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 have a DH and our mortgage is around £360k. Payments plus taxes (not UK) around £2400/month. Household income around £200k. House value a little less than £1m. If you’re managing £500 in overpayment that sounds pretty good but as a single earner household, I’d probably put that £500 into building up a bigger emergency fund. You should have 6 months min and I’d probably aim for a year as a single earner.

I think framing it in 2 ways to reduce anxiety would help me: 1. Can you comfortably afford lifestyle, even if interest rate goes up 2. Do you have a good back up/emergency plan. It seems like you’re set on 1 so I would work to improve 2.

I’m 36, single and owe approx £177k on my mortgage. Brutally honestly, does the weight of carrying it on my own haunt me? Yes, but I also know that getting on the property ladder on my own without any family help was a big achievement and so I try on a daily basis to be grateful not terrified!

I think some of this is probably displaced anxiety from becoming abruptly single but I promise you will be ok. Take a breath, keep overpaying and review in a year when you have a better idea of how things work alone.

I’m 32 and our mortgage is 260k. What’s the alternative when houses are so expensive?

It's OK and perfectly normal to feel financially vulnerable after a break up. I've taken on two mortgages after each of my divorces and it is scary knowing it's all on you. But you seem to be doing well and can keep your head well above water. You're doing a great job!

I understand your anxiety even if it’s not entirely logical. It’s really scary to suddenly be solely responsible to put a roof over your child’s head with nobody to fall back on. I am in a similar position but as long as I don’t become long term unemployed I am OK with the monthly outgoings too.

What I would do in your situation is hold off on the overpayments on the mortgage for a year or so until you have a bigger buffer. I would possibly also sell the car and buy a cheaper one cash so you have one less loan to pay off.

I'd be delighted if my mortgage was only £220k at age 40.

Seems like a fairly typical mortgage - dare I say, small even - for a single person in their mid thirties. I'm a bit older that you and owe about the same; most of my friends owe even more. I'm not saying that because I think it's a 'good' thing - it's just life and property prices are far too high.

It sounds like you can comfortably afford the repayments, plus you have savings, plus you over pay, plus you have a lot of equity. I'd say you're in a significantly better position financially than most 36 year olds.

As for whether you downsize to reduce your mortgage, that depends on your priorities in both the long and short term. And you'd be best to seek independent financial advice about that.

What this sounds like to me is that you've had a huge amount of change recently and now you feel anxious rather generally; the mortgage is just what your anxiety has fixed on for now.

My advice is to seek some support. Perhaps from your GP but IMO more helpfully from a therapist. I've had various therapists over the years and they've (mostly) helped me enormously with big life change stuff.

We owe £770 and are in our mid 40’s

You’re fine! I’m 40, have £320k left and it’s just me. I haven’t hugely overpaid but I could a little, I defo will later on when the mortgage amount is lower but it went up by £200 when Liz Truss fucked our economy.

Don’t create a problem that’s not there. You own a house and you can afford the repayments. That will do for now.

when things settle down a bit and you want to downsize to reduce your burden then go for it.

Once you can afford it each month then I wouldn't worry too much

I tell myself i am lucky to have a mortgage/a house. I owe just over 200,000 and am just a bit younger than you. It's far better than paying a landlords mortgage in rent

This sounds pretty normal to me for a 40yo. As long as you have a sensible plan to pay it off before you retire, you're likely to be significantly better off there than renting, particularly if house prices rise. If you're making overpayments already, you're in a good position. Just make sure you do keep some savings back from the overpayments to cover any unexpected expenses, to make sure you can cope with any mortgage rate increase when it is next renewed, and also to make sure that you enjoy life with your child - take the holiday, make some memories - more important in the grand scheme of things than taking another £1k off the mortgage with an overpayment.

Stupid to overpay cheap mortgage if car finance interest is higher. Pay off car, then overpay mortgage. You’re doing great.

Same here, and our IO payments are currently crippling us 🫣 - this is not irresponsibility on our part but crappy Covid/COL issues and the obvious interest rate hike.

OP don’t panic, think longer term

Oh bore off.

OP isn't responsible for the worlds feelings.

Completely depends on how much you earn

I can totally understand your worry but you are not 40 yet and you sound like you have things under control

but a huge break up would rock anyone’s confidence.. think of it this way, people are living longer and earning for longer. Give yourself 12 months to see how things pan out. Don’t do anything rash

For me OP it would depend on lots of things. For example Do you get maintenance (if not 50/50) for your child?

Would you want to take your child on a lovely holiday every year that you can't necessarily save up for (travel is very important to me but not for everyone).

Could you buy a smaller place in your preferred area for a realistic sum?

Or is it just about not wanting the mortgage at all which I completely get!

It is not tone deaf or insensitive in the slightest!

I can understand why you’re worried about owing that much money now that you’re on your own. My first mortgage as a single parent felt scary just because I had to manage it all on my own. It is daunting at first when you find yourself as a single parent but as many have already said, you can definitely afford it without scraping by. Maybe ease off the overpayments until you’ve got a rainy day fund that you feel more comfortable with and then you might not feel so anxious.

If you make one extra monthly payment a year you can significantly reduce the payment period.
Try check your options and move lender to a lower interest rate so your payments work more to reduce the lump sump.

Don’t know where you are but that isn’t a big mortgage for London area.

I would consider making money on AIr BnB or short term lettings website. There are courses on how to do this and you dont need to own your own property. I started 2 years ago and its seems to work well, but the hardest part was just because of the fear of making mistakes and losing money. You may have seen what I'm talking about on pop-up ads on social media. They may come across as scams, but you have to at least try.

I mean, me and DH are just about to take out a £720k mortgage... But we can afford the repayments, early 30s so lots of working life left, and house is worth around a million so it doesn't seem too bad to me. Surely it's more about the equity amount you have than the loan amount? Me and DH are better off than someone who owns a 200k house outright.

We could buy a house like that and still have equity left over if we wanted.

I don't think focusing on the loan amount is helpful. Houses are generally a brilliant investment for your money

To be able to overpay is brilliant, OP. It snowballs, because the overpayment comes off the capital, so with each overpayment a greater proportion of what you pay reduces the outstanding balance. There's probably an online calculator somewhere that will show you how much quicker it will be paid off.

And if you can afford to overpay, the repayments must be affordable, so I really don't think you need to worry.

I felt just the same about the amount I owed when I had my first mortgage. It was 1982, and I borrowed £24k, but that seemed like a huge amount then.