To feel panic to owe this much on my mortgage?

[Seoalp]

I’m 36 and recently took stock of my finances after separating from my partner and I am now a single parent to a nursery age child. I own my home but it has an outstanding mortgage of 220k. I feel that approaching 40 this is an awful situation. I have 10k savings and a car on finance. Would you downsize to remove the mortgage? I can manage the repayments but 220k feels like SO much money to owe. I am awake most nights recently worrying about it. My friends never discuss finances at all so I have no frame of reference and feel very alone.

I think you are just in a vacuum of comparison so not meaning to be tone deaf.

As with other pp, there is no need to sell your house. Your chin is well above water given you are over paying your mortgage.

IF some financial calamity befell you, you could react by selling your house, releasing equity and down sizing. But don't do that now - huge costs and no immediate need.

In reality, just carry on as you are. When you get to retirement you assess your position then. Likely it will look very very different.

Your mortgage statement should tell you when your debt will be gone... Check what it says, if your working life will cover the duration you're fine.

If you can overpay whilst in the nursery years as a single payment - you are doing brilliantly!

I know what you mean about the figure being an issue though - we happened to take our most recent mortgage out with the bank I bank with and for some horrible reason the outstanding mortgage amount shows up on the banking app next to my current account! It is always on my mind now, rather than with our old mortgage when I'd get the statement through once a year and it was mostly out of sight, out of mind.

I'm not really sure where your anxiety is coming from here. The actual amount outstanding is irrelevant. What matters are all the other figures e.g. the monthly repayments and how affordable they are (obviously very affordable if you can overpay by £500 every month), the amount of equity you have and how easy it therefore is to weather any dips in the housing market (you owe less than 50% of the value of your home, so clearly no cause for concern there).

You say the house has only increased in value by £15k in the last 2 years - I think that is fairly good in comparison to most of the country. We had the crazy increases in summer 2022 and then it's been pretty flat for most people.

If you've got the kind of earning potential to cover these kinds of costs alone, in addition to paying nursery fees, it's probably safe to assume you have a decent level of education. So it seems likely that there's some kind of anxiety driving these worries, because they're just not rational or common sense. Either that or this is a weird goady thread.

It's not loads. I think it's pretty normal for a mortgage. It usually goes down quickly and becomes a smaller proportion of your income as time goes by.

Also, inflation erodes the value of the debt. For example, 200k today is the equivalent of around 163k four years ago.

@flipent I totally agree

I'm 48 and paying interest only waiting to be able to remortgage to capital repayment.
Won't bore you with the reasons but I'm just hoping that when I come to remortgage I have enough working years left to be able to make the payments. 🙈

Sounds fine, do you have a buffer for unexpected expenses, boiler etc?
If not I might save something rather than overpaying for a bit

Its a monthly bill which you can remove at anytime if you so choose (downsizing etc). If you can afford it why on earth are you worrying? keep paying it until you run into a situation where you no longer can and if that happens then worry about it. Every month you pay into it is an extra months investment.

I think you're probably misplacing you anxiety on this one.

So you can afford the repayments and you have more than 50% equity?

YABU to worry about this. You're in an enviable position.

No I don’t have a buffer, only just been in this situation, the break up was last month. I have not meant for the thread to be insensitive and I am sorry if it came across that way

You are doing well with equity in the house and regularly overpaying by a significant amount (£6000 a year), which will reduce the mortgage more quickly, and therefore the overall sum paid by the end of the mortgage. I would focus on the progress you are making and the nice lump of equity you have. Many people would count themselves lucky to be in that position.

I wouldn't remove the mortgage. It can be useful to have if you ever want to borrow money at cheaper rates than other forms of loans. It is quite easy and convenient to increase the loan should that be needed and it is nice to know the facility is there.

No need for you to worry and lose sleep.

I’m 40 and have £400k mortgage remaining. I get that you’re panicking, but your situation doesn’t sound that bad at all. You can afford to overpay, most people can’t.

what are house prices like where you live? could you buy something decent for the equity which is large and good enough for your needs. A 500k house round here is massive and 280 would buy you a lovely 3 bed with garden but I appreciate it's different elsewhere.

I hate debt so get you.

I won't criticise you as £220k is in isolation a scary number.

