Downsize to achieve mortgage free/FIRE

Options
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?

Comments

  • xepija8686
    Options
    Bump bump please help people are making offers
  • South_coast
    South_coast Posts: 4,976 Forumite
    First Anniversary First Post Name Dropper Photogenic
    Options
    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
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • powerspowers
    powerspowers Posts: 1,127 Forumite
    First Anniversary First Post Name Dropper
    Options
    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
    MFW 2021 #76 £5,145
    MFW 2022 #27 £5,300 
    MFW 2023 #27 £2,000
    MFW 2024 #27 £1,350 /£3,600


  • xepija8686
    Options
    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.

    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
    Knapper Posts: 76 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    Options
    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
    Sistergold Posts: 2,036 Forumite
    First Anniversary First Post Name Dropper Photogenic
    edited 12 January 2022 at 10:03AM
    Options
    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.
    Initial mortgage bal £487.5k, current £266.8k, target £243,750(halfway!)
    Mortgage start date first week of July 2019,
    Mortgage term 23yrs(end of June 2042🙇🏽♀️), 
    Target is to pay it off in 10years(by 2030🥳). 
    MFW#10 (2022/23 mfw#34)(2021 mfw#47)(2020 mfw#136)
    £12K in 2021 #54 (in 2020 #148)
    MFiT-T6#27
    To save £100K in 48months start 01/07/2020 Achieved 30/05/2023 👯♀️
    Am a single mom of 4. 
    Do not wait to buy a property, Buy a property and wait. 🤓
  • Grumpy_chap
    Grumpy_chap Posts: 15,052 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    Options
    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
    Options

    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.
Meet your Ambassadors

Categories

  • All Categories
  • 343.8K Banking & Borrowing
  • 250.3K Reduce Debt & Boost Income
  • 450K Spending & Discounts
  • 235.9K Work, Benefits & Business
  • 609K Mortgages, Homes & Bills
  • 173.4K Life & Family
  • 248.5K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards