To sell my house because I want security at this age?

[burnth]

I’m 38. My mortgage is 270k, I pay 1k a month. Single and probably always will be (no desire for a relationship after some pretty awful ones…)

I had the house valued last week and it’s come back at 495k with a suggestion of marketing it at 525k.

I hate owing so much. Current term is 30 years so I will be 68 technically if it’s ever paid off. I will be gifted 50k later this year and may have some other inheritance down the line but who knows.

I want to buy somewhere with my equity and feel secure. All my family are saying it’s a stupid idea, that if I continue overpaying it will soon drop (I overpay 300 a month) and that in the longer run the house will make more money than a smaller one and I can downsize later on with more equity to either use or keep as savings.

I feel so confused. Most people I know don’t have a mortgage by now and this feels huge. Well it is huge. What would you do?

A mortgage isn’t ‘owing money’ in the same way that owing money on a credit card is owing money because the collateral is there in the form of the house.

Can you afford the mortgage money each month? Do you enjoy your home as it is?

Once you are older you will really appreciate the downstairs loo, garden and parking. I would certainly keep going until you can get those things in a smaller house.

Why do you need 4 bedrooms?

What kind of space / new house do you want to live in?
what price bracket?

you could get a smaller mortgage once you’ve pulled out equity from current larger house.

can you get somewhere with an annexe or room that you could let out and use that money to pay down mortgage?

id absolutely downsize in your shoes - and just enjoy your life!

I'd definitely do this. When I got divorced I chose to buy a house outright as I didn't know how much money I'd need living on my own. I got a smaller house rather than take on a loan for a bigger one, but now that I'm retired it suits me perfectly.

Fine if you think it will make you happier but it’s not necessarily the best long-term financial option. The amount owing on the mortgage is basically irrelevant if you can afford it because you can downsize later in the way you are considering now if you want to. Of course if it would give you more money to spend day to day and that would improve your life that’s a consideration.

I’m fairly open to taking financial risks though and have a £350k mortgage as a single parent. I’ve no real intention of ever paying it off and at the moment wouldn’t overpay because I can beat the interest rate on the mortgage on the stock market. I’ve done well with this financial strategy in that the equity in my house has increased more than it would have done in a smaller house but it’s obviously not for everyone.

I wouldn't do this, I'm a similar age and we have just upsized and substantially increased our mortgage. I don't see a mortgage as debt in the normal sense, it's helping me to own an asset which is likely to continue to increase in value in the longer term and is also a place for the family to currently enjoy.

It sounds like the cheaper house won't have everything you need and want in a house? If it does then maybe this is a good decision for you.

But you do you, and don't worry what other people think if that's what you want to do.

Get a smaller mortgage that (after 30k inheritance) leaves you with a small 5 year mortgage at 1k per month.

I’m amazed most people you know at 38 have no mortgage.

I am a similar age and everyone I know has a mortgage, bar one person who is from a very wealthy family.

What kind of house can you get for half the value of your current one?

The other alternative is to rent out some rooms to a couple of lodgers and use that income to over pay the mortgage.

However it does seem a rather large house and I can see the attraction in having a smaller property.

I owe £175,000 and I'm 42. The house is worth about £380. It doesn't bother me having a big mortgage and my priorities are different to yours (I won't go into them as not relevant).
But if you would like to feel secure and mortgage free then do it. It's none of your families business. If they aren't paying your mortgage then it's nothing to do with them. The only thing I found odd was that you said most people you knew were mortgage free at 38. I think that is very unusual as a percentage of the population.
I know people in their late 40's who are mortgage free but not many. Anyway not really relevant what position other people are in. Looks like you could get somewhere cheaper and be mortgage free which is a huge achievement and will offer you so much freedom.

I'm honestly not sure why you would need a four bedroom place if it's just you living there. I would downsize if I were you. A two bedroom would still leave you with a study/spare room for guests.

OP my home owning trajectory has been a lot different than most.
The biggest space I ever had (as an owner) was 750 sq ft 2 bed and I'm now in 520 ish (with a bad layout). I'm not going to lie, it's hard, but if you go from four beds to two beds, that's probably much easier. There were complex personal reasons for my choice.

I thought I could easily use a 4 bed house + garden on my own but I'll probably never have it, but I'm okay with that. Do you get a lot of use from it?

It doesn't matter what other people do. It matters what makes you happy and - strangely - money in the bank seems to be criticised by many people. Possibly due to recent history with low interest rates.

But also, I'm wondering what you'd pocket as profit and then have for investments etc. if it's a lot, and you won't miss your home, then it's a good idea IMHO.

I'm impressed you managed to get such a house at 38.

I am! 2.5 years youngest will be off to Uni - mortgage currently £128,000 - house worth around £280,000 I am moving back to the north west where I will be a cash buyer and mortgage free but hopefully still be working PT in a reasonably paid job - I can't wait!

I'd certainly consider it.

Next time a family member says it's a stupid idea, ask them for a gift of £20k.

I was in a similar situation in 2023 ... I downsized, became mortgage free and it's great. I never appreciated what a millstone even a small mortgage can be. Downsizing also meant £250/month less running costs, plus £500/month mortgage. It's like giving yourself a pay rise. Definitely opens up more options.

Have you worked out how long you will take to pay off with the overpayment and a £50k injection? That might make you feel better. Agree it’s really unusual to have paid off a mortgage by your age. I say this as someone who paid off their house at 42 by buying a small place and overpaying a heap because I also hate any debt even mortgages but one I ADORE and I am likely to upsize at some point again with a view to pay off fast. Am aware I could have made masses more money by stretching myself but it’s not worth it.

Would you compromise? A smaller house but not completely mortgage free and one you could pay off in maybe 5 years? Don’t end up in a house you don’t like just to be mortgage free but it does sound like maybe something smaller is better that you can aim to own entirely sooner.

Also what else will you get from this? What will you do with that money post paying off? That’s the most exciting bit!

If most people you know have paid off their house by age 38;you must know some very wealthy people. I'd say that's very unusual. Your mortgage doesn't seem particularly high or unusual.
But having said that if you don't need or want a big house then downsize.

'Most people I know don't have a mortgage by now' do you know people your age who have paid it off?

Could you get a lodger to help you overpay quickly?

Do you mean don’t have a mortgage YET, or don’t have a mortgage as have paid it off?

I couldn't get the past the comment that everyone your age is mortgage-free. How is that possible? I have the same size mortgage at 46 and I have a couple of friends repaid theirs through inheritance recently but most will have theirs until late 50s at least.

I would do it.

I sold my 1 bedroomed flat when I was 47 I was almost mortgage-free at that point.

I moved to a much cheaper area and set my heart on getting a 3-bedroom house, which would have meant borrowing about £50,000.

In the end, I settled on a 2 bedroom, which I bought outright. It's perfectly big enough for me, fairly low-maintenance in terms of council tax, heating costs etc and means I have a lot more disposable income at the end of the month.

If you can still get an offset mortgage (not sure) you could look at offsetting the £50k against the interest. That with the amount you are overpaying you should reduce the the mortgage quicker

I think getting advice from a financial advisor who has experience with mortgages might be a good idea but ultimately if you would be happier mortgage free that that is the route to go

I absolutely love being mortgage free. I could sell, get a bigger house, more space but it would come with a mortgage & I just love the freedom of my wage being for bills & the rest for me.

I can't see myself bothering with the upkeep of a 4 bed if it were just me, quite apart from anything else.