Downsizing before 40 to be mortgage-free

GreatEscaper

Hello there. I'm new to these forums and thought I'd add on my own hopes to become mortgage-free and potentially enjoy semi-retirement before turning 40 this year.

At the moment, I'm living in a house worth £475K with a £360K mortgage (yikes). I work for myself. As does my husband. We run a small company together in the city that does very well. We've done so for the last 10 years. But, like many self-employed, we always worry that things could change. So we make hay while the sun shines.

Anyway, I feel a bit stuck at the moment. I dream of being mortgage-free so we're able to jump off the treadmill and enjoy a more chilled-out lifestyle. We really don't have to work five days a week or earn the money we do. We could totally step back and work two or three days a week. We're lucky to have that flexibility.

Why don't we? Well, it feels like a risk. As the opportunity is there to make good money, whilst we're young. Our business has so much potential where we're based. Meanwhile, the expensive house we're in is going up in value. It's worth £55K more than what we bought it for over two years ago. We think it's still got potential to increase too. Another three or four years here, doing what we do, and we'll be able to consider downsizing to a much cheaper (but nice) house in a cheaper area and be mortgage-free, if we want to.

The problem is, I'm fed up. And have been for a couple of years now. I'm wondering if it would be unwise to downsize now? My husband keeps saying, bear with it. Stay strong. Because the longer we stay where we are, the better... i.e. we'll be able to downsize into a nice property of decent size. I know he's right. I just keep dreaming of what life would be like if we didn't have any debt. He does too.

I'm not sure if anyone else has been in this situation. But I'd like to think this is a first step to figuring things out and considering our next move. Whether we're better off staying put or downsizing now – with the latter option not including semi-retirement at this point. Just a chance to pump as much money into savings as possible...! Of course, our choice of property wouldn't be as good. But does that even matter? In the grand scheme of things? I'd rather go on holiday more!

Thanks in advance for any feedback or advice

blocpartyfan

Hi GreatEscaper!

Thanks so much for sharing your story - you and DH have done an amazing job over the course of your working life to get yourselves into such a comfortable position. It's a testament to your hard work!

I've not been in your exact situation, but hope you don't mind me commenting here. I found it interesting that you say you are fed up, and wonder if there are a number of different issues and options that are presenting for both of you that might not be related to the house and overall debt. I imagine you are both in your 30's, and my husband always says, out generation will be working until we are in our 70's, so you'll always be earning! But if you want to free yourself up from your current way of working, that might be worth exploring what's possible. Something along the lines of weighing up risks, pros and cons, etc might help. E.g. how would our circumstances change and could we afford to pay our current mortgage if we:
a) carried on as we are
b) downsized
c) changed jobs
d) life circumstances changed

It's always tricky when you're in a place of options and things could change...I definitely am in the same place in my life! Am sure the right thing will happen

FloppyDisk

Can you try to appoint a manager in your place to generate the same income? I am of the 'make hay while the sun shines' mindset and depending where you live, your current equity might not buy a particularly large house if that's what you are after. Do you have any other assets? Perhaps a chat with an IFA to look through your pension provision would help you with a plan.