Mortgage free Vs Upgrading
Discussion
Bit of an update. Went to see the property that has peaked our interest. We're getting ours valued this week so we know where we are. We've no idea what ours is worth, and depends what the sellers would accept. Not getting ahead of ourselves, it's been on the market a while. I've come round to the way of thinking that while being mortgage free is great, we could comfortably get a 15 year mortgage, over pay when we could and be mortgage free again by our early 50's.
We were mortgage free 11 years ago at 40. a really nice detached house in a lovely garden but it was just too small. We did not want to move from the hamlet where we live but place round the corner had been on the market for 3 years. Triple garage, 5 beds, 9 acres. So we borrowed £270k and moved there. no regrets at all. Yes its a massive commitment but money is cheap and like someone else said on this thread its a waste of time in the bank as savings. We wont stay here forever but when we do check out we should have a nice bit of appreciation and I should be able to keep some of the land (on which I have built a big barn) for free.
a311 said:
I'd like a bigger more useable garden. It's not tiny there is a small-ish lawned area big enough for the kids to have a play kick about.....
...Something has come up locally which has caught my eye, huge gardens inc a small wood, double garage. Jobs are as secure as they can be in these times.
We were in a similar situation a few years ago, pretty much mortgage free and interms of living space more than enough for the family. When we first moved in I did have some thoughts about why are we taking on extra debt when we just became pretty much debt free, but 4 years on from moving in I cannot believe we didn't do it sooner....Something has come up locally which has caught my eye, huge gardens inc a small wood, double garage. Jobs are as secure as they can be in these times.
If you are lucky enough to have the means, and the area around you offers the plots, there is nothing like having a decent sized garden. I still cannot believe I just have to step out of the kitchen to get view like this, and when the snow arrived a few weeks ago its was like going to lapland.
If you have the job security the mortgage is just a number no one really remembers in a few years time, but memories you have with your kids will last a life time.
When you add in the fact borrowing is so crazy cheap, its no brainer to find a way to improve your family life. Yes you can save up, but time wait for no one, and ineffect the cheap borrowing is simply letting you access stuff sooner, and providing you can pay the debt back it really adds virtually no risk.
We love our garden so much we are changing the major structure of the house to ensure we can get more view/usage from it, £200K extra borrowing over 7 years fixed at 1.5% over 15 year term is £1200/month - people are spending that much on cars there days. After 7 years the debt amount would be sub £100K even with no overpayments, not a small figure a figure that means you probably don't really need to worry about interest rates and effect on mortgage payments.
So I've gone from been obsessed to clearing the mortgage a few years ago to now itching to get into more debt so we can extra building done
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I suppose it depends a little on your attitude to work. If you want to have financial independence earlier, paying off the mortgage makes sense. This then means you are never quite as tied to work as you once where given that for most it’ll be their biggest ezpxpense.
As others have said, if you are in a secure job, can live as you want, save as you need, and can afford the extra borrowing, then why not.
At the moment I want to do a loft conversion on the current place but otherwise actively do not want to move, because I’d rather pay down a smaller mortgage and break the link of me needing to earn decent amounts for a good standard of living due to size of mortgage. But that’s just a personal thing.
As others have said, if you are in a secure job, can live as you want, save as you need, and can afford the extra borrowing, then why not.
At the moment I want to do a loft conversion on the current place but otherwise actively do not want to move, because I’d rather pay down a smaller mortgage and break the link of me needing to earn decent amounts for a good standard of living due to size of mortgage. But that’s just a personal thing.
Inflation is only any good if you get payrises that reflect it.
Last few payrises I have had as a civil servant have been appalling, and now we have a pay freeze. Many people have only had a very few and very low pay rises over the last 12 years. Whilst the private sector probably don't treat their staff as poorly as my employer does, I suspect that many employers are also going to exercise some pay restraint over the next few years.
I heard an interesting bit on LBC yesterday with some finance expert who said inflation is going to be very painful over the next 5-10 years for the vast majority of people.
Last few payrises I have had as a civil servant have been appalling, and now we have a pay freeze. Many people have only had a very few and very low pay rises over the last 12 years. Whilst the private sector probably don't treat their staff as poorly as my employer does, I suspect that many employers are also going to exercise some pay restraint over the next few years.
I heard an interesting bit on LBC yesterday with some finance expert who said inflation is going to be very painful over the next 5-10 years for the vast majority of people.
princeperch said:
I heard an interesting bit on LBC yesterday with some finance expert who said inflation is going to be very painful over the next 5-10 years for the vast majority of people.
