Help us decide...

MF2015 · 16 April 2018 at 2:01PM

Ok, so I'm not sure I'm going to get a balanced view on this one but should we over pay or live in the moment a little, please help us decide.

15 years or so back I was in a fortunate position to become mortgage free in my mid 20's and took the opportunity to give up work and go back to university. It wasn't a big house but it was paid for.

After leaving uni I got a better, nicer house, and decided to make 2015 my new mortgage free date.

With one thing and another we relocated and bought a bigger house in a much more expensive part of the country but kept the old house.

We still managed to effectively pay off the mortgage by 2015 by accumulating equity in the new house after having two extensions built and sold the old house last year.

Roll on to 2018 and we are now in a house we can see ourselves in for the next 15-20 years, or as long as we stay in this part of the country.

We currently have over 50% equity in our house, more than enough to move back to where our parents and roots are mortgage free very comfortably. That leaves us with a bit of a dilemma.

Should we use some of the money we have in the house to live a little or should we keep our foot on the gas and get the house paid off as soon as possible.

I pay a large amount into my pension, enough to allow me to comfortably retire at 55. If we pay down the mortgage we should be able to clear that by 55 as well.

The thing I'm struggling with is we have a 6 year old and as a child we always had a camper van. We had some great holidays and weekends away and 6 or so is the magical age for this.

If we took a lump extra on the mortgage up to 60% LTV it would allow is to buy a new camper that we could use as one of our daily drivers for the next 10 years but would mean that we wouldn't clear the mortgage in 15 years, maybe 20 or so.

Do we live for the moment a little and make the most of our time on this earth, no one knows for sure how long any of us are here. We will need to change the second car soon and this will fill that roll as well.

Please help!

Tropically · 16 April 2018 at 3:50PM

So you are in two minds? One being staying in the house for 15-20 years, the other being moving back to your parents' area?

You could post a SOA or a list of assets so we can see what 'a large amount into pension' and what 'living a little' versus 'foot on the gas' looks like.

If you are good at saving, why take on extra debt to buy a camper van, why not use savings?

edinburgher · 16 April 2018 at 3:56PM

Tropically wrote: »

If you are good at saving, why take on extra debt to buy a camper van, why not use savings?

And why does OP need to release equity to buy a new (second) car? It's not as if cars wearing out should be a surprise for a good saver...

Reading between the lines, I think OP has gone a bit OTT with overpayments etc. and is looking for "permission" to slack off a bit

Their capital is perhaps misaligned with their life goals.

MF2015 · 16 April 2018 at 4:13PM

Maybe a little bit more info would help. Our house is valued at + 500k and we owe about 240K. We have a joint income of about 85-90k depending on overtime.

I pay into my pension around £1100-1200 per month with my employers contribution, my wife has a good pension too.

Our savings have gone into paying for the two extensions so we didn't have to borrow so much.

We could easily move back to where our family are from mortgage free now, but come 55 we should have at today's prices a +500K house paid off and a very good pension each to allow us to retire at 55, if we want to, we may not. I only work 10 x 12 hour days every month as it is.

What I'm trying to say is the thought of a 300k mortgage scares the c%rap out of me if we were to take some capital out for a camper van.

But the camper van would cover 2 rolls, my commuting vehicle to work, and holidays/weekends away for the next 10 years. We would save on holidays, have a very slowly depreciating vehicle, geez, I've wasted enough on depreciation over the years but have an 80 mile round trip to work so need a reliable vehicle.

Who knows what is around the corner, we are financially ok and I'd hate to get to 55 having saved like mad only for something to happen and not enjoy our later years. Recently we have had eye openers of people our age passing and it makes you think a bit more about living for the moment.

MF2015 · 16 April 2018 at 4:18PM

edinburgher wrote: »

And why does OP need to release equity to buy a new (second) car? It's not as if cars wearing out should be a surprise for a good saver...

Reading between the lines, I think OP has gone a bit OTT with overpayments etc. and is looking for "permission" to slack off a bit

Their capital is perhaps misaligned with their life goals.

We have two cars now, mine and the wife's. One on HP, the wife's small city car, due to the deal we got taking it out not making sense to buy with cash, and the motorway car bought for +20k cash.

Tropically · 16 April 2018 at 7:06PM

It sounds like a personal decision then, between moving home and staying where you are.

As for the other decision, I wouldn't put a campervan on the mortgage, but I would buy one with savings.

MF2015 · 16 April 2018 at 8:21PM

Tropically wrote: »

It sounds like a personal decision then, between moving home and staying where you are.

As for the other decision, I wouldn't put a campervan on the mortgage, but I would buy one with savings.

We are not looking to move, we are in the house for the next 10-15 years.

What I’m debating is using some of the capital to buy a camper that will double as a car and allow us to have cheaper holidays more often.

The way I see it is I can either over pay the mortgage, pay for holidays aboard and save for a car for the replacement in a couple of years or release some of the equity, fix on a 10 year deal for next to peanuts interest and overpay the mortgage. The problem with saving up for a camper is it will take so long to save for it I’ll be missing the best years of my son’s childhood when he’ll get the most out of it. I used to love falling asleep in the back and opening the curtains in a completely different place, the excitement was fantastic. Outdoor time that sadly a lot of kids just spend wasting in front of a screen.

MF2015 · 16 April 2018 at 8:46PM

I suppose the other way to look at is if we had used our savings to buy a car/camper van then decided we wanted to extend the house would you use some of the capital to build it and increase the mortgage?

After all it is the same outcome, just this way we have a much better LTV hence cheaper interest rate.