[Closed] Debt.........or the lack of.

debt averse yorkshireman, £60k mortgage ~40%LTV.
clear the credit card every month.

dont see the point in buying flash tat as a hobby..

yorkshireman in being a tightwad shocker! 😉

£3600 to go! down from 0ver £9000 in 2007, so I'm going the right way. I know friends who have run away from £5000 student loans though, and changed their names by deed poll, to call themselves "debt free"!

Thoroughly depressing reading this thread btw.

Tbh it's not the debt as such that bothers me as my car is nearly paid and I'll never have another credit card or buy consumer goods on HP and I don't really class my student loan as debt. I have at least 25 years to go on a mortgage which is probably not far off what my house is worth with the last couple of years fall in prices.

So at this rate I'll be 62 before it's paid off... 🙁

Though I guess when the kids are old enough and nursery fees are finished with then overpayment is doable. Unless I start buying unnecessary bike bits...

I do have a little debt - but only because I make more from investing the funds than I pay in servicing the debt.

Loddrik there aren't that many folk around who are gonna retire before they're 60 so if everythings manageable I shouldn't get too hung up on it!! Then there's always the ability to downsize once you're rid of the kids, however looking at it that'll probably when there in their mid 20's the way things are going 😯

Mortgage, about 133K - less than 70% of house value
Credit Card 3.5K
Student loan 14k - this is one thing I always forget about and when I think about it I get pissed off, I'll be 50 before its paid off at the current rate of repayment..

Nothing as the car loan is about to be paid off, cash is waiting in the wings.
No credit cards, I refuse to have them.
Hard as it is I don't want consumer credit either even though there are thing that I need, I can live without them.
Not interested in a mortgage after seeing how much the banks wanted in charges and inerest, I will buy with cash. Even with all the charges the greedy ****ers can screw up the economies.
I see the greed and living beyond means as the main contributor to the current crisis.
Smug? Me? Never... 😉

I was brought up with a strong aversion to debt, and until recently was entirely debt-free (rented). Bought a house last year and now have a mortgage the size of a large elephant which scares the life out of me, but we'd had enough of ******* landlords. It may be late in life to be in so deep, but hey that's the penalty of getting attached to someone in my 30's who cynically took all my money and tried to get the house, essentially I had to start again despite having always been careful with money. But I'm not bitter, oh no.

If I use my credit card I always pay it down, except this last month I didn't as I had several thousand pounds of annual season ticket on it. I was horrified at the size of the charge at the end of the month - I was completely unaware that they charge interest on the whole amount not the balance outstanding (I'd paid some off during the month) - now I see why credit cards are such good business and how they are the route to hell if the consumer doesn't manage them properly. I won't be doing that again.

I hope to pay off my only credit card in 2 months - Its one that has had about 3-5k on it rolling from one balance transfer to another. I have had no overdraft for some years. I have a small amount of savings for emergencies, but once I've settled the credit card I'll have substantially more disposable cash.

Apart from that I have the mortgage and student loans, however I've got used to the amount that goes out so not really noticeable, but it will be a bonus when I pay them off in a year.

So apart from the mortgage, not a lot really.

I come from a family that has a poor history in personal financial management. How my father has never been made bankrupt, I have no idea.

It didn't give me a proper training when it came to managing my own money. Consequently, Mrs North and I managed to rack up a sizeable unsecured debt in our 20s.

But we've cleared that and, apart from a small amount on a CC (which I'm going to pay off in 10 minutes), an interest free car loan, and the mortgage, we have no debt.

But, by god, we still spend money like water..!

we are the most indebted (personal debt) nation in the G7
interesting to see various comments from those who don't perceive themselves as in debt despite loans, mortgage, HP or CC.

no debt, credit card only used for the odd online purchase and big things like holiday or when i bought my most recent car... paid off at the end of the month. no student debt, but no mortgage which is something i'd love as it would mean having a house that isn't rented.

Had a lot of debt in my mid-twenties around 20k on credit cards. Didn't think there would ever be a day when I would be rid of them.

Eventually I did and it felt like I'd been reborn; such a joyous feeling to be rid of the credit cards.

Going through that experience means I'll never pass judgement on people who do have large debts and that I'll never have any credit cards or loans again; I've got the mortgage but so what, it's either that or pay rent, you have to live somewhere.

I'm another who was brought up to believe that debt was bad. Consequently, I worry myself silly about the size of our mortgage. Even more so now I have experienced about a year of unemplyment over the last five years - it severely dented my confidence in my own earning ability and also wiped out most of the savings we had. Being rediculously proud and stubborn, I didn't do the DHSS thing. Pillock.

