Sell house and rent to be debt free?

julsxx

I currently have equity in my house and am struggling to pay monthly bills as i am on minimum wage.
Thinking about selling house and renting so I can have a life with a bit of money behind me instead of struggling all the time.
Renting would be slightly more than the mortgage but i wont clear my mortgage until I am 70 and dont want to be in this situation until then (I am 58).
Also, where do I keep the equity so that the tax man doesnt take a chunk of it, as you can only put 15,000 in an isa.

jaybeetoo

You are struggling to pay the bills owning a house so you want to rent which will cost you more.

I don't know how much money you will have after selling your house, but you need to work out how long it will last if you have to use it to pay the additional costs of renting.

dc197

Surely if renting would be more than the mortgage, this plan would worsen your bill-paying ability?

The sale of your primary home won't incur capital gains tax so no chunk will be taken. The ISA you refer to is a way of saving without George taking a chunk of the interest, not capital.

anselld

Min wage is set to increase to £9 per hour by 2020. Better to budget harder and keep going rather than blow your equity on future rent.

[Deleted User]

Sorry to ask the obvious - but could you downsize and cope better on a smaller mortgage?

lovinituk

What happens when you're renting in your 70's and you have to keep moving every year or two because the landlord wants the property back for various reasons?

maisie_cat

Are you comparing the cost of the mortgage with renting or all the costs of property ownership compared to renting?
If you are then DC197 is right, you would be better off looking at your bills and what else you spend money on.
In my experience food is the one that can be cut with a bit of planning and little effect on nutritional value, in fact we have a far healthier diet now that our household income is halved.
You have security now, in the sense that you will not be forced to move every year or so if landlords sell up or raise the rent too much.
If you are on minimum wage are entitled to any in work benefits that you are not claiming?
Would it be possible to get a lodger, even for a while?
MC

booksurr

presumably you are assuming that being on minimum wage you will be entitled to some form of benefit to pay the rent on your behalf leaving you with the capital ("equity") sitting in the bank?

benefits are means tested! You would be better staying put as a home owner.

oystercatcher

If you're struggling to pay bills now it will only be worse if you are paying a higher rent.

Depending on how much equity you have could you buy somewhere smaller? Possibly buy outright ? This should help outgoings and give you some security .

Also look around this forum and find ways to reduce your outgoing bills etc.

julsxx

Thanks for replies, yes renting would cost more but would top it up it with the equity and hopefully some interest I would get on it.
Future plans are to move abroad and rent and then possibly buy abroad.

economic

Maybe best to sell, put equity into riskier yielding stock investments and use the yield to cover the cost of renting.