why is a mortgage such a normal thing?

tylerjames

the impression i get is that a mortgage is an acceptable debt, whereas other debts are not.

why is this? i have a mortgage, but looking back i think i would have been better off just saving money and buying a property outright once i had enough.

the amount i am paying a month in interest vs capital repayment is crazy!

so i am here just wondering if anyone else agrees and if there are people who refuse to get a mortgage, and see it as another unwanted debt?

ACG

A mortgage is paying for something your living in. If you didnt have a mortgage you would still have to pay to live somewhere.

tylerjames

yes but you could be a lodger if you were single, or rent a one bedroom place if you are a couple. this would only be about £300 per person and you could still save a lot every month.

Thrugelmir

tylerjames wrote: »

yes but you could be a lodger if you were single, or rent a one bedroom place if you are a couple. .

People prefer a place that they can call home. As it offers security, a bolt hole that can be personalised.

Renting is a different proposition.

ACG

If thats the case you can buy a cheaper property and take the mortgage over a longer term where the repayments will be £300 a month.

Renting will always be dead money. Buying will cost you less in the long run, give you something to pass on to kids, you dont have to worry about landlords wanting to visit once a year to check up on you and if you want something fixing you can do it, not rely on a cheap !!! landlord who doesnt want to pay a penny.

Wutang_2

ACG wrote: »

Renting will always be dead money.

Why do so many people on here say this??

HappyMJ

Wutang wrote: »

Why do so many people on here say this??

Renting a £150,000 house at £700 pcm and earn interest at 3% on £15,000 deposit and after paying 20% tax leaves you with £30 a month...or... A mortgage on the same £150,000 house @ 90% LVR 4% interest is £450 a month plus buildings insurance and maintenance.

A part of rent is dead money especially whilst interest rates are so low.

getmore4less

tylerjames wrote: »

the impression i get is that a mortgage is an acceptable debt, whereas other debts are not.

why is this? i have a mortgage, but looking back i think i would have been better off just saving money and buying a property outright once i had enough.

the amount i am paying a month in interest vs capital repayment is crazy!

so i am here just wondering if anyone else agrees and if there are people who refuse to get a mortgage, and see it as another unwanted debt?

In the case of mortgages it is "good debt" in that it is asset backed so the net position is no debt. (except some people manage to mess that up.


As for other points.

Renting is no different to renting money to buy somewhere to live.
(different additional costs to consider)


Rather than renting rooms to not have a mortgage, the smart people rent rooms out to help pay their mortgage, or just happy to pay for their extra space and privacy.

As has been pointed out it's not just the financials, which are relativley easy to quantify, that are relevent there are soft issues that help determine what is right for different people.

mobility, security, income risk, choice, investment, job security, relationships, kids...............


One factor in the lifetime of living in places that a lot of people don't factor properly is the costs of moving, it's a lot cheaper when renting,

Aiming to have a low number of owner based moves is critical to keeping the total costs down.

Dave_Ham

Whilst I acknowledge the argument, it is only an issue whilst there is little or no capital appreciation in property.

Go back 5-10 years when property prices were rising much quicker than the "value of £ money" and ask someone who bought a house for £35k, with a 95% mortgage if they made a good call or should have saved for 10-15 years?

The example is applied a bit thick, but hopefully take my point.

barbarawright

tylerjames wrote: »

yes but you could be a lodger if you were single, or rent a one bedroom place if you are a couple. this would only be about £300 per person and you could still save a lot every month.

You clearly don't live in London. You'd be lucky to get a room in a shared house for much less than £500 - a one-bed might well be £1200 a month. What would you have to earn to save to buy a flat (cheapest one-bed c£170,000) while paying £500 a month rent?

Wh05apk

[QUOTE=tylerjames;54433945
why is this? i have a mortgage, but looking back i think i would have been better off just saving money and buying a property outright once i had enough.

[/QUOTE]

Unless you are savings a small fortune each month, I doubt if you could ever save enough, even if you were saving £500pm , in 15 years you might save £100,000, what would that buy you in 15 years time?