I'm halfway to paying off my 25-year mortgage this week. Which is a scary thought. House purchase is full of scary thoughts, not the least of which are how huge is the amount you need to borrow, how incredibly lengthy is the time period over which you have to pay it off, and just how much money your mortgage lender is going to fleece out of you over that time. Let's think scary thoughts.
October 1991 seems a very long time ago. And it is - think Bryan Adams at number 1 for the 15th week, and the final episode of Dallas screened on BBC1. Up until the age of 26 I'd been lodging in a single room, sharing a house with people I might rather not have shared with, and feeling generally encroached upon. Then, with a new job in a new part of the country, I finally sold my soul to eternal debt, took the plunge into home ownership and, for the first time, tasted independence. My new flat took forever to purchase (Bryan was number 1 throughout the whole saga) but at last I had more than one room of my own, my own front door, my own phone bill and my own space. And I've never looked back.
£50000 seemed like a very large amount of money back in 1991. I could have paid a lot more, because the housing market was hiccuping downwards at the time, but it remains by far the biggest purchase I have ever made. Fifty grand won't buy you much in the way of property these days, and won't buy you anything at all in the southeast of England, but at the time it got me a nice two-bedroom flat within walking distance of Bedford station close to all local amenities. I hoped that the monthly haemorrhaging of my bank account would be worth it in the end, and as things turned out it got me onto the housing ladder before getting onto the housing ladder became all-but impossible. Just in time.
I was fully intending to go ahead with a repayment mortgage, but some young upstart in a suit persuaded me that an endowment mortgage was the answer to my financial needs instead. He was very very wrong, although I didn't realise this at the time. I may be halfway through paying off my mortgage but I still haven't paid a penny of it off, and I've been warned by letter that the policy almost certainly won't pay off the full amount by the end. Great. I know I'm not alone in this predicament, and yes I know I should be suing the bastards for plying me with wilfully wrongful advice in the first place, but I still haven't got round to initiating anything yet. Probably the second biggest mistake I ever made in my life, this.
When I embarked upon my 25 year mortgage, the year 2016 seemd a very long way off. It still does. I no longer live in that Bedford flat, I rent it out, and the mortgage ticks over comfortably as a result. But there are still a massive 150 payments to go before the place is finally mine. My flat will be worth hugely more than the 50K I paid for it by 2016, but other property will have increased in value at an even faster rate and I'm really not going to be any better off at all. Owning even a broom cupboard in the London area will have to remain but a distant and unattainable dream, so in the meantime I'll carry on frittering away relatively-huge sums of money to pay the rent on my current E3 flat. Never, ever, multiply your weekly rent by 52, and then again by 25. The resulting total makes my mortgage look like the bargain of the century. And a bargain half-complete, hurrah!
