To consider a 25 year mortgage at aged 38?

[privateporcupine]

I have a small mortgage just now, one year into a 15 year term. As I bought through RTB, I have to stay here for another 2 years.

Once those two years pass, I plan to move and take a bigger mortgage, hopefully with a deposit of at least £15/16k. I’ll be nearly 38 by then and a 20 year mortgage would be ideal, but assuming I’m still single, on about £25/26k, with a teenager at home, a 25 year mortgage is probably more likely. Meaning I’d be 63 when I pay it off. That seems quite “old” and doesn’t leave long to maximise savings for retirement.

I just wondered how many others have been that age or will be, and how you’ve found it?

Thanks.

I'll be 68.when I pay off my mortgage. Life is different for different people. Not too old at all.

It's worth considering your pension as well as the mortgage though. Increasing tax-free pension payments now, while you have 30ish years of paying in, reaps much larger rewards than a last minute sprint to save after the mortgage is cleared.

I've done this. The plan is to over pay when practical, and also to shorten the term when the initial 5 year fix comes to an end. The plan is that fixed outgoings will decrease (childcare!) and income will increase (promotion). But it might not work like that, or I might spend all the extra money on fripparies and holidays - so long as I pay the basic mortgage amount, it should be ok.

Banking regulations have changed and it's not beneficial for banks to lend after sixty, so you may have issues getting a 25 year mortgage, try for 22 years instead, if you can afford it you likely get a better rate and pay less overall

I'm 38 and we've just got a 27 year mortgage. We play to over pay it though.

plan*

Thanks for all the replies. Lots of good advice. The additional voluntary pension contributions is something I definitely need to start, even an extra £20 a month, and I think our pension scheme is increasing to something like 7.5% this year.

If I continue to overpay as I am just, I think I’ll have a good 20k equity when I sell in two years, and I should be able to save a bit extra on top of that.

And yes, I do hope I won’t be alone forever anyway! But I will plan as if I am. I’ve been single so long, that I can’t imagine putting my financial security in anyone else’s hands. That could actually be difficult if the time comes.