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.

At least you have some savings because you have to make sure that if you either lost your job, or were too ill to work, you are still able to pay the mortgage. You should perhaps consider Mortgage Protection Insurance which can kick in when your salary stops or reduces if you are ill or injured, or if you become unemployed.

Some people are being really nasty. Of course you are worried. You have the sole responsibility now to keep a roof over your child’s head and food on the table for the foreseeable. If you get sick there is no safety net. Who knows what the housing market and interest rates are doing when you come to remortgage or if have to sell up. People can be so nasty.

I’m a few years older than you with a similar mortgage. 3 kids. I get it, but ultimately I have a nice house (albeit a bit small) and the lady next door pays twice the amount of my mortgage in rent for an identical property. It’s an investment which you can live in and it is increasing in value even if it’s too slow in your mind.

You’re in a great position and it’s great that you can pay down additional money on the mortgage. Just stick with it, one foot in front of the other and you will get there. You’re doing great mama!

You overpay by 500 a month, 6000 a year? Sure 220k seems like a lot compared with that. Although your regular mortgage payment will be paying down the principal too. Actually if you can not only afford the regular payment but afford to overpay, I don’t know what you are worrying about. What matters is not the total amount of debt but the ratio of income to outgoings, and your ability to service the debt. And you seem to be in a pretty good place.
You say the house hasn’t risen much in value? But if you downsized you would limit your capital gain even more.
if you are thinking of downsizing does this mean the house is a bit on the big side for your needs? In that position I would get a lodger before I downsized. The extra cash would be some reassurance too.

@ErinBell01
I agree that insurance (life and critical illness etc.) is a good idea particularly as a single parent. I also have health insurance including for children. The worst case for me is that I’m unable to work or too ill to look after children for a long period (or die!). I have a lot of insurance, quite high amount in easy access savings and a huge mortgage (as big as I can get over max years). I personally think this gives more financial security than minimising mortgage debt though it’s a personal decision as to what you’re comfortable with.

Just to echo what others have said, I also recommend getting good critical illness cover (if you go with a company like Lifesearch they do the hard work for you and find the best cover, you could prob get this for less than £50 a month, plus I’m sure you have end of life cover to pay off your mortgage). In the event that my partner or I am ill and can’t work (and the illness is one of 40 or so on a list) we get a big payout to cover bills / private treatment / adaptating the house / care etc, whatever is needed. Sounds extreme but a one wage family (SAHM) so it’s our biggest fear given big mortgage and bills, and savings would only last so long. We do also get sickness pay with his work but takes a while to kick in and that would still be needed to cover the basics, wouldn’t cover anything extra that I just described. We also have income protection so if one of us passed we get a guaranteed income until the children are adults

If you can mange the repayments each month without leaving yourself short I'd suggest carry on with the current mortgage. If you can downsize comfortably saving on the monthly payments then do that to save yourself the stress. either way it's what you can afford & still live comfortably. Having a mortgage will always be the most debt you'll ever have so whatever you choose going forward you'll always have that 'big' debt hanging over you.

YABU - at this rate, you are on track to paying off in 11-12 years!

You haven’t been insensitive. By the logic of ‘you’re not allowed to complain if other people are worse off than you’ then only one person can ever complain about anything. It’s ridiculous that you are getting flack for this post; it’s entirely understandable to be anxious when you are newly single with a child to look after. I’d take the advice of other posters and focus on the repayments. It’s a great idea to overpay when you can too. It sounds like you’re doing great OP.