Should I downsize to be mortgage-free?
Generally, homeowners downsize when they retire, and retiring with no mortgage is more favoured. That doesn’t mean that you have to have your mortgage paid off before you retire – downsizing can allow you to retire early, and make your retirement years more enjoyable when you have more financial freedom.

When homeowners look at downsizing, there are several common reasons that lead to this decision. Often, downsizing is a natural step for retiring homeowners, but there are plenty of other reasons – one of the most popular being mortgage-free. We Buy Any House look into downsizing in retirement and why some homeowners choose to downsize to be able to live mortgage-free.

“I need to sell my house fast!” – Get a cash offer for your house today!

Do I have to downsize when I retire?

While a lot of homeowners choose to downsize as they approach retirement, it doesn’t mean you have to. Some will downsize earlier, in preparation, and some decide that they don’t want to downsize and are happy in the house they live in now. Downsizing is also a very vague term, so you might find that when you downsize you don’t buy somewhere much smaller, it’s just more suitable to your needs as you age. It’s becoming more common for middle-aged homeowners to start thinking about downsizing if they currently own a family home that their children have moved out of. Instead of buying somewhere small, they choose to buy a house that they can still live in when they become less mobile, like a house with bedrooms downstairs rather than all of them upstairs.

Some homeowners also find themselves deciding to downsize early simply because they find a house that they love. Regularly, homeowners have a plan to downsize when they look to retire but come across a property years before that they think is perfect for them to spend the rest of their life in. At this point, their main interest is to sell the house that they own now and be able to buy the other, rather than wait until they’re ready to retire and live mortgage-free. If you find yourself in your position, you might even find that you’re able to retire earlier than you expected. Overall, it’s down to personal preference and circumstances, so take some time to think about what will be best for you and your future.

Will being mortgage-free make my retirement easier?

When you retire, your income will usually change fairly dramatically. It will depend on your pension and how you saved before you retire, but most homeowners look to save costs when they stop working. Generally, the biggest cost a homeowner has is their mortgage, so not having to pay this gives more flexibility in your retirement.

Downsizing to be mortgage-free is a popular move for homeowners that still have a while left on their mortgage term currently, but have enough equity in their property to let them buy somewhere smaller outright if they sell.

Being able to live mortgage-free gives you more freedom when you’re retired, and will also allow you to decide in the future what happens to the house, as you’ll own it in full. This means you can leave the house to someone as an inheritance, rather than it needing to be sold. It also gives homeowners one less financial tie to think about, letting you fully enjoy your retirement and not have to worry about your income each month.

‘Can We Buy Any House help me sell my house?’ – Learn how we can help you today!

Do I have to wait until I’m mortgage-free before I retire?

While lots of homeowners choose to retire once they’ve paid their mortgage in full, it doesn’t mean you have to. If you’re in a position where you can afford to pay your mortgage and your day-to-day living costs comfortably without having to work, then you can absolutely retire. Choosing the right time to retire is down to you and your lifestyle, so don’t feel that you have to make the same decisions as others.

What are the benefits of being mortgage-free?

Homeowners aim to be mortgage-free to give them more flexibility in their monthly costs, and generally, your income will reduce when you retire. Being mortgage-free in retirement means you don’t have to factor in your monthly payment into your income, giving you more freedom each month with your money, but it also gives you more stability. If you retire too early and still have several years left on your mortgage, you might find that in later years your savings start to wear thin. At this point, some homeowners have found themselves having to go back to work to support themselves. Not having a mortgage reduces the risk of falling into this kind of financial difficultly, and leave you free to enjoy your retirement fully, however you choose to spend it.

It’s important for homeowners to plan for their future and decide where they want to be when making a decision about downsizing. Often, older homeowners will look to move closer to friends or family when they retire, and so this will play a big part. Depending on where you’re looking to buy, you may struggle to buy outright anyway – especially if you’ve lived in a cheaper area for the majority of your life and are looking to move into a more expensive area. In this case, keep in mind that downsizing doesn’t always mean living mortgage-free. Making sure that you know what you want from your retirement will help you decide when to retire and if downsizing is the best decision for you.

If you’re looking to downsize and want a quick and easy sale, get in touch with We Buy Any House today. We can provide you with a free cash offer and show you how you can achieve a sale in as little as 7 days.

How do I sell my house fast?

If you’re looking for a quick house sale, you’re in the right place. We Buy Any House can get you a free cash offer on your property and show you how you can have your house sold in as little as 7 days. If you want a quick house sale, get in touch with us today.

Back to all articles