring 2025.

I wouldn't make any decisions right now after a break up.

Terraced houses really don't appeal - just the noise really.

Smaller would be perfect and mortgage free would be amazing. But nothing would entice me into sharing walls with neighbors again.

Maybe a smaller home with a small mortgage or wait to see how the market fairs?

you'll be charged an exit fee dont forget to incorprate that-id stay for now younever know u might meet someone else one day

^ This

Give it some time to see how you can manage before you make any rash moves.

We're in a terraced house and mortgage free and I wouldn't swap it for anything. It's a gamble sometimes though if you have noisy neighbours. We're lucky that we don't.

I agree with the suggestion of others that you should wait for a while. But £1000 per month on your mortgage is less than 1/3 of your monthly income, so I would have thought thst would be very manageable providing the mortgage rate doesn't increase dramatically.

I’ve been in your position. Don’t make a hasty decision. Give it at least 6 months and see how you feel then.

I can see why you’re tempted and honestly being mortgage free is great. We also have a smaller terraced house and are now mortgage free - the plan is still to move because realistically in our circumstances we DO need more space, but the thought of paying a mortgage again has stopped us taking that step so far. (Currently trying to save enough that we should hopefully only need a small one).

That said, I do agree that you should hold off and let the dust settle a little if you can. It’s not always best to make these big decisions after a bit upheaval.

@TurnTheDamnedLightsOff I hadn’t considered student loans - doh! I know a lot of people who aren’t paying a penny into their pensions, and it worries me. I’m not paying a lot but I am paying what I can.

do it. You are buying a home for you and baby not an investment vehicle.

you will be so much freer to make decisions without the shackle of a mortgage.

let alone the quality of life increase, and much more financial freedom

I would take a middle path.

Mortgage free would be great, but in the short term a move is disruptive.

I am single so always have an emergency plan. Something like:

I have / will build x savings
If I lose my job I will have a redundancy payment of at least xx
If I went interest only short term my payments would be y per month
I need a minimum yy per month to cover essential costs
I would need z amount to freshen house, put it on the market and cover legal fees of moving

I would have 24 months supply from all the above factors before feeling the pinch too much, but I am childless too. Still, I know that if I needed to sell the house and move, I would have time.

This may be a good idea anyway and I'd be tempted by it, but giving yourself the mental reassurance of an emergency plan might enable you to judge more easily.

Also lots of people live in terraced houses, they’re normal and fine and not particularly loud at all