I don’t mind admitting that I’m all over the place with my decisions about owning vs renting a home. I love the idea of being totally {mortgage} debt free in a couple of years and renting in Portugal until we find our ‘right’ area; however I do wonder if someone who loves her home as much as I do could be happy in rented accommodation forever!? {I’m also harbouring a dream about running a simple b&b in Portugal, something I always seem to come back to, and this would mean owning} Decisions, decisions.
Anyway our current mortgage is reducing every month and we’re still making a small overpayment; £57 every month. We’ve had some windows replaced and are now getting quotes for a new back door/entrance way; all work that needs completing before we sell. Our mortgage balance is now sub £120k and it’s great that it’s below another milestone.
PS. Something I realised when searching for a photo to put with this post: I LOVE yellow houses!
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{photo credit: daryl_mitchell}
{ 17 comments… read them below or add one }
Blue and yellow are very Portugese colours I think.
Oh I wish our mortgage was below £120 grand!
.-= mo´s last blog ..EED day – or not =-.
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And thanks for admitting being all over the place. I am too. What a crazy disaster my brain is on that topic.
But I still refuse to buy something where the interest on the principal each month is the same as what I’d pay in rent. . .you’re ‘throwing your money away’ in either case. . .
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@mo yes there are, I’d love a little yellow house
@simple in france. we’re quite lucky that our interest % is v. low at the moment and so mortgage cost is less than renting our house would be – this could change very quickly
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Well as you know I sold up recently, even though I loved the inside of my home it was in a location that I just didnt want to be anymore or have anything to do with. We looked at renting our home out while we took some time out but two reasons stopped us, firstly, I didnt want someone trashing it and being left with a bill to put things right, secondly, the rent I could have got would not have covered our outgoings on the property. Also I did not think that the property would have appreciated any more within the next 5 years. And I wanted the equity to finance my new (impending) lifestyle:)
I dont like renting though, i’m just not comfortable, but I came to the conclusion that being free is more important than being comfy:)
.-= Dreamer´s last blog ..cyprus calling =-.
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I think selling up in UK and initially renting in Portugal is a sound plan. Yes, it might make sense to rent out your place in UK, but do you really want the hassle and worry of it? I think if you decide to settle in Portugal, then at some point you are going to want to buy somewhere. But like you said it might take a couple of years, or more, to get comfortable with idea and find the ideal location.
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Laura – to expand on my thinking about owning v renting:
I am really upset where we currently live as it is hopeless re energy efficiency and we are paying a fortune for gas and electricity. As a renter, I can’t do anyhting about this and I fret all the time (as I’m sure you would) about not having any control over what we need to use/pay for fuel and the waste of money etc. (For eg, the immersion heater broke down and it was *on* for several days.)
I think I *do* need to own my own home abroad… or do I?
Anna.
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PS. I thinkTony is right
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@dreamer good point about the rent covering property costs; it’s ok when interest rates are low and mortgage payments low; when they go back up then it could be a {real} problem
@anna i think Tony is right too, he usually is
@tony we’re definitely selling {i’m not changing my mind again}
I’m usually SO decisive over things; this has been a strange one for me!
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@Anna: “I think I *do* need to own my own home abroad… or do I?”
It depends
Have you found somewhere abroad where you’d be happy to settle down, and feel comfortable buying? Probably you’ll have to travel around, try different countries and so on before you find somewhere you’d be happy buying. In some places it’s possible to buy a plot and have a house built to your specification (replete with solar heating etc if you wish) at reasonable prices. It’s also possible of course to rent some places abroad with fantastic facilities at reasonable prices. I take it the place you are currently renting is in the UK? Generally renting accommodation in the UK doesn’t give you much bang for your buck, compared to say Bangkok, Kuala Lumpur or Penang (or practically anywhere else it seems!). Do a Google search for Oakwood Residence Bangkok. I stayed there for around 300UKP a month (ignore the ridiculous prices they quote on their site by the way – things don’t work like that in Thailand!) – that place was all-inclusive 5 star luxury top floor apartment, complete with my own maid 
Where are you thinking of relocating to abroad?
@Laura: Yes! Can you taste the freedom yet?
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@Laura – great decision! Wait until completion day – you’ll be heady with excitement! Are you going to rent or buy abroad?
