I don’t consider mortgage debt to be bad debt. To me, and this is my personal opinion, owning a home is the best way to go financially {as long as it’s not a great big massive home that you can’t afford!} and owning that home outright, with no mortgage, must bring an amazing feeling of security. That’s why I {we} want to be mortgage free. Saying that though mortgage debt is still debt and we want it gone.
With all the happenings with work etc last year, our plans to be mortgage free in 2012 went off course, so we’ve made a new plan. 2020 is the new target; ten years to pay off £120, 582. {Mr Move To Portugal will be the big 40 and I’ll be 103, but we don’t worry about that!!}
We need to overpay by approximately £500 a month to hit our target, and this will take just over 10 years off our mortgage term.
Futher Reading:
{photo credit: sunfrog1}
{ 9 comments… read them below or add one }
wow. cool plan. we are not at all addressing the mortgage payoff at the moment. all we can really say is that it is cheaper than renting. I have paid a small amount off. Which is better than nothing I spose.
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As Mo says, paying a mortgage is at least better than renting – anyone who monitors their net worth regularly will see that is the case. Mortgage debt is “bad debt” in the sense that you have to pay interest. For example my interest last year was around £2,800. That is £2,800 not going to savings. However, in a house you have a potentially appreciating asset – so that does tend to counterbalance the disadvantage of having to pay mortgage interest – at least in years when house prices are on the increase. But on the whole I agree with you, buying a house is a great investment, and worth having to take on a mortgage for. Even in these difficult times I reckon my house has appreciated by around 30K, which isn’t too bad on a small house – that outweighs the mortgage interest by quite a way.
It’s a shame you had to shift your target from 2012, to 2020. But these things happen and things might change again in the future allowing you to bring that date forward should you so desire. I’m assuming your move to Portugal will still take place in 2012?
Sounds good–I too would like to own a home and DH and I are still wondering if we’ll go with something very, very tiny yet not take out a mortgage or borrow a little. It’s a big decision, of course.
That said, I must say that owning your own home is not always a wise decision–and is certainly not always better than renting. Years ago, we lived in the Silicon Valley we looked and looked for something within reasonable commuting distance to our jobs, but everywhere we looked housing was ridiculously expensive. In fact, we discovered that the yearly interest on our loan for our home would be more than our rent . . .We decided not to buy and are very, very glad we did as we’d probably now owe more than the place was worth–and be stuck in the Silicon Valley instead of France.
But yes, in SOME circumstances buying and owning your own home is a good way to go.
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Simple in France: Fair point, well made! I should have pointed out that my comments above were mainly related to the *general* UK housing market, and MoveToPortugal’s case in particular. Time and again property in the UK has proved a marvellous long-term investment. Rent in the UK can be ridiculously expensive compared to a mortgage. But you are right – it all depends. Renting can be preferable in some circumstances. Housing bubbles do occur and you can get anomalies in certain locations, even in the UK, so it always pays to crunch the numbers first, as you did. There are other reasons why renting can be a smart move – I recently cited the example of renting, rather than buying, in Thailand, due to various issues there. One thing I do like about renting is that feeling of freedom – if something goes wrong it’s someone else’s problem!
LOL@103. =)
You can do it!
That sounds like a really realistic goal! Do you still plan to move to Portugal in 2012?
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yes, still moving in 2012
Leslie and I came to a similar realization about debt and our mortgage. How amazing would it be to really own your home…So exciting. Best of luck to you!
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Wow, your moving date is close coming! How exciting. And I think your PIF to the mortgage is a feasible goal. I look forward to hearing about your progress.
Like the 103. LOL.
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