Debt.........or the lack of. « Singletrack Forum

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Debt.........or the lack of.

146 posts & 102 voices | Started 1 year ago by ton | Latest reply from bigyinn

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Wozza - Member

Not everyone in debt gets there by "living beyond their means" and reckless abandon i've seen quoted.

I'm 29 and paid for myself through my undergrad, a postgrad and a couple of "s**t hitting fans". I've got about £5k left and then i'm debt free other than the student loan.

It's not a pleasant place to be in, i've learnt a lot and i'm very much looking forward to the day where I don't owe a penny to anybody.

I'd like to add that some of the comments should try and walk a mile in some other peoples shoes before they pass judgement. The world isn't an even playing field.

Posted 1 year ago #
pixelmix - Member

I'd like to add that some of the comments should try and walk a mile in some other peoples shoes before they pass judgement. The world isn't an even playing field.

True, and no doubt many people who get into difficulty as a result of an unforeseen change in circumstances (job loss, health etc). That doesn't seem to have been the case on the other thread though.

Posted 1 year ago #
flip - Member

I have no debt whatsoever, no mortgage, i still remember the day 2 yrs ago when this happened.

One of the happiest of my life I too was shocked at that debt thread, truly life wrecking stuff. Hope you all pull through.

Posted 1 year ago #
Wozza - Member

That doesn't seem to have been the case on the other thread though.

I'd agree with that. £98k is reckless on anybodys scale.

Posted 1 year ago #
DezB - Member

Mortgage and a couple of 100 quid on CCs. Wife's car bought new, now paid off, mine with a few months to go.

Someone I know (who earns more than I do) managed to rack up £30K in debt. I can't fathom how. Drugs? Gambling? Hooers? Must've been. That plus a healthy dose of stupidity.

Posted 1 year ago #
Ho hum - Member

LHS - Member
Debt free apart from Mortgages - circa £900k

Wow!

I can't imagine having that big a mortgage. The monthly payments must be pretty big.

I guess it's fine if your income is high enough and stable enough to cover it though.

Posted 1 year ago #
anonymouse - Member

Mortgage only here.

Posted 1 year ago #
LHS - Member

I can't imagine having that big a mortgage

4 seperate mortgages

Posted 1 year ago #
ononeorange - Member

LHS - you just made me feel better about the size of my mortgage! Thanks!

Posted 1 year ago #
richmars - Member

Lucky to buy a house at a 'good' time, so paid off the mortgage in about 12 years, no other loans so whatever happens we should always have a house. I realise how lucky we were to buy when we did, I can't imagine how it is now, or how it will be for my son in 15-20 years time.

Posted 1 year ago #
DrRSwank - Member

There's some very odd stuff being said on here. No wonder you're all skint.

It is possible to have a mortgage, loans etc and not be in debt (in the truest sense) AS LONG AS your house is worth more then your mortgage. It's then just an asset which you are managing.

As for the rent v mortgage argument above. Er, in 25 years I'll own a house, you won't. And 25 years of the rents mentioned would have pretty much covered a well controlled mortgage.....

There must be a lot of renters on here though judging by the number with no mortgage. Either that or you all live at home with your mums.

Posted 1 year ago #
miketually - Member

There must be a lot of renters on here though judging by the number with no mortgage. Either that or you all live at home with your mums.

Or, they've paid off their mortgage?

Posted 1 year ago #
avdave2 - Member

None here other than a small mortgage. Down to a combination of good fortune and my attitude to shopping which tends to be if I don't buy it will I die? No, well then I'll do without.

Posted 1 year ago #
thisisnotaspoon - Member

gary-m, frogstop and jon1973,

You missed the crucial bit, £850pcm is what the bank is asking in intrest! The intrest is more than we could be renting the equivalent flat for! I could put away some extra every month in a savings account and as long as the savings rate is comparable to the mortgage rates I'd have just as much equity/cash in 5 years as I would paying off a mortgage.

Like I said unless house prices are appreciating I can see little or no point jumping on the ladder when I could afford to rent a nicer house for less than the INTREST on a mortgage and still squirrel some away for a deposit.

I'd also save ~£1000 mortgage arangement fees every 5 years
No maintenance or building insurance costs
The stress of anything devaluing the house (planning permision for a supermarket next door, subsidance etc)
And I could move on with a months notice, not have to wait 5 years to avoid early repayment charges then have to wait months for someone to buyt the house.

