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?

No I wouldn’t, based on what you’ve written. It sounds like you’re fixated on the mortgage number, and more about your feelings, I would speak to a financial advisor first and also a counsellor about these feelings. Your friends and family are right about this from a financial decision perspective. It doesn’t sound like a £1000 mortgage is limiting your lifestyle or choices as you’re able to overpay £300 a month. I’d be worried this is “grass is greener” situation where you imagine a world where you don’t owed £270k (what does that really mean? It’s just a monthly payment for a 4 bed house which is reasonable really) and in this dreaming you’re missing out how much you value what isn’t just a house but your home at the moment. You sound happy with your home from a comfort perspective. Moving from a 4 bed with a nice garden to a 2 bed is a big change in everyday living. I think after speaking to a financial advisor and also your counsellor, you still want to do it, go for it!

I would take out a small mortagage to be able to afford a slightly bigger house, expecially if you will get £50k soon.

For me, just knowing I had enough equity to buy somewhere else mortgage free if needed (even if the location and house wouldn’t be quite as nice) was enough to take that pressure off.

If I was made redundant, wanted to reduce my working hours, change career etc then that would be when I’d consider selling and going mortgage free.

Yes, I agree. We have enough equity that if we ever needed to downsize to become mortgage free sooner we could do it.

OP you have one of the greatest financial luxuries- choice. You don’t have to rush to choose, every payment off the mortgage consolidates your ability to choose.

Depending on where you are you could take in a lodger you probably have the space

you can get up to 7500 a year tax free and either use that to pay off your mortgage quicker or give you some freedom

You might lose a lot of the equity made in stamp duty and fees though with such a small downsize, and also run the risk of bad neighbours, worse area, etc.

That said completely agree about downsizing to a flat, I’d hate that personally having moved from a flat to a detached to get away from the noise, lack of outdoor space and other issues, vastly improved my quality of life.

Why not take a lodger you will be able to pay more off the mortgage?

This is suggested a lot on mumsnet. A lodger isn’t something anyone in my circle of friends would have considered beyond 30. Yet is is frequently suggested here for single women.

while I absolutely understand it’s extra money - opening up your home to someone else is huge, and would likely significantly impact how OP uses and enjoys her home. I have never seen anyone here suggest a couple or family take on a lodger.

is it something you have done at OP’s age? Or maybe some friends?

I have a close friend who has had lodgers for many years never had any problem and they have always kept themselves to themselves. She is female and he lodgers have always been male. I think you can have approx £7K a year tax free

Technically you don’t owe anything unless you end up in negative equity as you have the option to sell this house at any point. Paying more off this house (or any house) is an investment, as in you aren’t spending that money (other than the interest on the mortgage) it is going against equity you build up in the property. Of course if house prices drop then it’s not been a great investment. I don’t think it’s a case of you sell now or you have to pay the entire mortgage off, you can sell at any point. It depends if you want what the current house can give you and are prepared to sacrifice the money for it vs having a higher amount of money to spend as you wish or invest in something other than property.

@burnth Hell no!
Stay where you are!
Your mortgage isn’t a tie but a way to earn you much more money in the future by hanging on to your lovely house.
Like you, at 39 had a wobble about my mortgage ( an interest only one!)
but changed it to repayment and the capital began to erode rapidly.
My mortgage shrank while property itself went up and up.

SO glad I stayed.

Your family are right, I think long term gains to be made by staying.

Sorry I haven’t read the full thread, but you should take into account what happens when your mortgage rate ends.

If you’re paying £1k per month for 30 years on £270k you must be on a 2% fix, which is much lower than what is currently available.

When it ends you will more likely be paying £1,300. i.e the same as your current total including your overpayment (so presumably affordable) but without anny more overpaying.

I’d guess that people at 38 who don’t have mortgages either inherited big chunks of cash or are bankers- Or haven’t got mortgages at all as renting ( seriously dead money).

I had lodgers too years ago- Also always male and they were never any problem.
Kept themselves to themselves- short term students .
One arrived at 17 - he’s still a friend in middle age!

I would just be sure that you can get a house in good condition for less. I bought a house that needed work and it has been stressful and costs more to get trades in.
I paid my mortgage off a few years ago and it feels great so in principle I think it’s a good idea.

I haven't had a mortgage since I was 39. I sold my 4 bed detached a couple of years ago and now live in a 3 bed semi mortgage free. I work part time and am financially secure. I'd recommend it.

I suppose the boring answer would be to make a spreadsheet of all the associated costs. Look up the sale history of your house and similar properties on Right Move/Zoopla and try to estimate how much it is likely to be worth in future, (even if this figure is quite a broad range). Then do the same for properties you’re interested in moving to. Include all the costs of running your current home, such as mortgage payments (current deal and expected future deal) maintenance, insurance, utility bills and council tax. Could you reduce any of these costs in the long-term by applying for a home insulation grant, for example? Also, if moving to a new area would change the amount you spend on transport, add that in.

Finally, include all the costs incurred by selling, buying and moving house. It’s depressing how these mount up.

At the moment I have 3 houses with no mortgages and still don't feel secure.

With or without a mortgage you still have to keep that money coming in!

Absolutely do it. We bought our first house at 19, sold it when we were early 30’s with enough equity to buy our second house plus a small £40k mortgage . We extended it twice to make it into our forever home and with saving and scrimping and overpaying we paid it off when we were 35. We are early 50’s now it’s been a relief not to have a mortgage and worry about interest rates and remortgaging.

I put YABU only because you said that at 38 most people have paid off their mortgage! That's not my experience at all.

If you would be happy in a cheaper/smaller house that you could afford outright, then I think it's a good idea. Any money that you would have been putting to mortgage repayments you can save, invest and spend on enjoying yourself now!

I think the OP meant most rent but could be wrong.

Most people have a mortgage for 25 years

However, I believe that there are now longer mortgages available

I paid my mortgage off early, which was a fantastic feeling !

It does provide greater freedom

However, there will still be bills to pay
There will be things that you want to do which cost money
Will you save into a personal pension ?

Or

You could pay off your mortgage & downsize & retire early in your 50s

Definitely definitely definitely do it! To be freed from a mortgage or reduce the mortgage is a wonderful thing. I did it myself. Do it.

Hi OP. Plenty of people do have big mortgages and for decades this has been the only option for many who have to have the big mortgage in order to eventually own the house. Obviously it’s not compulsory though so I wonder if you need to think a bit more about what your short, medium and long term plans might be before deciding.
Maybe at the moment for you it’s not that clear what your medium term plans are. Possibly in a year or two things might be clearer, life can be like this, things change. What would be your priorities in the next year or two?
I notice you say you are not likely to be in a relationship…. How do you know this? Perhaps a break up is affecting your feelings and you are seeking a change?
Making changes can give you a sense of agency but also you don’t want to do anything rash.

Most people I know don’t have a mortgage by now and this feels huge.

This seems highly unlikely for people owning houses in their late 30s.