Debt………or the lack of.

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

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.

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 …

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.

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.

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.

£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.

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

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,

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.

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.

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.

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.

£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 🙂

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.

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

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

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.

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.

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!

amt27,

you are wrong we don’t all have debt,

it is possible to become totally debt free, don’t crash peoples hope by saying otherwise, just by saying this i will no doubt be branded a willy waver but i don’t care as at least i’m being honest and truthful.

The level of (especially) unsecured debt that some people have managed to get themselves into in the last 5-10 years is horrifying.

I see some of the fallout in my job and 2-4 times income on credit cards and loans (with no real assets to show for it) is not that unusual.

That’s why we have a modest mortgage and zip all else. About the only thing I might borrow for is a replacement main family car in 3-4 years time when the current 7 year old one will probably have got rough round the edges. 2nd household car is always something cheaper for cash.

just the house for me

No debts, mortgage paid off and net saver here.

nice high ceilinged victorian 1-bed ground floor flat overlooking north wales mountains and coast. £80 p/w rent. depends what you want.

Spent about 15 years not worrying about overdrafts and CC’s. All came to a head about 3 years ago when I realised i was in the shit and £12k owed, and no way of borrowing my way out of it. Got onto a debit management plan to at least freeze the interest, which helped me to tread water, but not really doing much with the debt other than stop it getting worse. Eventually paid it all off thanks to inheritance.
Never EVER again!
I may live from month to month and struggle after christmas, but at least its all mine now.