Boat Mortgage or House Mortgage?

A boat is a toy - it's never an investment for your future. And you need to think about your future because it will come about a damn site quicker than you think.

A house mortgage is a good way of saving for the long term.
 
No mention of the car situation; having an old car has been my way of paying for a cheaper boat. Nealy bought a new car once and luckily just before signing the contract saw the mistake I was making and 6 mnths later had a bigger boat until 6 mnths ago have never spent more than £1400 on a car one car was £25 and lasted 2 years and did 60000 miles.

First boat £1100 ply wood 25 footer
2nd 25' little scampi (1/4 tonner thing)
3rd boat £15000 9T hillyard
4th Nic 36 cost more but all paid for.

First two cruised and raced in the channel.
Did a Biscay circuit one summer inthe Hillyard.
Ireland and S Brittany in the Nic.

The only work I pay for is sail repairs and having the boat lifted out, which I can not afford in Jersey.
 
I think you will find most of the people that post on here have what I would call a stable background (except for a few divorces) most have had reasonable good jobs (reasonable pay) and are financially savvy. House prices have increased in value substantially so for many an initial investment of say a loan of £75k plus 10% deposit and repayments a bit more in rent they are now sitting on properties say worth £200k -(figure are meant to show relative return on investment so are indicative) but its a long term committment and a static lifestyle.

I am in a similar position and with a reasonable income can look foward to retirement with a few properties and own a boat and race a dinghy.

I would say that, pleasure for £s, the dinghy is hard to beat.

On here you will find many pose the question of what boat to buy, but in reality all boat choices are a complex mixture of compromises, cost, size, fast racing boat to comfortable cruiser.

Life is the same in many ways its a set of compromises. Investments in the future at your age now can bring dividends but it means putting some things on hold now others, that i don't think you will find here, would say live now and let the future take care of itself. many of these (if sailing is their dream) you may find on the livaboard forum) and they have bought a basic seaworthy boat, given up their job and are sailing round the world.

The biggest lottery in life is how long we will live. Some have dreams they don't realise as they die first. Unless you do dangerous sports drink or smoke excessively, ride a motorcycle you are statically probably going to live to be 100.

If you have no dependants then it really is your choice, go for pleasure now and make do later or work for financial stability initially and enjoy a comfortable life style late. As other suggest it may be possible to go for the finacial stability now and do sailing either other peoples boats, a dinghy or a cheap older boat. Others have suggested living on the boat.

Only you know what suits best your personality, your earning power and your dreams - its your call.

Good luck with it but please come back and give us updates on how its going.
 
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i too jumped on the property ladder 5 years ago.still have the house have probably not made too much profit but the halifax has gained £60k.
if i were you go for a big yacht you could live on and afford.
houses r going nowhere like wages.on top of that the summer months you will be smiling lots and all the house owners will be cutting the grass whist your sailing.i took a marine mortgage out with;http://www.lombard.co.uk/assets/marine/
i believe you have to put 20% down.
good luck if you wish to chase your dream and your holidays can be sorted too.
 
I did a similar thing, bought boat (as in picture) when i was 25 then house on one account mortgage.No need to spend 50k on the boat.Bear in mind the boat mooring,insurance,fixing costs etc. Think ours works out about 4k for 32 footer.
 
taking a long term view, this was my way......
buy that first house, do it up, sell for profit and then repeat several times, each time buying a bigger better property, By the time you are 50 you will own a large desirable house outright.
Sell large house and downsize by say a £100,000 and buy a great boat with the released capital. You are now 50 and own a good boat and a good house outright. Enjoy.

You can of course compress the timescale depending on how much work you put into those houses. I actually managed it by the time I was 40 but you are starting late. ( yes it IS later than you think)
While you are doing all that, no reason you can't run a modest boat for a bit of fun as you go along.
 
blueglass said:
taking a long term view, this was my way......
buy that first house, do it up, sell for profit and then repeat several times, each time buying a bigger better property, By the time you are 50 you will own a large desirable house outright.
Sell large house and downsize by say a £100,000 and buy a great boat with the released capital. You are now 50 and own a good boat and a good house outright. Enjoy.
.
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Much what we did, except instead of downsizing, we UPSIZED when we moved from the south of England, to the much cheaper north of Scotland.

