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.

The bank owns it when you have a mortgage. People get carried away saying they've "bought a house" when they haven't.

But if you hadn't bought a house 30 years ago you wouldn't be homeowners now. In 30 years your DD will still be a renter, your friends DCs will be homeowners.

It does because until the loan is paid off it holds the deeds

If you've bought it (albeit with a mortgage) then you own your own home. Otherwise no-one would own their own home till they're at least middle aged. If you rent you definitely don't. People buy things like vehicles with a loan but it's still their car. A mortgage is the same thing

Seems sensible to me.

Before we had kids we saved deposit but as our jobs moved around made sense to rent not buy -post kids wanted more stability for them so bought.

Having bought we'll have paid off mortgage before we retire so won't have to worry about paying rent or mortgage out of pensions - downside repairs will be on us.

So I agree looking down on renters is daft but having a mortgage doesn't mean you don't own the property - you just don't own it outright yet.

You do own your home as a mortgage holder. It's just that it's also collateral on the loan that you are repaying for it. It's a nuance but not a difficult one.

Paying interest on a loan is throwing money away if house prices aren't rising.

Paying someone else’s mortgage and having nothing to show for it’s throwing money away.

That isn’t true though in most cases.Even if like now when house prices aren’t rising it is not throwing money away, compared to those who are throwing money away renting.

You'll get there one day, PP. I believe in you <3

I don't think a mortgage is usually more than renting. And your daughter clearly isn't investing the difference in anything!

My mum is in her 90s. She had a 25 year mortgage which was paid off when she was 50. She's had 45 years of living without paying rent and for the last ten years before that her mortgage was tiny.

How on earth can rent beat that?

I remember in my home town, many years ago when interest rates rocketed (14%). All those people who had "bought their home" realised they hadn't. Oil city with lots of cash and lots of mortgages.

Keys posted back to banks (who did own them). Took 20 years for the city to kind of recover and still today lots of people are very wary

I always remember my dad (who grew up very poor and was an ophan) calculating his gran's council house rent and asking her how many times worth the house's cost had she paid in rent so far over her lifetime.

She was 60 and I believe she'd paid six times worth of the house's value in rent.

He said that was what first drove him to buy his first home. Now he owns multiple homes, mortgage free, worth several million.

Genuinely buying a house and accruing equity Vs renting makes a huge, huge difference to your long term wealth.

I don't know what you mean?

Thank you. The banks own the houses until the loan is paid

I am sure you'll own your own home one day.

She means that the bank doesn't own your house, because it doesn't. You do. The house is security on the loan, so if you default on your payments, the bank might repossess the house to recoup the money it lent you. But that is not the same thing as owning the house. The bank lent you the money for the house and if you don't repay it, it could take the house to get its money back. That's all.

The banks dont own the house for gods sake!!!!

Yeah. It's like having a conversation with someone who's convinced the Earth is flat.

What are you thanking them for? Being as equally dim?

It's possible, but you'd be surprised how many people don't understand this.

Oh I surely do and have done for some time. Cash buyer in 2014 after expating for many years. Richmond Upon Thames too...so not too shabby.

No need to look down on young people who get a mortgage, especially since house prices have increased 70% since you bought yours.

We put down a 15% deposit on our house when we bought 3 years ago so even ‘if’ the bank owned the part of the house with the mortgage on we still ‘owned’15%. Houses in our street have gone up 20-25% since then so now we ‘own’ about a 1/3 of the house and the remaining 2/3 is covered by the remaining mortgage.

houses to rent in our street (with 1 less bedroom as we have an extension) are being rented for £2-300 more than we pay for our mortgage. Even if that 2-300 saving is eaten up by house repairs we are still in a better position going forward than a renter. Next year we will have paid off a little more of our house off but a renter will still be in the same position. The money they paid in rent just gone. No longer a benefit to them.

so many landlords are selling up, there are less properties available and if they do they go quickly for high rents. Landlords can be picky about who they rent to so are going to choose well employed people, definitely not pensioners with no income so I’m not sure where all these renters will live once they hit pension age.

Your friends children are far less likely to be served with an eviction notice.