Pay off mortgage...or buy a new house?
in Mortgage-free wannabe
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However I do fully respect those who pay off their mortgage, and think it would be lovely to have no financial restraints.
Thanks for your time
We did a similar thing last year. Had a £30,000 mortgage and could pay it off easily within 5 years. Deliberated for over 2 years pros and cons of moving. Made ourselves quite miserable in fact.
Our mortgage is now 4x that amount (wow - looks terrible in print!!), but we now have our dream home - a large detached four bedroom house, bags of space, superb, quiet neighbourhood. Quality of life is without compare. Absolutely no regrets whatsoever. Never been happier.
If you can afford it, go for it and enjoy it!
We're in a similar situation. We have £23,000 left on our mortgage which should be cleared within the next 2 years. However we are now looking at almost x6 that in order to move from a 3 bed semi to a 4 bed detached in a better location.
It is nerve racking but we feel that if we don't do it now (whilst we are used to paying out a large chunk of our income in mortgage payments) we never will once we have got used to having the money again.
At least doing it now whilst our children are still small means that by the time they have grown up and no longer need looking after; we'll be mortgage free, in our dream house, and have enough ready cash to be irresponsible again!
What rot, I am the opposite of stifled. People are all different! Some of us just hate being in debt, it isn't rational, it's emotional, but it feels really great to be completely debt free. In my case I paid a nominally £1000 a month mortgage off at £2000 per month, it was soon gone, but most of the £2000 per month carried on going into savings which built up to a good amount for moving onwards and upwards in only a few years (this is a gross simplification but it illustrates the point and the numbers are obviously scalable). It was't a case of 'Damnation, because I paid all that money on the mortgage I had to save and save and scrimp and save to afford a better house' but 'Blimey, without really trying I've got all this money saved up already, I can afford to move on'. It has made me feel I have much more freedom of choice, not less. The spectre of negative equity can never haunt me again (I remember 1995!) and I have chosen to work fewer hours and enjoy myself more.
However, going back to the OP and her question, I also believe, as long as your long-term earning prospects are good, to be truly happy (emotions again!) you need to get a house you really want to live in before you concentrate on reducing the loan.
But you don't have to go for the full 25 years again. Play about with the figures and choose the term that allows you to pay off the mortgage at a rate that's comfortable for you, doesn't cramp your lifestyle, and leaves some accessible savings for unforeseen circumstances. Guess what, Sloppy, we sing from the same hymnsheet! (Could be in an Offset Mortgage but the arguments pro and con are well covered elsewhere on these forums so I won't rehash them here.) Overpay when you're feeling flush but don't live like paupers either. Moderation in all things.
Oh and BTW, am not a guy - and I was all up for a new mortgage to get a more stupidly expensive house when we moved (living in Oxford is our dream), it was himself who put his foot down. We're all indivduals, not stereotypes.