Should I Downsize To Pay Off Mortgage ?

dorisday

stay if you can afford it without any great sacrifices. If needs be in the future much easier to sell on than a detached with similar others.

ShineOn

Move!
(Sold the £390k house 3 years ago and bought a new one for £300k. Next week we pay off the last bit of the remaining £30k mortgage and will be completely debt free. Yippeee!! Peace of mind is worth its weight in gold.)

Peelerfart

Move - and then some more typing because,

"The message you have entered is too short. Please lengthen your message to at least 10 characters"

DCodd

gaz1000gaz wrote: »

Hello from a newbie to this great site. I hope you can help me.

We own a house worth £425,000 and a ski apartment worth £60,000. We owe total mortgage of £225,000. Our mortgage payments are £2500 per month (fixed rate mortgage at 3.5%) over 9.5 years remaining.

We are not quite struggling to pay the mortgage, but we are both self employed in the property market which isnt paying much bonus at present !

We are thinking of selling our large 5 bed barn conversion and buying a 4 bed detached modern house in the same area we currently live. We will walk away with £250,000 clear after fees we hope. 4 bed detached houses in the area go for £230-£250,000 so we could pay cash - hopefully.

It really seems to make sense to become mortgage free, and save £2500 pcm on mortgage payments, just means buying a smaller house again, but we only have 2 children - so should be ok.

We have worked hard to live in our current house of 5 years, and we are aged 35. It feels like a backward step, but it does seem to make sense. I hope the feeling of freedom will outweigh the negatives.

Can anyone help me with your thoughts please ?

Thanks for reading.

Regards

Paul

Purely my thoughts:

I would sell the Ski Apartment and down size.

You save £30k PA and have £60k from the Apartment.

As I'm sure you know, as you are in the property market, any recovery in the housing market starts at the bottom, so when you realise that the pries are moving in the sub £200k market, you put yours on the market with a small profit, you will stll have the £60k in the bank plus your £250k+ from your smaller house and probably £30k +saved from your Mortgage payments.

thats £340k + minimum to spend at the start of a rising market and still No Mortgage!

chirpchirp

I'd sell the apartment and keep the house, perhaps increasing the term to keep it affordable.

That's because I'm a home bird and don't really enjoy going on holiday. I'd rather be in a my dream house than have the chance to go away to my own apartment.

gaz1000gaz

Great advice from everyone, many thanks.

Got 2 estate agents coming tomorrow to value ours. Hopefully the value will be £425,000, if not, cant consider the move as we would have to take on another, but small mortgage.

Keep you posted !

Thanks

Paul

JA1000

Where is the ski appartment for £60k - Bulgaria?

I would stay, as you say times are not great at the moment and you are still managing to considerably overpay your mortgage, so when things do pick up you will overpay even more. We are only talking less than 9 years which is worth hanging about for.

What would you be doing with the extra cash - as most people end up doing, a BTL and another mortgage.

gaz1000gaz

There wouldnt be any extra cash. My mortgage is for £225,000 including the apartment. The apartment is a ski apartment in france and gives a gross income of £7k per year so it pays for itself.

Many thanks

Paul

getmore4less

Mortgage free is part of retirement planning

you need to consider the bigger picture.

What will you do with the surplus income?

What are the plans to replace earned income?

THRIFTY_GIRL

gaz1000gaz wrote: »

There wouldnt be any extra cash. My mortgage is for £225,000 including the apartment. The apartment is a ski apartment in france and gives a gross income of £7k per year so it pays for itself.

Many thanks

Paul

In that case definitely keep it!!!:o....htought it was just something you used for holidays.....

There will be extra cash....the £2,500 pm that you will save by not having the mortgage...Q is what will you do with that??