Posted 1 year ago #
Munqe-chick - Member

I haven't read all this thread! But it frustrates me how easy it is to get into debt. I was also brought up to believe that debt was bad and I remember saving for 2 years at 13 to buy myself a Kona Fire Mountain. Once I'd saved up my Dad surprised me and conributed to it, so I had extra cash for SPds.Went to uni and was a bit of a muppet and got into debt,4 student loans and £2000 overdraft. Suddenly left uni and thought "woah" spent the next 1-2 years working my butt over to pay off the overdraft, every month I'd go into the bank and ask them to reduce my overdraft by £100 and tehy would ask why and try to get me to extend it!!! Paid off my student loans after 5 years and now I'm happy as larry. Small mortgage and no debt. If I can't afford to pay for it outright I don't buy it.I save up for things. Rode the Kona Fire mountain for 11 years before I bought a new bike.The Kona still gets ridden now (but it's a winter bike).

I have friends who have ridiculous mortgages 5 bedroom barn conversions on interest only mortgages and then they can't afford to do anything! I'd rather live in me smaller house with a smaller mortgage,have holiday, enjoy meals out. I save money every month and top out of my ISA every year but I certainly still enjoy my life and treat myself to what I want. It really amazes me how much people get into debt and don't seem bothered by it.

Posted 1 year ago #
Keva - Member

I don't have any debt at all. Zilch, don't owe anybody anything. Rent a house to live in, no mortgage. If I can't afford something i don't buy it. Simples.

Kev

Posted 1 year ago #
Ewan - Member

I've a mortgage and student loan to pay off. It's well over 100k, but then I didn't have the advantage of buying a house before the housing boom and making a vast sum of money by effectively taking a mortgage out on the next generation.

Posted 1 year ago #
anotherdeadhero - Member

I'm a 'young'un' I suspect for most on here. Apart from my house and my education, I've never bought anything on credit, ever. I have a credit card - but thats only for payment protection on teh web and a nice bonus percentage on my linked savings. If I got those with the debit card, I'd use that.

I don't see renting as a viable return on my investment. Maybe if renting was half the money of owning the house, but for me the repayments are equal to the flat I was renting before.

Still, 23 years left on the mortgage pretty much limits my career options to this particular rut ...

Posted 1 year ago #
BillMC - Member

No debts. £5 in credit on the credit card. My credit rating is high having once borrowed a pile (against my house) to play the market during the dot-com boom and paid it all back with 3 months, but I never use it. Don't believe in the never-never, it can only make you miserable and over consumption is bad for the environment.

Posted 1 year ago #
Gary_M - Member

My point was that you're hardly 'sticking it to the man' if younrent a house.

As an example I own a property in Aberdeen which I bought in '96 for just over £25k. Town centre studio flat new conversion when I bought it. It's now worth more than five times what I paid for it, my interest only mortgage is £52.99 a month and someone who may think they are 'sticking it to the man' pays me £550 a month to live there. Occasionally being in 'debt' makes a whole lot of sense.

But you chaps carry on being sanctimonious with your funny protestant debt ethic.

Posted 1 year ago #
brassneck - Member

ou missed the crucial bit, £850pcm is what the bank is asking in intrest! The intrest is more than we could be renting the equivalent flat for! I could put away some extra every month in a savings account and as long as the savings rate is comparable to the mortgage rates I'd have just as much equity/cash in 5 years as I would paying off a mortgage.

That's one crappy rate then, I can get a repayment on around £180000 over 21 years with First Direct for that much. A tracker admittedly.

I couldn't rent my house for how much I pay in repayment mortgage each month (SE England) and I'm stuck on a 5.98% fixed rate for a couple years more. If I were on a decent tracker, I'd be roughly 400 a month than renting. Could be paying that off the mortgage, making it cheaper still or owning outright years earlier.

Posted 1 year ago #
brassneck - Member

£52.99 a month

I'm trying so so hard not to be jealous

My one regret was that I didn't get neck deep in mortgage in the 90's and rent out the places - the places I know well are still selling 4 times the price then even with 'price crash' and rental income would be -3 times the mortgage cost as repayment.

Posted 1 year ago #
Gary_M - Member

Yeh it's a pretty good return on investment for spare change every month

Posted 1 year ago #
kimbers - Member

none here apart from mortgage 2 years down another 23 to go on that one!

a few years back i was 5 grand on my student loan and 12 grand on credit cards! silly really combination of crap science wages and living beyond my means in an expensive town- cambridge
decided to pull my socks up got a loan thru the bank and oddly enough by moving to london and renting a crappy room in a crappy house in a crappy area, making own sarnies every day,havent bought a brand new bike in 12 years everything 2nd hand-apart from drivetrain, comuting by bike everywhere etc paid it all off end of last year,

Posted 1 year ago #
miketually - Member

We've a £90k mortgage on a house that we bought for £150k just over a year ago, after getting lucky buying our first house in 2000 and it almost tripling in value.

