Do mortgages and minimalism mix?

  I’ve threatened to write more about finances and I’d like to tackle the idea of mortgages and minimalism.  

For many people I’m sure these two things are mutually exclusive. If you’re planning on owning less why would you own a big pile of bricks (or more accurately pay the bank money for the rest of your life to own it). 

I can see the argument and I especially understand that argument in a US context. The US has bred the tiny house movement which sees people ditching their McMansions to live on a piece of land in a tiny but wonderful house. That’s great. For them.  

But what happens when you want to live in a city, not in the middle of nowhere. And what happens when you want to live in a city where rents rise by a ridiculous amount annually? 

Our decision to buy a house was born out of a need for financial security. By owning a home we aren’t at the mercy of landlords putting rent up or wanting to sell. Plus owning a property is a peculiarly British past time.  

So we have a mortgage. But here’s the rub; we’re still not secure because we’re at the mercy of lenders and interest rates, with the threat of mortgage payments hanging over our head.  This is where I think minimalism and mortgages mix. 

For us, minimalism isn’t just about getting rid of our stuff, it’s about financial security and reducing our outgoings.  In order to reduce our outgoings we’re overpaying our mortgage. 

If we can become mortgage free then we’ll be financially secure.  Spending less isn’t just about not buying stuff, it’s about reducing outgoings. As someone much wiser than me once said: it’s not what you earn, it’s what you spend that counts.  

It’s not going to happen overnight unless we have a big lottery win but we are slowly chipping away at our financial burden with the aim of becoming mortgage free. I’m sure I’ll go into some more financial details at some point but right now I have to phone the bank for an update on our mortgage balance! 

M

10 thoughts on “Do mortgages and minimalism mix?

  1. As long the mortgage is a fixed rate mortgage term of 15 years or less, I do believe home ownership can increase your odds substantially of becoming financially free. Over in the U.S., the savings rate is extraordinarily low with most having little or no retirement savings. With inflation a certainty, I do wonder how these people will pay their rent if they are living on social security alone.

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    1. I agree. Same situation in the UK – record low interest rates and mortgage rates (for now) which has fuelled property purchase but v low savings rates. People here believe your property is your pension as they expect the value to go up all the time (as has happened historically). We’ve never had a generation reliant on renting in retirement so goodness knows what the outcome will be. M

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  2. I love this post. Minimalism doesn’t have to mean OWNING NOTHING. You can own a home because it makes you happy and gives you a sense of pride and community or a standard of living in a place you love that offers permanence and customized options to suit your lifestyle. You can own a home without feeling like you are weighed down by clutter and debt. You can still breathe easier with fewer belongings, less technology, or limited time commitments. Thanks for sharing this!! All so true!

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  3. We all need a place to call home and most of us do not have the money to purchase a home out right. But my practicing minimalism in all other aspects of our lives it allow us to maximize that monthly mortgage payment and bring us closer to financial freedom.

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  4. Hello – just found your blog and am enjoying reading through your posts. I also live in London (NW) and got the mortgage repaid by age 50 (I’m 59 now). I made repaying the mortgage my priority and then, once it was gone, concentrated on beefing up my savings, investments and pension payments. This strategy has worked really well for me and the psychological boost that you get from being mortgage-free cannot be overestimated!

    For me, a paid-for house means we have security plus the chance to make a bit of money later in life by taking in a lodger (which is tax-free income, providing you don’t exceed the permitted max). Most importantly, it means we have a valuable asset which can be sold to provide money for old-age care, if needed. And, of course, something to leave to the children if we don’t need to use the value for ourselves.

    The idea of trying to meet rent payments in retirement sound horrendous – and, if a person is reliant on housing benefits, they have no guarantee that they will be housed within the borough they want. That’s fair enough, because local authorities need to make their budgets stretch the same as the rest of us, but it does underline the importance of being as independent as you can even if it means prioritising financial security over a glamorous lifestyle!

    Jane

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    1. Thanks for sharing Jane and what an achievement to be mortgage-free by 50 – you’re my new hero! Absolutely agree with everything you say. It’s funny that sometimes I wobble and worry that we’re doing the wrong thing but stories like your’s make me realise we’re on the right path. M

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