Imagine.

House in Lipsk.

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What would you do if you no longer had rent or a mortgage to pay???

My parents own their house and are mortgage free. They have been ever since we came to NZ. It’s pretty amazing…I was just thinking the other day how low their bills must be. No mortgage. I don’t think they have very much insurance (not even sure if they have car or contents insurance. Blergh) Neither works full-time.

From an NZ-centric point of view, paying off the mortgage ASAP is a no-brainer. Mortgage rates here are quite high and we don’t have 30-year fixed terms. As far as I know, the longest you can lock in is 5 years.

Housing is usually the single largest expense for any household, and if you can eliminate that…well, I can’t even imagine the possibilities! It varies, but rent is up to 40 per cent of our total spending, or up to about 20 per cent of our income. With an extra $1000 a month, we could eat like royalty, take a trip every month, or shave years off saving for a down payment.

But that just ain’t gonna happen, so I’m not going to think too much about it. I’m one of those people who hates being asked “What would you do if you won Lotto?” I like to fantasise about things that are REMOTELY within my reach, thankyouverymuch.

9 thoughts on “Imagine.

  • Reply Daisy January 14, 2011 at 09:49

    This thought has always made me think that when we do get a mortgage I’ll probably put all my extra money toward it. Paying off a mortgage early can save tens of thousands of dollars in interest!

  • Reply Maggie January 14, 2011 at 10:22

    Yeah, those hypothetical questions are both hard to answer and difficult to think about when you don’t know if you would win. Don’t really like it either.

    But, no mortgage to pay would be pretty sweet. Good thing about my dad passing is that the mortgage was paid off so my mum didn’t have to worry about that.

    • Reply eemusings January 15, 2011 at 10:23

      I’m so sorry to hear that – but glad he planned ahead to provide for you guys.

  • Reply Lesley January 14, 2011 at 10:24

    Canada doesn’t have 30-year fixed terms either. I think 5 is as high as you can go. I lived rent-free with my parents until I was 22. I never had to cook an actual meal or buy groceries. I did laundry as I pleased and didn’t have to worry about racking up a huge water or electricity bill. I honestly didn’t know how good I had it until I decided to move out. I enjoy the freedom and my independence though so it’s well worth the price for me. Working full-time while living at home for 2 years really allowed me to grow my savings and that’s why I can afford to pay for school and give the down payment on my condo without help not to mention it gave me breathing room as well. If I didn’t have to pay rent, I would work less. I’d probably like to travel and use the extra money to pay for experiences that I couldn’t previously have afforded.

  • Reply Kara January 14, 2011 at 10:30

    That’s so awesome that your parents have no mortgage! I don’t know what I’d do if mine was all paid off right this instant. Travel? Buy a new car? I’d definitely only work one job instead of two.

  • Reply Tasha January 14, 2011 at 12:14

    My parents never had mortgage either, but I think they compensated for that by sending all 3 kids to private schools through to uni/college. They still came out of it really well without incurring any debt. They were so lucky to have been gifted an empty lot by my paternal grandparents where they only needed to build a house on.

  • Reply First Gen American January 15, 2011 at 03:34

    We paid off our mortgage last year (but we still have my mom’s). The hard part is being happy with what we have. My husband talks about combining households and moving from 2 homes to 1 in a better school district. There are benefits in doing that, but there’s also a feeling of starting over that I’m not ready for.

    Certainly with a paid for house, I’m starting to dream about a job that is more flexible and requires fewer hours. I’m not quite there yet financially, but once your immediate debts are paid, time becomes much more valuable than money.

    Anything’s possible. It’s just a matter of what you’re willing to give up in comfort, safety and personal time.

  • Reply Kevin @ Thousandaire.com January 15, 2011 at 04:41

    I can’t say this is a fantasy for me. As long as I can comfortably pay my rent/mortgage, then I don’t mind the payment.

  • Reply The Asian Pear January 15, 2011 at 14:36

    I think my parents paid off their mortgage twice already. (Every time they pay it off, they took money out to keep their business afloat). We’re now down to the wire to pay it off the 3rd time. I can’t wait when it does. To expediate the process, we’re paying over $1,000 a month. I can’t wait to free up some of that money to help with fixing up the house and other stuff.

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