Downsize to achieve mortgage free/FIRE

xepija8686

I live a very frugal, single life. 30 year old guy, no dependents.

My current home is coming to an end of first 5 year mortgage term. £250k value, £159k mortgage.

I overpay the maximum and would expect to have it paid in 5-7 years.

I put it on the market as I realised I didn’t need a house as good as this and could happily live where I used to rent.

Houses frequently sell for £165k-£200k there. But most likely I’d be paying £185k.

My neighbour sold their identical place for £278k last year and house prices have been flat here.

Downsizing would take approximately £55k-80k off my mortgage depending on fees and achieved sale and purchase prices.

It would allow me to pay off my mortgage 2-4 years more quickly.

Just wondered if there were any views on this plan?

xepija8686

Bump bump please help people are making offers

South_coast

I don't think anyone here can tell you what you should do (which is probably why you've had no replies). I guess it depends whether you think a) you can be happy in the alternative location, and b) whether you think you will be single and child-free for the rest of your days (ie would the alternative location/house be suitable if a family did ever come along?) What difference would achieving mortgage-freedom sooner make to your life - are there plans you are currently putting off/are you working in a job you hate in order to make the OP's on the bigger mortgage etc etc etc? Only you can answer these

powerspowers

Yes we can’t make a decision for you! I think staying put and being mortgage free still in your 30s/early 40s is a huge achievement and you will still have the option to downsize and free up equity- plus potentially even more value in the property. If you can afford it and there’s no pressing reason to move then I wouldn’t! If you are working yourself to the bone and the move would improve your quality of life now, that’s a different story- only you lnow

xepija8686

South_coast said:

I don't think anyone here can tell you what you should do (which is probably why you've had no replies). I guess it depends whether you think a) you can be happy in the alternative location, and b) whether you think you will be single and child-free for the rest of your days (ie would the alternative location/house be suitable if a family did ever come along?) What difference would achieving mortgage-freedom sooner make to your life - are there plans you are currently putting off/are you working in a job you hate in order to make the OP's on the bigger mortgage etc etc etc? Only you can answer these

Thanks for your reply:

a) I’ve lived at this location before so know it’s okay
b) yes I will be

I don’t plan to change my job, but really would like to obtain some security over housing due to point b. Then I will have more free cash to make other investments.

powerspowers said:

Yes we can’t make a decision for you! I think staying put and being mortgage free still in your 30s/early 40s is a huge achievement and you will still have the option to downsize and free up equity- plus potentially even more value in the property. If you can afford it and there’s no pressing reason to move then I wouldn’t! If you are working yourself to the bone and the move would improve your quality of life now, that’s a different story- only you know

Thanks for your reply. There is not necessarily a pressing reason to move, e.g. I can afford the repayments, and I’m not going to quit my job if I get more secure.

I guess ultimately I’m trying to maximise my net worth.

Knapper

The world is changing rapidly

Right now I would definitely do everything I could to get mortgage free and own my own home.

Tough times are coming

Sistergold

Dear OP

A bigger house is always a plus. If I were you I would take in a lodger or two and use the extra money to overpay my mortgage and pay it off quickly. You could also decide to use the money to invest until you can pay off the mortgage. Once mortgage payed off the lodger option will continue to give you money which you can continue to save. Having a lodger is really a good financial push to most people. Even on your own it’s nice to live in a spacious house. Good luck.

Grumpy_chap

xepija8686 said:

I live a very frugal, single life. 30 year old guy, no dependents.

My current home is coming to an end of first 5 year mortgage term. £250k value, £159k mortgage.

I overpay the maximum and would expect to have it paid in 5-7 years.

I put it on the market as I realised I didn’t need a house as good as this and could happily live where I used to rent.

Houses frequently sell for £165k-£200k there. But most likely I’d be paying £185k.

My neighbour sold their identical place for £278k last year and house prices have been flat here.

Downsizing would take approximately £55k-80k off my mortgage depending on fees and achieved sale and purchase prices.

It would allow me to pay off my mortgage 2-4 years more quickly.

Just wondered if there were any views on this plan?

No-one can say what is the correct thing for you as there are simply too many variables.

My take on the FIRE philosophy is that you need to have sufficient funds to be financially independent and have the lifestyle that you want.  Not a life of misery unable to enjoy the time released for your own choices by eliminating the need to maintain gainful employment.

xepija8686

Grumpy_chap said:

No-one can say what is the correct thing for you as there are simply too many variables.

My take on the FIRE philosophy is that you need to have sufficient funds to be financially independent and have the lifestyle that you want.  Not a life of misery unable to enjoy the time released for your own choices by eliminating the need to maintain gainful employment.

Okay thanks. For me I don’t take any happiness from spending money or physical possessions (beyond meeting some of my basic needs). So this approach should be okay from that perspective.