Logically inflation has to go up with all the fake money thats been pumped into economy, which makes it even more tempting to lock in debt at rates of 1.5% APR for 5 years+ now.Ziplobb said:
We were mortgage free 11 years ago at 40. a really nice detached house in a lovely garden but it was just too small. We did not want to move from the hamlet where we live but place round the corner had been on the market for 3 years. Triple garage, 5 beds, 9 acres. So we borrowed £270k and moved there. no regrets at all. Yes its a massive commitment but money is cheap and like someone else said on this thread its a waste of time in the bank as savings. We wont stay here forever but when we do check out we should have a nice bit of appreciation and I should be able to keep some of the land (on which I have built a big barn) for free.
Our situation is a little reversed, our current house is big enough for us, has nice views etc but it's a semi and the gardens could be better. If this doesn't come off i.e. the other house sells I'll be happy staying here. Other house has 5 acres, something not really known of in the local area outside of former farms etc. The house itself is anything hugely special, its big but not so big we'd rattle round in it if we stayed once the kids were out. We spent most of the time in the gardens. The wooded area is impressive, it doesn't flat my wifes boat but I can just imagine the kids get 10+ years of enjoyment out of it, camping, having campfires. We normally have to jump in the car now to get to a park or for a walk etc I'd see us not needing to leave the house much.gangzoom said:
We were in a similar situation a few years ago, pretty much mortgage free and interms of living space more than enough for the family. When we first moved in I did have some thoughts about why are we taking on extra debt when we just became pretty much debt free, but 4 years on from moving in I cannot believe we didn't do it sooner.
If you are lucky enough to have the means, and the area around you offers the plots, there is nothing like having a decent sized garden. I still cannot believe I just have to step out of the kitchen to get view like this, and when the snow arrived a few weeks ago its was like going to lapland.
If you have the job security the mortgage is just a number no one really remembers in a few years time, but memories you have with your kids will last a life time.
When you add in the fact borrowing is so crazy cheap, its no brainer to find a way to improve your family life. Yes you can save up, but time wait for no one, and ineffect the cheap borrowing is simply letting you access stuff sooner, and providing you can pay the debt back it really adds virtually no risk.
We love our garden so much we are changing the major structure of the house to ensure we can get more view/usage from it, £200K extra borrowing over 7 years fixed at 1.5% over 15 year term is £1200/month - people are spending that much on cars there days. After 7 years the debt amount would be sub £100K even with no overpayments, not a small figure a figure that means you probably don't really need to worry about interest rates and effect on mortgage payments.
So I've gone from been obsessed to clearing the mortgage a few years ago to now itching to get into more debt so we can extra building done.
Lovely gardens If you are lucky enough to have the means, and the area around you offers the plots, there is nothing like having a decent sized garden. I still cannot believe I just have to step out of the kitchen to get view like this, and when the snow arrived a few weeks ago its was like going to lapland.
If you have the job security the mortgage is just a number no one really remembers in a few years time, but memories you have with your kids will last a life time.
When you add in the fact borrowing is so crazy cheap, its no brainer to find a way to improve your family life. Yes you can save up, but time wait for no one, and ineffect the cheap borrowing is simply letting you access stuff sooner, and providing you can pay the debt back it really adds virtually no risk.
We love our garden so much we are changing the major structure of the house to ensure we can get more view/usage from it, £200K extra borrowing over 7 years fixed at 1.5% over 15 year term is £1200/month - people are spending that much on cars there days. After 7 years the debt amount would be sub £100K even with no overpayments, not a small figure a figure that means you probably don't really need to worry about interest rates and effect on mortgage payments.
So I've gone from been obsessed to clearing the mortgage a few years ago to now itching to get into more debt so we can extra building done
.
We took the kids along and the kids had a whale of a time so really got me thinking about that side of things. I'd happily live in the middle of nowhere, my wife less so. Job security is good, earning potential should increase for me in the short to medium turn. My wife will consider upping her hours once the youngest is in full time school, maybe sooner if WFH becomes a more permanent feature. bmwmike said:
Not only is money cheap but inflation also helps take care of the debt over the term of the mortgage. IMO if the debt repayments are manageable with a buffer, its almost daft NOT to take on debt to improve quality of life (new kitchen, garage type thing) or invest.
Never really thought of it that way until recently, focus was on paying off the mortgage. Could do with speaking to a good IFA if this doesn't happen.The extra money we'll have is ~1K a month. It's a nice amount but not life changing, we could reduce working hours and possibly look at other career options. What we both do isn't massively taxing for what most would class as a good salary. Otherwise I can see that extra grand getting quickly swallowed up in a nicer car and a few more holidays-things we do anyhow.
princeperch said:
Inflation is only any good if you get payrises that reflect it.
Last few payrises I have had as a civil servant have been appalling, and now we have a pay freeze. Many people have only had a very few and very low pay rises over the last 12 years. Whilst the private sector probably don't treat their staff as poorly as my employer does, I suspect that many employers are also going to exercise some pay restraint over the next few years.