@Tony – thanks for your comment – will look at link. We have always thought that we’d go somewhere in France (SW or South) mostly because I speak some French and love the landscape. But, I realise that I’m increasingly thinking of travelling aorund (quite extensively) and seieng what’s out there in other places. So maybe the scenario would be renting for a few years and see what happens. I agree with Laura – I’ve never been so indecisive
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You know, I was just thinking too. You have to be careful when renting out a home (in one currency) and hoping to convert that income to another currency. Maybe you’d just be renting to pay the mortgage(without ever changing currencies)–in which case, you’re probably ok. But if you are using savings or income in one currency to pay for mortgage or living expenses in another, currency fluctuations can be a bummer. . .and those seem to be a sign of our times these days.
.-= Simple in France´s last blog ..The nonconformist =-.
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@Simple in France: you are right. For example, a few years ago you could get 70+ THB to 1 GBP. Now you’re lucky if you get 50 THB. That’s a *painful* drop. I think for that reason it’s not wise to depend on a *single* source of income from your “home” country to fund a stay in your “away” country – unless there is a reasonable margin of safety (such as if the mortgage is already paid off). That income can be very welcome though. The other advantage of course is that in addition to the rental income, the capital appreciation of the home you are letting out can be substantial, depending on market variations. In the UK the *long-term* trend is up, and that will continue to be the case I believe. There is also something reassuring in having your investment in bricks and mortar – especially in these turbulent times. I have certainly been considering renting out to partially fund a stay abroad (I wrote something on the matter on this site), but I am also coming around to the notion that selling up would be a much less stressful option
It doesn’t quite get rid of the currency fluctuation problem though. You can also run into a similar problem with interest rates – the rates in the UK suck at the moment. But then moving funds abroad can be equally problematic – just look at the Icelandic bank catastrophe. It ain’t easy managing this moving abroad malarkey is it? And, like Laura, I’m going to have to come to a decision one way or t’other at some point too 
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Someone round the corner from me has just painted their house that exact same colour – it looks a bit wrong on a 17th century cottage, though ….
.-= Caroline´s last blog ..Where In The World Wednesday: Torrevieja, Spain =-.
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I can’t advise on the renting versus owning problem but maybe the answer will present itself when the time comes if you don’t worry about it too much.
.-= Teresa´s last blog ..Dewi Sant! =-.
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For me this is the eternal question in my head. At the moment we rent because we have no deposit. Our rent is just over £1,000 a month. But are we right to, long-term, want to buy? I think given we’d need to pay about £5-10k in solicitor fees etc we would have to choose a house that we would live in for over 2yrs for it to make sense…
Amy x
.-= Amy aka ForDGRedial´s last blog ..Project 10 Pan – updated again =-.
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I think renting for a few months while you search for your dream (yellow) home is a good plan. I know what you mean about going back to renting after years of home ownership – the thought of having to ask permission to hang a picture on the wall! – but I would imagine being there in person for six months will make it far easier for you to find and buy the right place. If the rental schemes in Portugal are anything like England, you can probably find somewhere with a six-month minimum rental period followed by month-by-month rolling, which would give you a nice target date plus some flexibility.
I also love the B&B idea – we’re looking to do something similar in France, so we’ll need to make sure we buy somewhere with enough space to enable this.
.-= Alice at Simply The Nest´s last blog ..Blog It Forward – What Inspires Me? =-.
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Hi Laura,
I’m a first-time reader. I “found” you today via the wonderful SIF. I love your site and we share similar dreams of creating better lives for ourselves than the traditional corporate path offers.
Please forgive me if the things I’m about to ask have been covered in the past. I scanned your archives, but didn’t see the answers. I’m an American and am not familiar with the UK mortgage lending system, so the answers may be obvious to your UK fans.
Why are you trying to pay off a house that you intend to sell soon?
Wouldn’t you rather have the funds within your control so you can realize your dreams now?
For example, cash in hand could pay for several lovely home scouting holidays to Portugal, your mortgage holder usually won’t.
I dream of doing something very similar, but I would never prepay my mortgage. Instead, I’m working on accruing as much CASH as possible. Money that I can control and use – right now – and not have to wait until I’ve sold my house.
Thanks for taking the time to read this. I’d love to know more about your plans. I promise to dutifully read through every post thoroughly this weekend.
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