How do you feel about paying a mortgage

[illovefisk]

I'm grappling with this a bit and would like others perspectives.

We have a big mortgage on a small 4 bed z2 London house with a tiny garden (not complaining about the size just factual). The mortgage is just over double my income and very low loan to value ratio so very small risk of negative equity. It has increased in value.

What I'm struggling with is the feeling that maybe we should cash in and move somewhere cheaper. I do feel the strain of cost of living and I can't work out whether we just suck it up and know it will get better as we pay down the mortgage or downsize to a flat. 2 primary age DC.

Pros

• because it's close to work our commuting costs are very low
• location means no need for car and the cycling and walking helps with fitness
• short commute means I have more time with kids in morning and evening
• the kids each have their own room and there is an office (DH and I wfh 3 days a week)
• it's a new build so very energy efficient (albeit less attractive than a period property)
• because its a house we don't have leasehold or service charge worries or any neighbour noise/ impact
• close to a number of good schools
• close to central London and nice green spaces

cons

• big mortgage with 20 years to go
• not an attractive property although very well built and comfortable

I know no one has a crystal ball but what does sensible future planning look like exactly? We have pensions, rainy day savings but not much. We live ok. I can't tell if this is the right thing to spend a big chunk of earnings on or if we should downsize and save / invest more.

Background to all this angst is that we are both from very working class backgrounds and don't have anyone to advise us really.

I'm not sure if you mean you take home £100k, so over £8k a month, or your gross salaries are £100k so roughly £6k take home but either way you should have enough money to live well and make investments with a mortgage of only £1.5k a month.

You have the absolute dream investment property with the only downsides being that it isn't very attractive and it costs you £1500 a month. It would probably cost you £4k if you were renting it!

Absolutely not.

I value space / serenity and my environment too much.

that said it’s a personal choice.

I'd definitely hold on to that asset and would be overpaying the mortgage each month, unless you are still on a really low rate which is less than savings or investments would return.

I’d definitely not be moving to a flat and as@BarelyLiterate has said, I’d be considering moving up the property ladder. Property is a significant investment and generally is an appreciating asset.

I'd probably stay put, but make overpayments towards the mortgage if possible (beware of early redemption penalties). That way, if / when mortgage interest rates rise, you'll be in a better position

Overpay, so you finish in 10 not 20 years then sell up, buy something smaller and launch tge kids with the rest or blow it.

If you move to a flat now you save the £1.5k a month but would that saving keep pace with the potential increase in house value vs mortgage?

In your shoes - as someone from a piss poor background where there’s zero family money or understanding of money - and if your thought process is solely based on money concerns, I would hold on until you max out the potential increase in value vs mortgage (never an exact science but a 4 bed house with garden in Z2 will likely always hold value it’s just the pace of increase that varies) and then downsize. Still mortgage free but with a bigger lump sum which could then be used to set kids up.

If you want to leave London that’s a different issue but you have to factor in if you move and hate it, you will never regain a foothold on 4 bed house in central on your income. You’d struggle to get a house in zone 5/6 currently.

You seem to have a the ideal set up right now and you’d be foolish to let that go due to unfounded panic.

If your children are primary age I would value the space and continue to pay the mortgage, overpaying if possible.

You aren’t committing to a 20 year mortgage. You can sell and downsize in 5 or 10 years (obviously you might have to pay some kind of early repayment penalty depending on your mortgage agreement, but I haven’t heard of anyone being trapped into a 20 year mortgage by this).

From what youve said, I'd stay where you were if secondary schools are good.

Then downsize when kids have grown up and properly cash in.

200k is a v low mortgage in london for a 4 bed!!
It would be 2 or 3x to rent same property as your repayments
Pay it down
Enjoy
Sell property when kids leave home and go where you want

Thank you all. I feel desperate to be debt free but I think I might be looking at it wrong. I agree we could downsize when kids leave and free up money that way.

I do think it is a good idea to plan to be mortgage free in 10 years (late 50s) so not still paying a mortgage in late 60s.

