Is being mortgage free overrated?
Discussion
To the question posed in the title, no it isn't overrated at all. It even surpasses the situation someone mentioned of having x months income in savings in case of unemployment.
When you are mortgage free a weight is lifted from your shoulders and in a way you do think differently. It allowed me, or perhaps that should be gave the confidence to say "stuff it" and do something different.
When you are mortgage free a weight is lifted from your shoulders and in a way you do think differently. It allowed me, or perhaps that should be gave the confidence to say "stuff it" and do something different.
Slyjoe said:
If you owned your house, but lost your job, would the house be counted as an asset and prevent you from claiming any kind of benefit?
As a single male home owner when I was made redundant, about the only thing I could claim was JSA, about £50 a week! If I had a mortgage maybe I could have claimed something, I don't know, but it certainly wouldn't have been as much as the mortgage payment so how does that help?
drainbrain said:
If you can comfortably afford to pay it, what's the problem? Just a n other bill like food or petrol etc etc
because your paying thousands in interest to borrow money , if you paid it off in 15 years rather than 25 you'd save thousands which you'd then have in your pocket.egor110 said:
drainbrain said:
If you can comfortably afford to pay it, what's the problem? Just a n other bill like food or petrol etc etc
Because your paying thousands in interest to borrow money , if you paid it off in 15 years rather than 25 you'd save thousands which you'd then have in your pocket.And one day I'll drop dead and the LA will pay it off.
BucksFizz said:
But at what cost? I could clear the mortgage a lot quicker if I lived off beans and rice for the next so many years.
While I’m quite a fan of beans and rice, if you keep eating them you’ll eventually grow an Emilio Zapata moustache, start wearing a sombrero, and taking siestas.When I took out my last mortgage, around 1984, I can’t recall what the interest rate was then, or how much the monthly payment was, whatever it was I paid it, regularly.
Let’s pull purely imaginary figures out of the air, and say that it was £360 p.m.
If interest rates went down, and the Halifax reduced the mortgage to £340 p.m., I left it at £360, if they went up again, (and they fluctuated quite a bit in the 80s and 90s), to say £380, I adjusted it to £380, if it went down again, I left it at £380, eventually it came down to something like £180, but I was still paying £380.
This took years off the term of the loan, and my 30 year mortgage was finished in circa 20 years.
That £380 p.m. that I no longer had to pay the Halifax, I spunked on holidays to Tahiti, Mauritius and Buenos Aires, as well as on a brand new air conditioned top of the range Black Cab, so that I could earn my corn in comfort.
So as far as I’m concerned becoming mortgage free was great.
Did it and it was great but then expanded so back in it again.
The genuine satisfaction of when it was cleared (offset net zero) was such a liberating experience.
I do however think there is a balance - you could pay your mortgage off and live an exceptionally frugal life only to drop dead the day after clearing it OR have a nice balance of sensible holidays Carsife experiences.
The genuine satisfaction of when it was cleared (offset net zero) was such a liberating experience.
I do however think there is a balance - you could pay your mortgage off and live an exceptionally frugal life only to drop dead the day after clearing it OR have a nice balance of sensible holidays Carsife experiences.
drainbrain said:
If you can comfortably afford to pay it, what's the problem? Just a n other bill like food or petrol etc etc
I don't think anybody on here has yet said 'I had a mortgage and paying it was a problem'.It's not like another bill. It's a financial ball and chain that you agree to carry for decades of your life. If you drop it due to circumstances turning against you, whether of your own making or not, you and your family could end up homeless.
Being mortgage free opens up a world of financial freedom, employment choices, lifestyle choices and importantly, peace of mind and security that are hither to denied to you by a not-insignificant financial commitment every single month.
It's not just seeing the previously allocated money sitting in your account each month, it's that PLUS knowing your home is untouchable (provided you don't do something daft).
Being mortgage and debt free is incredibly liberating. No worries if house prices drop or rise as you still have to live somewhere. Not having to fork over a big piece of your disposable income every month. I do not need or want a bigger house, nor do I want a car I cannot buy for cash. Cleared everything years ago and no regrets.
king awesome!RDMcG said:
Being mortgage and debt free is incredibly liberating. No worries if house prices drop or rise as you still have to live somewhere. Not having to fork over a big piece of your disposable income every month. I do not need or want a bigger house, nor do I want a car I cannot buy for cash. Cleared everything years ago and no regrets.
Re buying things for cash - do you actually do this Or if the deal to buy is cheaper using finance you go that route with the cash in the bank. Or is it purely a mindset cash only regardless of what the cheapest option is to procure whatever it is you want. Ie 0% 4 years credit for a new sofa bed carpets why wouldn’t you? Your cash can sit in a stock and shares isa to the same value or cash ISA should you want to clear it at any time.
