Is a mortgage the answer?

[AnneShirley18]

Hi, I owe my parents £30,000 and while I do, I feel mentally stuck I need to move on and do not want to enter into the payment plan they suggest (very generous of them really). I own my own home without a mortgage (Northern Ireland - house was £100,000. 2 years ago) I earn about £35,000 a year. No student loans anymore, no kids, no partner. I'm pretty frugal and sensible with money but am Clueless about finance. What is my best way forward to giving my parents what they're owed? Can I release money from house by mortgaging? Is that possible for what is a relatively small amount? Thanks

Why do you see repaying your parents differently to repaying a mortgage? Would you feel better if you repaid with interest (even if they aren't asking for it)? Do you have a good relationship with them? Do they need the money back?

Do you understand that a mortgage is a secured loan? If something happened to you (accident, illness) and you couldn't make the repayments your home would be sold to clear the debt (although you'd get to keep the balance)?

If you haven't already, look at critical illness cover and ASU insurance.

Well you can do it, but need more information as to whether you should.

Plus if they don't need the money back right away, they might even be upset that you've committed to a mortgage that charges interest and that you must pay instead of them helping you out because if there was a reason you couldn't pay, presumably they'd be happy to wait, unlike a commercial lender.

What's so mentally troubling about setting up a SO to pay them £x pm until its paid off. You could even pay them interest that they'd receive if they had the money in savings if it made you feel better.

Thank you both for your replies. I have had a mortgage in the past and had no difficulty keeping up with payments. The mortgage was for £113,000 so considerably more and I managed okay. I owned a property in Manchester and moved back home to NI. While my manchester flat was on the market, a little house that was perfect for me came up for sale in my hometown. This is rare so my mum and dad acted fast and bought it for me and when my flat went through I gave them the 60 000 equity straight away. Ive paid it off when they "let me." In 2 years I've only paid off £10,000. There is always an excuse why they can't receive it and they say a standing order will "mess things up." Basically they're intentions are good, but they're very transparent! I'm the daughter without a husband who needs looking after.
What makes me feel uncomfortable is that yes they are comfortable relative to many buy that's because they worked very hard and made lots of sacrifices when we were little. I want them to enjoy retirement and have no expectations of them financially in the future.

I also have three siblings who are probably aware of the loan. I just feel I can't spend any money! Like I would like to put fitted wardrobes in my bedroom. I don't want anyone thinking-she's putting fitted wardrobes in when she still owes that money. So, where are my clothes? On a £15 open rail from argos and a kallax cube from ikea. Is just feel mentally freer owing the bank again.
I just wasn't sure what to talk to the bank about. Is it a mortgage/remortgage? Or would it be a loan since it is a small amount? Thanks again

In effect it will be a remortgage. I don't know if it makes a difference that you currently own the property outright but you could talk to a broker to see.

If £30k is below the minimum loan amount you could always borrow more and repay the excess back as quickly as you are able to without penalty.

If you get a good mortgage deal you will be able to put it in a savings account that earns as much if not more than the mortgage interest rate anyway.