Does Buying a Home Mean 25 Years of Bad Debt?

Most people that buy a home will need to use a mortgage to afford it. Mortgages can last any time between 10 and 30 years with 25 years being the most common. This means that a home owner is often stuck with 25 years of debt. Is this a bad thing though? It could be good or bad depending on their situation.

Value for money

Good debt has several factors to it and one of those is that you have found a lender that will offer you a good price for what you want. This does not necessarily mean that you are getting the very cheapest mortgage but that you have found one that is a good price for what you need. You may also be looking for a lender with a good reputation, local branch, good customer services that can offer the type of mortgage that you need. Think about what is important to you and that should help you to pick the right mortgage.

It is also important to remember that you can change your lender during the mortgage period, you do not always have to stay with the same one. This means that you should regularly check out the prices of alternative mortgages to see whether you can find a better deal. You may have to pay charges for cancelling and for starting a new mortgage so take these into consideration when you are deciding whether to change mortgages as these costs may make it too expensive to swap. It might even be worth investigating what costs might be if you do want to swap before you even take out the mortgage as it could influence which one you decide to take out.

Manageable repayments

It is really important to make sure that the mortgage that you choose has manageable repayments for you. Think about how much money you will be able to afford each month. Perhaps you can afford to pay what you were paying in rent or you usually have some money left at the end f each month that you could use. It is well worth taking a look at your bank statements so that you can find out how much you can afford. It is all very well thinking that the lender will check this so you do not have to, but it is worth looking at yourself. They may look at your past few bank statements and think that you will be able to manage. However, these may not be typical months and perhaps you know that some months you will find it a struggle. If this is the case then you have to decide whether it is really worth getting the mortgage or not.

Good choice of property

It is also important to choose a property wisely. Again you may trust the lender on this as they will have a survey to determine the value so you will know that if they lend you the money then it is worth what you are borrowing or more. However, you need to consider things that they may not know. Think about the area and whether it is likely to go down in value. If you have lived around the area you may be aware of what it was like and how it is now and be able to predict what might happen in the future. Think also about the building and whether there is any reason why it might fall into disrepair or otherwise be affected so that it becomes damaged and therefore devalued. Consider things like flood and subsidence risk and look at other properties in the area to see how they seem to look with regards to their condition.


So it is important to think about a selection of things before taking out a mortgage. Having a mortgage will not automatically put you into 25 years of bad debt but this will depend. As long as you have a good mortgage deal and you check regularly to make sure that remains, you can manage the repayments and the house stays in good condition then you will have good debt and not bad. You will be avoiding paying rent and you will end up with a home that your children can inherit. However, if you take on an expensive mortgage, struggle to manage the repayments and use the money to buy a home that goes down in value then you will certainly have taken on bad debt. This is unlikely though and so as long as you do some research first you should be fine. If the idea of the debt stresses you then this is not good. Paying for your own home can be much cheaper than renting and there should be no need to stress if you take out a mortgage where you can manage the repayments easily.

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