How much debt are you in?

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Was chatting to a friend earlier who is in over 500k of debt, which she thought was ok but I think is astronomical.

Mortgage £520k
credit cards £22k - 0%
BUT savings £30k

High incomes £190 household. Debt because house Renovation exceeded budget 🤦‍♀️. Don’t feel comfortable with it. Won’t pay off savings because when mortgage so high, must maintain liquidity as buffer. Will not pay interest. Will never buy car on finance.

A house cab be sold though. That's very different to credit card debt or a loan.

It's important to differentiate between 'debt' and 'borrowing' for your question, OP.

We have maybe £20k borrowing across credit cards, but I don't really consider this as debt because it's been done strategically for bigger purchases to pay these off at 0% rate over time that I would otherwise have had to take out of investments that are growing in value. If I wanted to pay the cards' balance off tomorrow, I could easily but it wouldn't make sense.

Mortgage (if considering this) - £360k, but the value of the house is now easily double this so again if we had to sell the house tomorrow we could clear the mortgage balance.

So I therefore have around £380k borrowing, but my net financial position is very healthy with six figures in savings even after borrowing is considered, and so I definitely don't consider myself 'in debt'.

£500k for mortgage which I feel is pretty standard for people in London. No other debt

No - when someone says they are in debt k think they usually mean anything that is debt other than a. Mortgage or students loans. Any short term loan, credit card or utilities arrears

Yeah a bit distorted to include mortgage in the same category as things like credit card debt. If I include mortgage, I've got £492k in debt but if I exclude it I've got zero debt. I've probably got £700k of equity in the house though (London). Of my total mortgage payment, £1,500 is interest per month and there's no chance I could rent a similar property for anywhere near that in my area (even a one bed flat would probably be at least that much). So I would classify this is "good" debt compared to renting and throwing away that money each month.

Exactly. So do we consider their next 25 years rental payments a debt like she’s judging the mortgage?

Yes, that's what I meant, apologies if I worded it wrong.

Mortgage isn’t debt in the same sense as a loan or credit card. It is a financed asset. Unless you have negative equity you are actually in credit not in debt. If you have a 100k mortgage but your asset is worth 200k then really you don’t owe anything, your net worth is 100k.

I've technically got some student loan outstanding, but I am medically retired so that will be written off when I claim my state pension in 4 years. Other than that, no debt. Its a lovely position to be in, and there were times when I thought we'd never achieve it. But we've got a very frugal lifestyle compared to some, and I am happier to live simply than have debts hanging over my head.

None. We previously had a mortgage (at its max £650k) but recently paid off.

None 😊

I guess it’s all relative when you compare it to your assets.

Our mortgage is about £200k but we have assets of nearly £1million.

Credit card with about £700 on it. That’s it.

Mortgage by choice as the interest is lower than investments, it doesn’t make financial sense to pay it off yet.

I live in an area where a 3bed semi is 6-800k and they're not fancy. Try avoiding a big behave here. I moved out of London because it was even more unaffordable

This makes me feel better about my £6k credit card debt & 100k mortgage even if my salary is probably significantly smaller than your friend's so thank you OP!

I have no debt at all, apart from a credit card with a limit of a few hundred that I've used to build credit history and to accrue points, I use for daily spending & clear the balance very frequently.
However, I want debt! (I really want to buy my own house).

ETA I used to have more debt in the form of credit cards, loans and store cards (remember those with their extortionate interest? Looking at you, Oasis) but I hated paying interest so I worked to clear them all.

Other than mortgage, about £1500 left on a personal loan which I could pay off with savings if I chose to. And about £500 on Klarna pay in 3 which again I could clear if I wanted to. No idea about DH I know he has car finance and I think he has a personal loan and some cc debt, he's not as bothered as I am about saving / not having debt.

Good luck Thisthread, hope things go well for you!

As a mortgage between 2 people that's fine I would say! I assume you don't live in the SE or London

Ah, thank you! 😊

About £40,000 left on the mortgage and £3,000 left on a bank loan for a car. I only use my credit card for small payments to keep it active so I can use it on holidays. Try and save up for what we need. We’re not extravagant, our TV is 18 years old.

This. When you meant debt I thought you said unsecured debt. If including mortgage then this might be normal for many. Especially in expensive to buy areas.

Yeah, when someone says to me "I've got £20k of debt" I think credit cards, loans and overdrafts. Not a mortgage!

Mortgage isn’t a debt, it’s a loan on a house.