But remind yourself that you don't owe that in isolation.

A) it's offset against a £500k asset. You're £280k up. Even if house prices crashed by 50% (they won't), you'll be in the black.

B) you'd have to pay rent if you didn't own the house. You'd be no better off every month, but at least the payments you make are bringing that balance down.

You said in your original post that you have £10k in savings - this is a buffer and it is bigger than others will have.

You are in a good position, but I'm not sure you understand how good a position you're in.

I would suggest reading up, or asking questions on the money board to get some advice.

Either that or this is a humble brag which will just upset people.

You still have 27 years of work left at 40 OP..
So not doing too badly at all.

That's how much we have left on our mortgage, only a few years younger, planning a second child (I'm not a single parent so am working with 2 incomes). We are looking to extend our mortgage to do some necessary renovations, so will owe more like 270k rather than 220k soon.
Your equity is significantly larger than ours though! It's really great!
Imagine the costs of selling for somewhere smaller - moving fees, stamp duty, solicitors fees, probably an increased mortgage rate, not to mention the stress and hassle involved. The benefit you'd get in having a smaller mortgage would probably not be as much of a relief as you might be imaging now.
Personally if I were you I wouldn't be overpaying the mortgage until you had significant cash savings for emergency. That's just my personal preference/opinion. Money tied up in your house is useless if you suddenly need to replace your boiler, repair your car, which can cost thousands. Even if it saves you some interest in the long run on the mortgage, personally I highly value accessible savings.
Have you considered using some of the overpayment money towards income protection insurance or something similar if you are particularly worried about being able to pay the mortgage?
We don't have this type of insurance as we put money towards our emergency savings every month anyway and keep it above a certain level.

I'm 39 and owe £210k on my mortgage. I feel the opposite - proud to be on the property ladder on my own (with a house with approx £100k equity in it). At some point in the next few years this will change as me and DP will be buying together but for now I'm just pleased I own my own home and can afford the mortgage repayments!. Also, half of my friends are renting and will never be able to buy a house... I would rather be in my position. Plus you can always sell a house if needs be - it is an asset after all.

I am in a similar position as you (except my 2 are school age) and I personally don't think you are being insensitive at all. Just because other peoples challenges may feel bigger to them than yours, doesn't mean that yours are not valid, you are the one in your life. I can see how it feels like a lot, I'm guessing you took on this mortgage with your ex and weren't planning on paying it all on your own. That's not to say you can't (it sounds like you have worked hard and done well in your career), but its just not what you expected, and its a big change and will take time. And anxiety around interest rates etc, who knows what the next government will bring, so lots of uncertainty.

But there are different types of debt. I was always taught that not all debt is bad, and a mortgage that you can afford isn't bad debt. I don't worry too much about how much my property has gone up as I have no intention of selling/moving. I focus on this being our forever home, doing it up as and when I can afford to (needs lots of work but the location and size was perfect). If you sold and rented would likely cost you much more than your mortgage, with no security.

Soon enough your child will be in school and your childcare costs will be much less, so maybe try and focus on the short term and look to that point rather than many many years ahead, if you can make it to there financially, then the rest should hopefully be quite smooth sailing

The amount you owe is almost irrelevant, you have to live somewhere and that would cost you money every month regardless.

Of course you have a buffer. You're overpaying your mortgage by £500/month. There's your buffer.

Just because other people are worse off does not invalidate the OP’s feelings - the fact that it is manageable for her now, does not mean she will never have to worry. That was an unnecessarily nasty post

I know exactly what you mean but you need to mentally offset it against the lovely house you live in. Work out how much rent you would pay over the next 25 years on the same house and at the end of the 25 years you would have neither the money or the house!!

It sounds a lot but it will keep going down AND you have an asset

Oh, and there are some properly nasty people on here that you should completely ignore....

You are in a very fortunate position and have nothing to worry about.

I understand the anxiety a sudden change in circumstances can bring – my husband died suddenly when I was 36 and our daughter just 2 – but it's important to focus on the bigger picture and appreciate the positives. I had to sell my home (at a loss) when DH died because I couldn't afford the mortgage alone – but I downsized and am now comfortable, and feel extremely fortunate. Despite not being able to afford to overpay my mortgage and having far less than £10k in savings!