I heard an interesting bit on LBC yesterday with some finance expert who said inflation is going to be very painful over the next 5-10 years for the vast majority of people.
I've tended to get 2-3 year deals from my employer of 2.5 to 3.5% so not bad. I've probably one more step in terms of promotion which would get me to the maximum level I'd like to be at in terms of reward vs responsibility. My boss retires in 4-5 years so I'd likely step into his role for another 15 isk K.Last few payrises I have had as a civil servant have been appalling, and now we have a pay freeze. Many people have only had a very few and very low pay rises over the last 12 years. Whilst the private sector probably don't treat their staff as poorly as my employer does, I suspect that many employers are also going to exercise some pay restraint over the next few years.
I heard an interesting bit on LBC yesterday with some finance expert who said inflation is going to be very painful over the next 5-10 years for the vast majority of people.
gangzoom said:
Logically inflation has to go up with all the fake money thats been pumped into economy, which makes it even more tempting to lock in debt at rates of 1.5% APR for 5 years+ now.
My wife is worried about interest rates increasing, I know they have in the past but I think government and personal debt is too high for anything earth shattering to happen in terms of rates for quote some time.
We went from a reasonably sized end terrace that was mortgage free to a build of a large 5 bed with office and a much bigger plot.
It was a shock going back to having a mortgage but we agreed it was for the best all round with a young daughter and a dog (now 2 dogs)
Lots of room inside and out for us all so we can be together or be distanced if we want.
It has eaten into our disposable considerably but honestly I couldn’t have done the last year in our old place.
Plus it’s an inheritance point for our daughter, probably.
It was a shock going back to having a mortgage but we agreed it was for the best all round with a young daughter and a dog (now 2 dogs)
Lots of room inside and out for us all so we can be together or be distanced if we want.
It has eaten into our disposable considerably but honestly I couldn’t have done the last year in our old place.
Plus it’s an inheritance point for our daughter, probably.
Gareth79 said:
If you are planning to WFH for good then each having a decent office room makes sense. I imagine a loft conversion wouldn't be a great place to spend 7+ hrs a day in.
My wife gets to work from our loft, it's the best space in the house, really light, warm in winter with all the insulation and when it's hot you get a lovely cross breeze opening the windows that keeps it cool. It's very rarely hot and too wet to open the skylights.Picked up on this bit in particular "huge gardens inc a small wood, double garage"
If you can get that, I would defo say upgrade, imagine having your own wood to run around in as a kid, camping out, making fires, treehouses etc. Having friends over to play and having a safe space to let them just roam around.
So much scope to give your kids some amazing memories!
Ditto the double garage, just think of the prospects that could give you to work on project cars or other hobbies plus potential to convert into something else, granny annex, band practice room, office etc.
I'm generally quite risk averse but £150k mortgage at your age sounds easily manageable, I say go for it.
If you can get that, I would defo say upgrade, imagine having your own wood to run around in as a kid, camping out, making fires, treehouses etc. Having friends over to play and having a safe space to let them just roam around.
So much scope to give your kids some amazing memories!
Ditto the double garage, just think of the prospects that could give you to work on project cars or other hobbies plus potential to convert into something else, granny annex, band practice room, office etc.
I'm generally quite risk averse but £150k mortgage at your age sounds easily manageable, I say go for it.
BoRED S2upid said:
troika said:
A few months on from this thread, has anyones attitude changed to loading up on debt?
Still pretty cheap. We just took out a 5yr fix at 2.18%! If it’s at 10% in 5 years I may well go the mortgage free route. We only got £11k outstanding on this mortgage.
Our cash savings more than cover this several times.
But we can't just pay it back tomorrow, as I (we) don't want to throw money away in an overpayment penalty charge.
So, looking like last payment in October or November. 2022
Going to remain here for 2 more years, in that time, we will do 3 bathroom upgrades, a kitchen upgrade, and a front porch built.
Done carefully, this should add value to our property, in excess of what it will cost us to do.
That's the plan, anyway.
Then move and repeat.
Our cash savings more than cover this several times.
But we can't just pay it back tomorrow, as I (we) don't want to throw money away in an overpayment penalty charge.
So, looking like last payment in October or November. 2022
Going to remain here for 2 more years, in that time, we will do 3 bathroom upgrades, a kitchen upgrade, and a front porch built.
Done carefully, this should add value to our property, in excess of what it will cost us to do.
That's the plan, anyway.
Then move and repeat.
I think the key might be to do it before the mortgage is actually paid off.
Once you are mortgage free it's very hard to go back to having one even though you're getting something better (in theory).
It helps that there's nothing about at the moment that seems even remotely good value.
Once you are mortgage free it's very hard to go back to having one even though you're getting something better (in theory).
It helps that there's nothing about at the moment that seems even remotely good value.
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