Much bigger house, AND it released capital to buy the two rental properties.

And we still have the scope to downsize and release more capital, which we almost certainly will do when ready to retire (early I hope)

So come retirement there will be our two rental properties to sell, plus downsizing our own house will give us a much bigger lump sum than any affordable pension will. But I do have pensions as well.
 
Just stumbled across this thread and had to add a quick comment. Not going to say either way on whether you should buy a house or a boat, but just wanted to point out a lot of the advice on here appears to come from the slightly older generation (I don't mean fogies - no offence meant! ;-). We (by which I mean, younger generation) live in a very different world to those over the age of 40, so I see a few comments advising how jumping on the housing ladder will magically allow you to scale the ladder of prosperity. This is now unlikely for our generation unless you believe houses can keep going up in value for ever without substantial wage inflation to match.

For those under 40 (and it gets worse as you move down the generations further to under 30's and beyond), things are going to be pretty stagnant for some time as far as I can see.

This isn't meant to be a blame-the-baby-boomers post by the way, as I don't buy into that camp. Just wanted to point out that young people need to open their eyes a bit and look to other avenues for becoming more prosperous. The recent housing boom(s) have been pretty exceptional and put highly valued housing assets into the hands of the older generation who paid peanuts for them 10-15 years ago and are now mortgage free. (not everyone, but it broadly holds true).

Totally sucks feeling your rent is paying off someone else's mortgage though, I totally sympathise. But it's either that or losing huge amounts of interest to your bank on your mortgage and, probably, living in a shoebox in a **** area.

Perhaps there is something to be said of living on a boat and saving your rent/mortgage while the house prices are so high compared to wages (assuming you could sell the boat for not too much less than you paid for it when you finally decide to get a mortgage and need to raise a deposit). Wish I had the guts! Anecdotally I do hear of a lot of younger people buying house canal boats for this reason.

Anyway, I'm sure I don't need to tell you this sailingmonkey, but did just want to add a voice of balance! Take a look at all advice you're given with a good long look of perspective (including mine!)
 
Whether or not you think buying a house is a route to riches, or a noose round your neck, consider this.

If you just buy one house, never move, never aspire to a bigger house, just stay in the one you bought, and pay off the mortgage in 25 years, then you will have a real tangible asset.

BUT most importantly, you will have a house you own outright. That's important for your old age, when you retire. IF you are lucky you will have a pension that's consideraly less than your salary when you worked, so you will need cheaper living than when you worked.

By comparison, if you choose to rent, you wil just keep paying out rent forever. If you choose that route then you WILL have to put a LOT more into pensions, because come that glorious day you retire, you will STILL have to keep on paying rent for the rest of your life. So you WILL need a very very large pension to pay for it. Or become homeless.

The other thing that makes buying better than renting is inflation. Your mortgage will stay roughly the same (give or take rises and falls as interest rates change) so as time goes on and your sallary rises, your mortgage will become less of your income. By comparison, rents will just rise and rise as inflation rises.
 
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Totally agree ProDave about wanting to be mortgage free when you reach retirement age. I guess my only comment on that would be that while that in recent times, people have been becoming mortgage free in their 40's and 50's, now the average age of the first time buyer is 38 or something like that, meaning you won't be mortgage free until you hit 65-70. So OK, just in time for retirement, but also just in time to start (possibly) enjoying failing health etc. Sorry, I'm probably being miserable and depressing. ;-)

I guess then it becomes a question of whether you want to do the whole delayed gratification thing when it comes to sailing or find another route to boat ownership while you're still young enough to do that blue water ocean crossing...

** Mutters to self: "Shoulda sacked off Uni and got a job and mortgage for £50k aged 20 instead" ** ;-)
 
I think the only thing we can all agree on is the present generation are going to have it a lot tougher than we did.

The thought or starting your working life with £30K or more of student debt, hard to get a mortgage, much poorer returns on pension investments and having to work longer before you can retire, are hardly things that are going to make you fired up with entheusiam.

