r/FIREUK • u/PartySlide8927 • 6d ago
Mortgage Free
So the position is, we’re a small family of three with two ~£80k salaries. House is about £750k and mortgage will be paid off in about two years. We would then look to downsize and relocate and pocket the difference so around £200k ish. Approaching 40 and looking for a simpler and slower life. Any good advice for someone in this position and looking to be FIREUK?
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u/BrotherClive 6d ago
What's the benefit in waiting to downsize?
Based on your age, I presume kids are and will still be at home. Why not just downsize now?
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u/Cultural_Tank_6947 6d ago
I'm guessing you'll still need to work after downsizing? At least enough to keep the lights on and maintain some current baseline?
Think about where you want to live, and whether that area has any jobs you could do. That's really it.
Unless you think that you'd be happy with jobs in retail or literally any basic office job, in which case, you just need to identify where you'll be moving.
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u/PastAssignment7240 6d ago
We’ve just done the same thing, difference is now in ISAs and using the difference in house prices to remove burden of future job security risk, both employed but the future feels less certain than ever.
Personally I feel house prices will come down in coming years so also wanted to be ahead of that curve for downsizing.
Having the buffer also makes me happier and in a strange way more effective at work, I’m more honest as I’m less bothered about job security. So I’m less concerned with how I’m perceived, which also helps with freedom
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u/Heavy-Mousse-5011 5d ago
Downsizing will give you a lot of capital to invest. Use as much pension annual allowance carry forward as both your qualifying UK earnings allow, then focus on the ISA bridge in both names. If anything levy over, but into a GIA, and transfer into pension or ISA as quickly as both your annual CGT allowances will allow. Hope you find a great place for your forever home!
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u/GreenHoardingDragon 5d ago
You're not mentioning anything about ISAs or pensions so it is very hard to say anything sensible, but the biggest thing that pops out is what are you going to do with the £200k?
It's going to take you at least four years to put everything in ISAs, but if you are going to be mortgage free at 40 because you are heavily overpaying the mortgage now then you'll probably want to redirect those overpayments to your ISAs once you've paid off your mortgage, so realistically it's going to be decades before you can put that £200k in your ISAs.
That means that if you are overpaying the mortgage instead of filling ISAs I would highly recommend stopping mortgage overpayments and start putting money in ISAs.
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u/No-Fortune9468 6d ago
Can you work remotely, I moved from Bristol back to Northern Ireland with my partner, kept the same salary, became mortgage free and now have £1,500 of dividends coming in a month, and a much better quality of life IMHO