To ask you do you consider mortgage debt as such?

[Mortgagequest]

Basically, that, I have signed for my first mortgage at the grand old age of 40. I have never had any debt. I’ve never even had a credit card. And all of a sudden, I’m thinking holy crap I have debt. I mean, I’m so excited because I finally have a home but it’s a big deal all the same.
So do you consider your mortgage a debt? If you do, do you consider it a “good debt”? Or how do you feel about it?

Whilst it is a debt, I think of it as an alternative to paying rent. That's why, when people start handwringing about having to get really long mortgages I can't get worked up about it- because if you can't afford a mortgage (due to a shorter term) then you are stuck renting forever! We are 45 and FIL said in all seriousness that we must be close to the end of our mortgage, because they bought at 22 and had a 25 year mortgage. We bought at 30 and got a 30 year mortgage so we're only half way through.

I also think that the property ladder doesn't really exist in the same way as it used to any more. The costs of moving are so huge now it can be really hard to get a bigger house. Going back a few years, stamp duty was really only paid on expensive houses but now even modest flats are subject to stamp duty in many areas. Even renovating rarely increases the value of the house by more than the cost of the renovations.

I think a mortgage can be good or bad debt depending on your circumstances, the property and the economy. But I wanted, and worked, to pay it off ASAP.

I feel liberated without it but don't regret it as it served its purpose.

Not really, I compare my mortgage payment to the cost of rent. I'd pay twice as much to rent and by the time I retire I'll own the house and live rent free. The rest I see as rent.

It becomes a debt if you get into negative equity which can happen through no fault of your own. World wide economies feel very fragile at the moment.

Yes. In my twenties and thirties I thought nothing of it, the terms were 30+ years which seemed a life time away, then I turned 40 and realised this huge debt needs paying off - we have to be well enough for years to work to do so.

It’s a long story…but no I’ve only paid rent for a total of 4 years over my lifetime so far. but I’d rather be where I am now and where I was. Mortgage and all.🤣

Congratulations of your new home! I have a whopper mortgage and no, I don’t see it as debt. It’s more of an obligation. I need a roof over my head and would rather make mortgage repayments on a property that I will own, than to pay rent to a stranger. I remind myself that my property can appreciate (which it has!) and if made a few cutbacks, I could potentially start overpaying a little to reduce term/interest paid.

I consider it more of a bill, like rent

Feels completely different to eg credit card debt

I personally don't think of it as a debt. It's essential in that we all need a roof over our head. If paying the mortgage becomes an issue then you can sell it and downsize, move to a cheaper area or if applicable social!/HA. It's like when people say they are throwing money away renting. Yes you don't have the asset at the end but you are paying for something that you have no choice over.

If you are able to put ANY money by to opportunistically throw at the mortgage to reduce it - do. (Check limits on this first).

I do and I don’t.
i don’t associate my mortgage as a ‘negative’ debt in the same way that I would associate credit card debt as ‘negative’. But it is a non negotiable monthly payment that we owe. It is a debt but I suppose I just don’t see it as bad.
other than the actual amount of course 😂 look forward to not having to pay that one day!

The only debt I've ever had is student loan and mortgage. I use credit cards but they are paid off in full by direct debit each month so I don't count that.
Our mortgage is very affordable and we have a lot of equity in our home so I don't count it as a real debt as such. It's not something I give much thought to except when remortgaging or moving home.
I think if I was at risk for negative equity or the mortgage payments were on the edge of affordability I'd feel differently about it

You have an asset which is worth more than the debt so you are net positive and could be debt free if you decided to sell the property. So not the same cc debt which has been accumulated by overspending.

Yeah it's a debt and I consider it to be a heavy weight around my neck!

It is debt obviously but I consider it in a totally different way to say, a credit card? I don’t have credit card debt (use it for points but pay off monthly) and if I had as much in credit card debt as I do on my mortgage, I’d be in serious bother 🤣🤣

It’s a secured debt on an asset that will almost certainly increase in value (even if at times it dips).

It’s also not really an optional debt. Yes, I could rent, but then I’m still paying a lot each month that if I don’t pay I lose my home. And I don’t own the house at the end of it.
Or I could buy outright without a mortgage - wildly unrealistic for most people.

I consider myself lucky to have a mortgage. I could be luckier and own outright, but I’m fortunate to have been able to save the deposit and afford the payments on a nice house that doesn’t stretch us too much financially. Lots of people would want that.

I don't class it as debt in the traditional sense, because if worse came to the worse, I could always sell my flat for the same or more than I paid for. I could then repay the mortgage, start renting again and I'd still be in a similar financial position to before I took out the mortgage.

That doesn't work like that with most other forms of debt. With a car loan for example, I (generally) can't sell the car for the same price as I bought it as they lose value.

I didn't until the end of it crept into sight. Then it felt like a debt that I desperately want to be rid of. Before it was just another bill, now I'm obsessed with paying it off quicker than the few months left on it. I'm desperate not to give the bank any more than we have to!

I think mortgages are a con but just less of a con than renting. Paying interest to the bank and being advised your house can be repossessed if you miss payments. Great 👍🏾 (clearly being facetious - paying towards appreciating asset etc)

I'm just meant to be grateful I haven't lined the coffers of a landlord. Alas can't buy a house out right so we have signed with the less problematic entity.

You need to think in terms of "manageable " debt and "unmanageable" debt.
Your lender assessed your ability to pay and it's considered manageable. The moment you default on paying it the debt starts to become unmanageable.