Debt-Free Definition

[Deleted User]

I don't agree that mortgage is debt. Yes it is borrowed money but it is spent on buying an asset. Unless you are in negative equity of course.

moohound

I consider myself debt free despite having a mortgage, I have friends with interest only mortgages in negative equity with no vehicle to pay the balance when due, I don't know if they consider themselves debt free or not.

A repayment mortgage is 'amortised' or 'dead'

We have a number a bills that are paid manually and to be pedantic when we receive an invoice for our caravan storage or school sundries like milk and after school care, until its paid it is a debt, even though we pay it promptly and have the money available.

Sazzie23

When the day finally comes I will be carefully to say that 'I am unsecured debt free' as I think this will be about 18 months before the mortgage is paid off and another 3 years later when secured debt is paid.

So I ca unsecured debt free, mortgage free and all debt free - oh well - its something to aim at, well done to anyone who has achieved any or all of these already.

Pixie5740

I shall be completely debt free in March 2015 but then I'll be looking to get myself into debt all over again with a mortgage. My plan is to overpay my mortgage and get it paid off by the time I'm 40. Then I'll crack open the champagne and be completely debt free.

Mortgage is a debt (but getting rid of all your loans and credit cards is a great achievement) and maybe mortgages seem like a good debt whilst the BoE base rate is so low. I wonder if mortgage will seem such a good debt when interest rates rise again.

Muhren

I agree that a mortgage is still a debt however when people come to this board they are usually talking about clearing their unsecured debt. They can then move all nicely to becoming a MFW.

That is a good point Pixie regarding interest rates going up, I guess it depends what sort of level they get to. Whatever happens you will still need somewhere to live though.

As for stoozing I wouldn't class that as a debt either if you still have the money to pay it off at the end. I would say the same for having a cc that you pay off in full each month. I have just got a Santander 123 cc as I do a lot of miles for work so will make around £100 a year from using it but I don't count this towards my debt as I will clear it each month.

CalumHeath

Debt: a sum of money that is owed or due.

Whether one can afford to pay or chooses when to pay has no bearing over the definition; the same is true whether the interest rate is 0% over ten years or 1000% over seven days -and everything in between: until it's paid or written off it's a debt.

Anyone telling themselves that any amount of money owed for whatever reason isn't a debt is just being dishonest.

Muhren

CalumHeath wrote: »

Debt: a sum of money that is owed or due.

Whether one can afford to pay or chooses when to pay has no bearing over the definition; the same is true whether the interest rate is 0% over ten years or 1000% over seven days -and everything in between: until it's paid or written off it's a debt.

Anyone telling themselves that any amount of money owed for whatever reason isn't a debt is just being dishonest.

I think you are missing the point of this board to be honest.

lee111s

I don't count the mortgage as a debt. Whilst in the true sense of the word it is, but to me it is an essential outlay.

Would you rather have a mortgage "debt" and pay £600 a month towards owning your own home or be debt free and pay £600 a month rent for someone else's mortgage?

I know which I choose.

Tixy

The opening post isn't asking for a literal definition of a debt.
It is asking for opinions from posters on the debt free wannabe board of this forum what they generally mean when using the term debt free when posting on this board.

quantic

I think we need a new a new state which is neither "in debt" or "debt free", I don't think the two of them alone quite cover it.

My friend is truely debt free, so on the face of it he would seem better off than me, I owe 100k and he owes nothing. But in reality I owe 100k on an asset worth close to 200k and he owes nothing but owns nothing...

My friend has nothing on his credit card and I have £100, so by the same definition he is better off than me. But in reality I have close to £15k in savings and he has none...

I don't know that it is just a case of declaring debt free or in debt