Still you are going to live longer than us :)
 
Personally I think we, the younger generation, have set our aspirations far too high based on what we've grown up with. Look at young people in places like Greece who have to deal with comparable living costs but only on 600-700EUR a month wages. I also think we're going to have to get used to the idea of shared housing and take a leaf out of the book of young people coming across from eastern europe who you often see cramming 10 into a 3 bed house or whatever. We've all come to expect being able to raise a family in a 4-bed semi, each kid having their own room, with a nice car on the drive, foreign holidays and a 32-footer down the marina (to keep it vaguely on topic!), whereas historically this has not been the case (3 kids to a room etc.). I think as a generation we're all getting a bit depressed as we're realising that some of the things we'd subconsciously assumed middle class life and white collar jobs would bring us, er, aren't really realistic. Perhaps we should all move to a much poorer part of the world so we realise that we're still pretty well off and that all these life aspirations are really the exception, not the rule.

Goodness, I am in a black mood today aren't I? ;-)
 
ProDave said:
BUT most importantly, you will have a house you own outright. That's important for your old age, when you retire. IF you are lucky you will have a pension that's consideraly less than your salary when you worked, so you will need cheaper living than when you worked.
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In round terms, you repay about three times as much as you borrow on most mortgages. That's an awful lot of money you could be saving for your dotage.

I'm not disagreeing with anything you wrote, just pointing out that there are financial downsides of mortgages too. Most Germans rent and I don't see them on the street in their seventies.
 
Ubergeekian said:
In round terms, you repay about three times as much as you borrow on most mortgages. That's an awful lot of money you could be saving for your dotage.

I'm not disagreeing with anything you wrote, just pointing out that there are financial downsides of mortgages too. Most Germans rent and I don't see them on the street in their seventies.
Click to expand...

So how does it work in Germany? Do rents reduce when you retire? or are their pension provisions so much better to give you the higher pension you need to keep on paying rent until you die?
 
ska_mna said:
Personally I think we, the younger generation, have set our aspirations far too high based on what we've grown up with. Look at young people in places like Greece who have to deal with comparable living costs but only on 600-700EUR a month wages. I also think we're going to have to get used to the idea of shared housing and take a leaf out of the book of young people coming across from eastern europe who you often see cramming 10 into a 3 bed house or whatever. We've all come to expect being able to raise a family in a 4-bed semi, each kid having their own room, with a nice car on the drive, foreign holidays and a 32-footer down the marina (to keep it vaguely on topic!), whereas historically this has not been the case (3 kids to a room etc.). I think as a generation we're all getting a bit depressed as we're realising that some of the things we'd subconsciously assumed middle class life and white collar jobs would bring us, er, aren't really realistic. Perhaps we should all move to a much poorer part of the world so we realise that we're still pretty well off and that all these life aspirations are really the exception, not the rule.

Goodness, I am in a black mood today aren't I? ;-)
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I think your right about .But I reckon there are many more little boats about now than when I was in my twenties at prices affordable to the new urban poor!
 
For £100k you could buy a 20 y.o. 42-45ft liveaboard yacht with a £80k 10 year marine mortgage (20% deposit needed) it would cost you about £800 pcm (you can scale the boat down for a smaller mortgage, deposit and pcm). At 20 years old (if a good make/model) the boat probably won't depreciate much more although there will be maintenance and marina costs. At the end of 10 years you will have effectively saved a deposit a for a house and had 10 years of fun sailing too.
 
Phideaux said:
For £100k you could buy a 20 y.o. 42-45ft liveaboard yacht with a £80k 10 year marine mortgage (20% deposit needed) it would cost you about £800 pcm (you can scale the boat down for a smaller mortgage, deposit and pcm). At 20 years old (if a good make/model) the boat probably won't depreciate much more although there will be maintenance and marina costs. At the end of 10 years you will have effectively saved a deposit a for a house and had 10 years of fun sailing too.
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And it will have cost you something like 50k in interest... pus 4k per annum in moorings... so thats 40k... and then of course there is the maintenance.... so say another 20k if your lucky.... so whats that 110k (On top of the 100k purchase price) to own a boat worth by now probably around 80k.

I can think of better ways to save for a deposit....
 
ProDave said:
So how does it work in Germany? Do rents reduce when you retire? or are their pension provisions so much better to give you the higher pension you need to keep on paying rent until you die?
Click to expand...

Bit of both, I think. If you're renting it's financially much easier to move somewhere smaller when you retire, or earlier, when the kids leave home.
 
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