Currently have £165k mortgage with 55% LTV (18 years remaining), 3k on a 0% credit card, plus another credit card we use for day to day expenses (to get the points) that is paid off in full every month. No loans. A few hundered in an ISA; pretty much bugger all in a few pensions but have retained our old house to rent out as an investment (£80k interest only mortgage currently at 50% LTV).

Actually, writing that down has been quite cathartic. We're not doing as badly as we thought.

I'm completely debt free, I suppose because I'm young with no mortgage or student debt and I live in a house share. Any time I've owed money I've hated the feeling, that sense of loss of control. I would never buy anything I couldn't afford outright, except a house or land.

Mortgage, you must be mad, pay the bank 5%pa for an asset that loosing 5%pa when I could rent the same asset for 5% and not have to deal with any of the liabilities arrising from it?

So, are you telling me that for the 5% interest pa.. that you would pay the banks, you can rent a property?

I doubt it, so whereas everyone else's monthly payment (minus the bank's cut) will come back to them in 15, 20, 25 years - yours will be in your landlords pocket.

Renting is not a long term financially viable prospect and your logic seems flawed.

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.

[i]I'm renting.. and totally debt free.. (and skint)

live outside the box and stick it to the man maaaaaan.[/i]

How are you sticking it to the man if you're paying someone lots of money to live in their house?

Debt free apart from Mortgages - circa £900k

Hmm, I am (comparatively speaking) one of the younger folk alluded to in some of the posts above. I am quite debt averse, although do currently a mortage (with Mrs PixelMix) which we are repaying, and currently stands at 75% LTV, a car on finance (which will be paid off in full at the end of the 3 years, as we are saving a monthly amount which will equate to the balloon payment), and unusually, I currently have a chunk of my latest bike on my credit card (which will be paid off in full in a couple of months).

Whilst I am not a big fan of debt, I am justifying the above in my head on the basis that:
(i) we need a car, and whilst we could make do with a banger, we spend a lot of time in it, and it is our little luxury. Mrs PixelMix also drives it to work every day, so it is nice to know she is in something modern with a full warranty. Hell, who am I kidding, I chose it and I love it. In 3 years time we will own it outright, and if we decide to trade in, will have a massive deposit for something else, so would only have a small loan next time.

(ii) the bike was a one off purchase on my interest free credit card. Once it is cleared, I won't really use my credit card, as we generally pay cash for everything.

Thankfully I don't have any student debt, as I had a job whilst at university. Mrs PixelMix has a reasonable sized chunk of student debt, so we chip away at that every month (her mandatory salary contribution plus an extra chunk of cash), whilst simultaneously putting an amount in an ISA for our next big purchases.

Having items on credit is fine as long as you are 100% sure that you can pay them off if required, and have an exit strategy. The difficulty is when it becomes a never ending cycle. I have no idea how someone can accrue £98,000 of credit card debt and have virtually nothing to show for it.

My sister spent £18,000 in 3 months and had nothing to show for it. So £98000 over a few years would quite easily be possible for some.

Apart from my student loan, I am debt free, and will never take out another loan, cc, over draft etc because I can not trust myself.

The only other debt I will have will be a morgage, but always one that is less then 50% of the house value.

everyone has debt, how many of you have not included your student loans, mobile contract, car insurance if you pay monthly, etc

credit goes hand in hand with capitalism, otherwise we would still be living in the dark ages,

[b]thisisnotaspoon[/b] - 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

But if you are paying off a mortgage you are building up the equity in the property which you could then access at a later date - with renting the money is just paid out and that's it gone..

People tend to look at buying property from the point of view of it appreciating in value (profit), rather than the value of the original equity. For example, if you 'buy' a house for £100k and then pay the mortgage every month until it is paid off you will then have the equity available to you. House prices tend to rise in the long term, but even if its value fell 20% you would still have £80k to play with that you wouldn't if you were renting.

Having said that, we are still renting because to buy something similar to where we are now would be stupidly expensive and we're reluctant to take a backwards step in out quality of life to get onto the ladder.. although that's probably a bit short-sighted, but works for now!

100% debt free, nothing on HP etc...

the BIG BUT being, I'm not a home owner, so all my efforts going into saving for a house.

Definately cheeper to be renting

Except of course that at some point, maybe in your 50's you would have paid off your mortgage. If you rent, you'll be paying that until the day you die - which could be tricky if you're living on a reduced retirement income.

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.

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.

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.

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.

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.

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.

Mortgage only here.

I can't imagine having that big a mortgage

4 seperate mortgages

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

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.

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.

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?

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.

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.

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.

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.