I don't understand this obsession with being mortgage free

edited 16 June 2019 at 9:31PM in Mortgage-Free Wannabe
17 replies 2K views
DisjointDisjoint Forumite
170 Posts
Eighth Anniversary 100 Posts Name Dropper Combo Breaker
edited 16 June 2019 at 9:31PM in Mortgage-Free Wannabe
Rates are at an all time low - banks will just give you money away. The property market is pretty tepid with deals to be made (not straight forward I'll admit, supply is still low).

If I was still employed I would be looking at levering up even more today! (Lost the old job and now working with some old colleagues to start something up with no work income - but my kids are not yet in fee paying schools so now is the time to take the startup risk!)

My mortgage+++ journey:
Bought flat number 1 to live in
Bought flat number 2 to rent

Levered flat number 1 three years ago and put the max ISA allowance for the last 4 fiscal years with those profits
Levered flat number 2 one year ago (took all equity out, if market goes to zero bank loses, I walk at flat - rent pays for the mortgage)

Bought flat number 3 to live in with money I took out from flat 2.
Flat 1 and flat 2 rental income pays for themselves. 35 years mortgage length for the win! (always did repayment mortgages and yields were more attractive than today when I bought them in 2011/12)

I might be a bit more keen on risk, but bottom line is that given where rates are: take money from your house and put it on the line. It's not too hard to beat 1.5% on the market via an ISA with a very conservative band (on a regular account you have to take into account taxes so a bit more risky). I am not as excited at putting your money in buy-to-let today, the Government has done it's best at kicking the small landlords in favour of the large corporations such as Blackstone, but now I am just ranting.

Rich people get richer thanks to huge amounts of debt and shifting the risk on society, it's time the little people like ourselves did the same! Worst that can happen is: you end up dying at some point like everybody else and you won't take your house with you anyways. :beer:
«1

Replies

  • MoneyfordreamsMoneyfordreams Forumite
    2.2K Posts
    Sixth Anniversary 1,000 Posts Name Dropper
    ✭✭✭✭
    Thanks for sharing. Well done. I'm a bit more risk averse after hitting a few bumps on the way. Nice idea though. I did toy with the idea of btl about 15-20 years ago. £11k. I got told house on a hill might not have been a good bet as ? movement. pulled my offer and ran.... that flat later was up for £90k :o
    Mortgage restart June 2018 £119950
    Re mortgage August 19 £110470, HSBC 0, Hfx £5800, MBNA £6000
    … Mortgage £96500
  • A_Frayed_KnotA_Frayed_Knot Forumite
    3.2K Posts
    Sixth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    Well done, good way to go if you have youth on your side :T

    I know I'm in the minority, but I'm sure you would change your mind,
    if you were in the following circumstances;
    Over 50 years,
    Mortgage till you were 70 years :eek: - Not happening !!!
    Low paid income (under £20,000) and
    Single

    I had The Obsession, and it was fun, saved a whole lot on interest,and I now have a new obsession
    Get EF up and work part time :j
    Always have 00.00 at the end of your mortgage and one day it will all be 0's :dance:
    MF[STRIKE] March 2030[/STRIKE] Yes that does say 2030 :eek: Mortgage Free 21.12.18 _party_
    Now a Part Timer from 27.10.19
  • TropicallyTropically Forumite
    427 Posts
    Fifth Anniversary 100 Posts Name Dropper
    ✭✭
    It's all about risk tolerance. Simple as that. You want to be leveraged up to your eyeballs, that's your prerogative. Some people want to be mortgage free and that is their prerogative. Not everyone is willing to risk the roof over their heads for a level of reward, nor does everyone want to be real estate investors!
    Mortgage started at £318,000 in June 2016. Original MF - 2041 :eek:
    2nd Property Mortgage at £275,000. Mortgage free: 2049 :eek:
    Total OPs: £29529
  • liuhutOzliuhutOz Forumite
    183 Posts
    I've got a $520000 mortgage so not exactly risk adverse but I hate owing this amount. Who knows what will happen in 5/10/20 years, I'd rather get it paid off and rest easy at night
    Formally liuhut
    WIN £2008 in 2008 £1836.31 2009 wins - £91!!! 2010 6170.... wins 2011 aprox 2000
  • ratechaserratechaser Forumite
    1.7K Posts
    Seventh Anniversary 1,000 Posts Name Dropper
    ✭✭✭
    I've got a very nice mortgage free house and have thoroughly enjoyed tonight's episode of Nightmare Tenants, Slum Landlords.

    As people have said, risk tolerance is a personal thing, but I'll invest elsewhere thanks, property is for living in (myself).
  • ThrugelmirThrugelmir Forumite
    85.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭✭
    Leveraging with debt is double edged. Not only are gains greater but losses too. Remember the old adage if something is too good to be true, it probably is.
    Real insurance claim quote : -

    "Going to work at 7am this morning I drove out of my drive straight into a bus. The bus was 5 minutes early.".
  • [Deleted User][Deleted User] Forumite
    0 Posts
    MoneySaving Newbie
    Its not just pounds and pence when renting property its a PITA tbh and with more and more legislation, tax, and costs with everyone wanting a bite of the cherry its not worth it IMO.


    I am retiring in 4 yrs and cannot wait to be shot of my BTL.


    Paying off a mortgage is a trade off with maximising a pension which is better use of funds but for some , me included there is nothing that provides more peace of mind than whatever hits the fan I have my own roof over my head.
  • NorthernMonkey1NorthernMonkey1 Forumite
    328 Posts
    Sixth Anniversary 100 Posts Combo Breaker Mortgage-free Glee!
    ✭✭
    It's all about risk for me. I sleep a lot easier when I think of the risk of losing my job, knowing that no one can take away the roof over my head.

    I've recently taken on a car loan, and even this makes me feel a little un-easy. I was positively uncomfortable knowing I owed a 6 figure sum
  • rupertsruperts Forumite
    3.7K Posts
    Tenth Anniversary 1,000 Posts Name Dropper
    ✭✭✭✭
    What's a "very conservative band" ISA? If you mean low equity then the expected return is what, 3-4%. So you're effectively borrowing against your propert at 1.5% and investing it in the hope of getting a return of 3-4%? Sounds quite high risk to me.
  • zcrat41zcrat41 Forumite
    1.6K Posts
    Part of the Furniture 1,000 Posts Combo Breaker I've been Money Tipped!
    ✭✭✭
    Am I being a bit thick but if the property market dives and you have to sell the property (i.e. you can't get a tenant) and you sell at a loss it's not the bank that loses out, it's you. You still owe the mortgage money!


    I'd want to be in a much more secure financial position than that to consider paying school fees. Do you have other investments/income?


    My main family home is mf and the sense of security and the lack of worry that gives someone is almost immeasurable.


    I use it as a way often of living a certain lifestyle. I could spend a lot more than I do but I don't!
This discussion has been closed.
Latest MSE News and Guides