It's a shame we didn't buy two houses then, really, as we'd be mortgage free at 33 now. But, getting a mortgage based on just one income meant I could go back to uni for a year and that my wife could give up full-time work when we had kids.

As well as the mortgage, we have a bank loan for the car which also paid for some of the work that needed doing on the house (rewire, new boiler, new rads, new kitchen, roof repairs, some minor building work). That's for £4k and will be paid off in 4 years. We're remortgaging at that point, to keep the monthly payments the same and to pay the mortgage off earlier.

Otherwise, no credit card, no HP. We finish every month in the overdraft, but by less that the amount we have in savings elsewhere, so we could clear that if needed.

Posted 1 year ago #
barnsleymitch - Member

Mahoosive mortgage here, on a house that's now worth about 40 grand less than I paid for it four years ago, plus a couple of loans and a credit card. You know what? It doesnt bother me that much, I like stuff and can freely admit it.

Posted 1 year ago #
flip - Member

There must be a lot of renters on here though judging by the number with no mortgage. Either that or you all live at home with your mums.

Am lucky enough to have paid it off and own my house, 3 yrs ago i would have never believed i would have but lifes full of suprises.

Posted 1 year ago #
Scamper - Member

No debt at all and through skill and luck managed to get out of the housing market at the peak. Got cheap subsidised rented accomodation through the MOD, so no pressure to jump back in to build up equity, rather save what we'd spend on a normal rent or mortgage.

Posted 1 year ago #
5lab - Member

£155k on a mortgage and 2k on an interest free credit card. Hoping for a decent bonus to clear the cards and buy me a holiday or two

Posted 1 year ago #
rs - Member

As an example I own a property in Aberdeen which I bought in '96 for just over £25k. Town centre studio flat new conversion when I bought it. It's now worth more than five times what I paid for it, my interest only mortgage is £52.99 a month and someone who may think they are 'sticking it to the man' pays me £550 a month to live there. Occasionally being in 'debt' makes a whole lot of sense

Thats great for you but if someone were to buy that place now they wouldn't have quite the same level of savings, i guess the mortgage might even be a little higher than the rent, no?

edit: quick look at rbs mortgage calculator shows if you have a 50% down payment the monthly payments would be about 580, if you only have 10% the monthly payments will be in the region of 800.

Posted 1 year ago #
5lab - Member

Our neighbours flat:

£140,000 ish, rent £650pcm ~ 4.6%

Our flat:

£150,000 ish, mortgage £850pcm ~ 5.6% repayment only

My last house:

£325,000, our rent £1100 ~ 3.4%

Definately cheeper to be renting

The concept of 'owning' your own house is almost uniquely British it seems. The only way it ever makes sense is if you buy in a market where prices are rising faster than wages, i.e. your income will pay it off eventualy, but seeing as its hit the limit of everyones income I cant see that being repeated ever again.

n.b. my numbers are for SE england, ooop north where prices seem to be 50% or les what they are down here its probably possible to buy a house.

Thats one way to look at it, but the thing to remember is rents will always be rising (assuming inflation), whereas a mortgage wont. if you assume a 4% p/a inflation on rent, in 5 years time they will be paying more. In 25 years time, they'd be paying around 12% of the value today. To offset that, you have to pay property repair costs, but avoid agency fees etc. swings and roundabouts, really.

also, the rent:buy ratio varies hugely. On my street (popular with student lets), houses rent for between £1400-1800 pcm (lets take a middling £1600 figure). Houses cost around £230k - so around 8.5% yeild. However near the seafront, a 2 bed flat would rent for less - maybe £1200 pcm, but sell for £400k - 3.6% yeild. About 1.5 miles from each other

Posted 1 year ago #
Gary_M - Member

rs interest only mortgage payment is £52.99 per month so quite a bit less than the £550 rent I get per month.

Posted 1 year ago #
rs - Member

rs interest only mortgage payment is £52.99 per month so quite a bit less than the £550 rent I get per month

understood but your example is based on buying 15 years ago and renting at today's prices, somebody looking to buy now is going to need a good deposit and a higher monthly payment than the rent in most cases. Quite the outlay these days.

Posted 1 year ago #
Gary_M - Member

Yeh I know that but in 15 years time they could be in the fortunate position I'm in now I was illustrating the point that sometimes having 'debt' isn't a negative position.

Posted 1 year ago #
thisisnotaspoon - Member

Or you could be in the position where you 'own' a city center 'flat'* worth £55k, but owe the bank £155k, like those poor sods who bought into the whole 'city center living experience' advertised in places like Manchester and Cardiff.

*A friend bought one in London and was told by the developers pets were allowed. However the RSPCA wouldn't let them have a cat from their re-homing center (even an indoor one) as the space was considdered too small and therefore cruel!

Posted 1 year ago #