A low mortgage is v different debt to a vast credit card debt or car loan
You are paying to live somewhere which you have to do anyway and have an asset

What have you been doing with your spare income prior to this? A 200k mortgage vs 100k income is tiny.

Everyone says
I own my home
When they mean
I am paying a mortgage
I e paying a mortgage is not synonymous with "debt" in the way credit card debt is

With a relatively low mortgage it is not a bad way to see it (huge mortgage vs income is a different story...)

Surely the house is worth at least 1m?

You need to stop looking at a mortgage as debt. It’s an opportunity to live in a house that serves you well. There’s good credit and bad credit and a mortgage is generally on the good side. It’s not like you can’t change your mind, if you decide you want to downsize in the future then you can and it would clear your mortgage or significantly reduce it.

Surely you can appreciate though that your post is a bit tone deaf? You haven’t answered the question about how much you actually take home each month but even if it’s on the lower end of those estimates at £6k then having a £1.5k mortgage is not “a big mortgage”. Plus you’re in London! If you think it is then you’re really out of touch.

I would stay and downsize later on to a cheaper area. I wouldn’t move to a flat. I would consider moving to a bigger similar priced house in a cheaper area.

I don't normally say horrible things on anonymous forums, but I think you need a rude awakening. You are in a ludicrously good position and you are not reading the room at all. I suggest therapy as it appears your back story of poverty is playing a role in your neurosis. Then educate yourself on personal finance. Get some good finanicial planning in place to fulfil your life goals.

How much is your house worth? 4 bed in z2 near outstanding schools. I bet you're a networth millionaire 🙄

Your mortgage amount isn’t huge between 2 people, do you like the area you live in?

Weird post. Your house has to be a million plus with a tiny mortgage. Just overpay it and you will be free very soon. What ate you doing with the other 6k a month otherwise?

Like most, this is quite difficult to get my head round.
You are fortunate to be in such a position.

I haven't run it through a calculator but am surprised that a £200K mortgage has a £1.5k repayment each month, but even so, if you have a £100K join income, then that is a ridiculously small mortgage (whether that is your gross or net income).
I can see why people are questioning if you are just bragging.
In your position, I would be overpaying regularly to cut big chunks off the mortgage.
Can't believe anyone would seriously be asking if they should move (with all the cost and stress involved) to a flat, in your postition.

Hi all

I'm hiding this thread now. I'm not required to 'read the room' on an anonymous internet forum. I don't talk about this in real life because as I've said I'm not actually complaining about our set up.

To those who've engaged in good faith - thanks it's been helpful.

To those who've said tone deaf and weird I would ask you to consider if you think your responses are in the spirit of this forum. Do you think you've been helpful to a fellow parent? I don't really care if you don't like the parameters of my problem. You don't know anything about my background or current set up beyond what I've chosen to share and perhaps there are reasons why I feel worried that you don't know about.

Anyway should you choose to respond negatively I won't see it anyway.

I grew up poor and, as a result, very risk averse. We did the opposite to you- went from small 3 bed we were about 8 years from paying off, to a larger 4 bed with 15 year, higher mortgage. But the kids needed space and I didn't want to regret not taking a risk.

We, or I, cos dh is a lot older so will probably die first, will have to downsize at some point. Probably won't be able to help kids with uni, but then, I don't actually know any parents who can/ do.

I was going to post earlier but got distracted and have now seen your update.

No, I wouldn't move into a flat to be mortgage free and your pro list is very strong so I'd stay and overpay the mortgage. You can always downsize in the future. Unless you have other debts what is the other circa £4k being spent on?

For perspective I grew up poor & no inheritance coming my way. I have a 3 bed mid terrace in Surrey where I had to take out a mortgage of over £300k at almost 40. I'm happy to stay here to pay off the mortgage early (instead of 68 which is my current final payment date) rather than upsize, but I wouldn't move into a flat to have a cheaper/no mortgage.