To think having a house with a mortgage is not 'owning your own home'

[easternuts]

We had a mortgage for 30 years before paying it off recently on our modest home. Now we consider ourselves home owners.

Dd rents because she doesn't want to pay the bank more in interest than the cost of her rent is. Yes her rent can go up but so can your mortgage.

I've had friends of mine make snide comments that dd is going on another holiday when she doesn't own her own home. This is as opposed to their own children who have recently bought with 95% or 90% mortgages in a part of the country where a 3 bed house is less than £150k.

AIBU to think that you don't own your own home just because you have a £15k down payment. DD has far beyond what is needed for a deposit but it makes zero sense in central London at present.

Because a mortgage can be significantly more expensive than renting. You can invest the differece in ways which will increase in value more than a house increases in value.

I'd stay off the subject of others spending choices. But most people talk about owning their home if they are paying their own mortgage not someone else's.

"Dd rents because she doesn't want to pay the bank more in interest than the cost of her rent is. Yes her rent can go up but so can your mortgage"

Where are all these rentals that are cheaper than the interest element of the mortgage?

And where in God's name do you think your daughter will find a rental in 2044 that will cost less than the interest element of a house purchased today?

Where will she find a rental in 2054 that will cost less than her own mortgage-free home?

If renting is such a better option that buying, why did you buy?

Why are you setting your own daughter up for a fail?

Having a house with a mortgage is a darn sight more secure, stable and independent than renting where you can be evicted for no reason, but yanbu that it makes zero sense to buy in London. When she is at a stage in life of wanting to leave London then she may buy. She should be aware that it's very scarey being in a private rental once you have retired and know that you have no capacity to increase your income but your rent will outstrip inflation every year so you will get poorer and poorer.

If you have a house with a mortgage you can decide how to decorate, whether to knock down a wall to make a larger room or divide a room with a stud wall, you can do what you like with having pets etc too.

You are legally the owner, even with a mortgage. Yes you owe a large sum to the bank but the bank do not own it, they just have a right to be repaid their loan and have a legal instrument in place to prevent you from selling the home you own, pocketing the money and emigrating to Australia and changing your name to escape the debt.

Your position is erroneous. Property and debt are two different things. If I buy a TV using a credit card and then keep flipping credit card to new 0% deals without ever paying off the credit card, the TV is still my property. Same goes for houses.

Nevertheless it's obviously even more secure and stable to have fully paid off your mortgage and be in no danger of a disastrous change in circumstances that mean you can't meet mortgage payments - so yes that's desirable. But that's not the only circumstances which allow you to be a "home owner"

YABU.

Generally speaking, having a mortgage means you're on your way to being a homeowner. One day you'll own a huge asset outright.

Renting for too long means you won't have that.

Tell me you don't understand mortgages, without telling me you don't undertake mortgages

Of course you are correct as the bank has a charge over your house. However your dds reason for not buying is a bit mad.

Yes and to brag about how her DD lives in central London and goes on multiple holidays.

People make different choices. The friend was rude, but OP is being rude too by making snide remarks about 95% mortgages in (shudders) cheap areas, heaven forbid dahling. Why do you know they have a 95% mortgage anyway? Sounds to me like you'd all be better off keeping your beaks out of each other's financial business.

ETA - for clarity, YABU. You can own a home outright or with a mortgage. It's literally on the demographic forms.

But house prices ALWAYS rise in the long term. There will be peaks of troughs in short periods, but they will always rise if you can hang on.
Also negative equity is only when the house is worth less than what you owe - not that the house has simply lost value since you bought it. So even negative equity isn't that common since you need largeish deposits, and repayment loans these days.
If though, she was looking to buy a property with a view to sell it in a few years, then yes, you might run the risk of losing money, with stamp duty and everything.

Its still a term of phrase, to ‘own your home’. Whenever the question is asked on forms to be filled in etc, you would still say you owned if you had a mortgage, because legally you do own the property and the bank has a charge against it.

Do your friends really make these snide comments? I actually think you come across as the snobby one, looking down on their children for buying property in cheaper areas.

My friend doesn't have children but is managing to save for retirement if a home is needed. The system works better over there I feel and I do think UK is odd for the importance it places on home ownership. I know several young couples in mid 20's who have mortgages and have no idea how to do anything like gardening or what to do if there is a leak. I think they are storing up issues for the future and costs to repair go up every year.

YABU You know what they mean.

With a mortgage at least you get something out of it eventually. And you are fairly unrestricted with what you want to do with it.

But with renting it will never be yours. You live there under terms and conditions etc.

However, what kind of 'friends' do you have that are so invested in your daughters holidays and lack of home ownership status?

Your daughter is being a moron if that is genuinely the reason as to why she isn't buying, I assume you've explained that to her as a home owner yourself?

You still own, you just own with a mortgage. When you fill in surveys when it askes about housing tenure there are usually two categories - "own" and "own with mortgage".

Of course you're a homeowner if you have a mortgage. I borrowed money to buy a house, I didn't borrow the house.

Just tell your "friends" it's none of their business what your DD does with her money?

With such a low 15k deposit and a 90-95% mortgage, you’re essentially paying for that house 2x. When you factor in fees, maintenance cost etc..you might break even. It’s a home and we all have to live somewhere, but historically you make more in the stock markets over decades than in a house given all those costs that most people never factor in.

The point is she is paying someone else's mortgage so she may as well pay her own if she can get a deposit.

What these "people" are saying is obviously hitting a nerve brocade if you genuinely didn't care what your daughter does then you wouldn't take offence

He won’t have any asset to pay for his care in later life...

His children will have to pay towards his care, depending on their means.

Enough to continue to pay rising rent once she’s retired? Paying a mortgage is a long game, not about whether house prices are rising right now.

Eh? Of course people with mortgages are home owners. The house isn't owned by the bank. I don't have a mortgage but that means I'm debt free. I still owned my home when I had mortgage debt. The bank don't turn around and demand the house back. If you don't pay the repayments on the mortgage debt the charge means they can legally sell YOUR house to cover the outstanding balance.

I think you need to be less sensitive about your dd not owning a home. Presumably she will try and do this in good time and I would encourage her to save up towards that end.

I have a house with a mortgage. I own it so I can paint it all the colours of the rainbow, refit any room I wish, extend it, rent it out, take a lodger, sell it, none of which I could do if I rented it.

I owe the bank a sum of money which is secured against the house, but the house is mine.

I've been paying the mortgage for a while - I owe less than £20k so soon I will stop paying anyone anything.

Except maintenance of course, which owners pay but tenants do not! That suits your DD better at the moment, in her circumstances.

Yes but you are probably only a home owner for about 15 years if you pay it off at 60 and sell it to pay for nursing home fees at 75. That's nothing to really brag about!

Assuming you pay it off before retiring and haven't had any ill health before then meaning reduced earnings. Then you've got a decade or two free with just the pension to maintain everything, possibly alone if partner dies, then the tax man comes and usually means you have to sell it to pay any IHT to your kids. Not sure it's always as plain sailing as people are making out.

House prices only really matter if you're planning on selling.

Sounds like your 'friend' is looking down on your daughters choice and showing off about her kids choice to get a mortgage. As though that makes them better than you!

It's up to your daughter and nobody's business why she's chosen this route to go down. So if your friend starts that chat just tell her that.

Each to their own.