BucksFizz said:
Is being mortgage free such a big deal? Does it actually change the way you think, feel, live and spend? I keep reading it does but I can't see it?
While I would love to not pay it every month I can't see how life would be so different if I didn't have to pay it? It's not a life changing amount of money and even over a couple of decades it still remains a small figure compared to how much you actually earn.
Even with no mortgage you still have to pay utility bills and protection money to your local cartel, I mean council. Plus food, fuel to get about, clothing etc., so you still need to have a comfortable income just to exist never mind live.
The outstanding mortgage is 2x my gross annual income but only 9% of my salary goes to the mortgage.
Having read all the posts on the thread so far I have to say that I wholeheartedly agree with the sentiment of your post. While I would love to not pay it every month I can't see how life would be so different if I didn't have to pay it? It's not a life changing amount of money and even over a couple of decades it still remains a small figure compared to how much you actually earn.
Even with no mortgage you still have to pay utility bills and protection money to your local cartel, I mean council. Plus food, fuel to get about, clothing etc., so you still need to have a comfortable income just to exist never mind live.
The outstanding mortgage is 2x my gross annual income but only 9% of my salary goes to the mortgage.
All the debt free types seem concerned with the huge amount they can save and can divert elsewhere etc but when the proportion of your income it eats is minimal then it's going to have a minimal impact on you to pay it off.
In my case it's about 4-5% of income (used to be half that when I worked) and is about to be paid off by the sale of the current house. Then I'll be into rental premises for a while and then hopefully another mortgage in my late 60's which no doubt LA will pay off when I kick the bucket. In my case it won't be buying me a bigger house, just a more expensive one.
Being mortgage/debt free doesn't make a whit of difference to either how I live or how I feel and never has and never will.
I take it the people who find being mortgage/debt free "liberating" aren't also saying they felt enslaved or trapped or in any way negative whatsoever when they did have these debts.
Debt's like a game. Manipulating it to your advantage is easily possible. And if you can and do then it becomes more liberating to have it than not to have it.
This mortgage free thing is definitely marmite. Some clearly enjoy it, others don't.
Welshbeef said:
Re buying things for cash - do you actually do this Or if the deal to buy is cheaper using finance you go that route with the cash in the bank. Or is it purely a mindset cash only regardless of what the cheapest option is to procure whatever it is you want.
Ie 0% 4 years credit for a new sofa bed carpets why wouldn’t you? Your cash can sit in a stock and shares isa to the same value or cash ISA should you want to clear it at any time.
That’s an interesting response. Ie 0% 4 years credit for a new sofa bed carpets why wouldn’t you? Your cash can sit in a stock and shares isa to the same value or cash ISA should you want to clear it at any time.
I’m very nearly 50 and haven’t borrowed any money (beyond mortgages) since I was 22 and that was a car loan for about £5k over three years.
I guess to my mind if you have to borrow money for furniture or a holiday or a tv etc you’ve got your priorities wrong. Some of this attitude comes from my parents - both of who were brought up in poverty (not modern poverty with phones/TVs) and didn’t like to borrow money as adults.
I’m aware this is quite an old fashioned attitude these days and take your point re making money work for you. That said I no longer live in the UK, have decent amount of cash in the bank here which earns 8.5% interest. That cash would have got nowhere near that in the UK although I do have some investments there hitting near 8% per annum.
Two properties - the one we live in here and a rental in UK - both mortgage free. I owe no one a single penny and being retired can do what we like without having to worry about servicing any debts.
Being mortgage free or overpaying your mortgage is great if you have a reasonable amount of liquid assets.
But having no mortgage and no liquid assets will be a problem if your source of income dries up - try remortgaging then to get some cash!
And has been said, the costs of running a house and other day to day expenses for many people will exceed the cost of their mortgage.
I understand the pleasure of being mortgage free but for most people it's the cheapest money they'll ever borrow & it's not the definition of financial success.
But having no mortgage and no liquid assets will be a problem if your source of income dries up - try remortgaging then to get some cash!
And has been said, the costs of running a house and other day to day expenses for many people will exceed the cost of their mortgage.
I understand the pleasure of being mortgage free but for most people it's the cheapest money they'll ever borrow & it's not the definition of financial success.
I think the OP's comments and attitude are just symptomatic of a society that's been conditioned into being a nation of obedient, compliant, little debt slave worker drones for their entire working lives (which will probably be their ENTIRE lives as the concept of actually retiring at some point becomes evermore unlikely for many people)
Desperately trying to convince themselves that paying a massive mortgage and a huge amount of interest for 30+ years just for a vastly overpriced pile of bricks is no big deal.
Desperately trying to convince themselves that paying a massive mortgage and a huge amount of interest for 30+ years just for a vastly overpriced pile of bricks is no big deal.
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