To not have paying the mortgage off as a priority

[BarchesterTowers]

We've bought a house which requires a mortgage which we can afford. Were in our early 50s and dont have a mortgage now, it was paid off by dh redundancy payment a couple of years ago.
There are raised eyebrows from people who think we should just sit tight with no mortgage.

For me, it would depend on the term of the mortgage, pension provision and security of employment.

If you're both in your early 50s, you may have private pensions that you can take from 60. The lump sum part of the pension could then be used to pay down the mortgage, or even clear it, before you both retire.

If you both have secure employment and are in good health, you're confident you can afford it, and you really love the house, I'd say go for it.

Mind you, we managed to pay off our mortgage a few years ago, and I wouldn't dream of taking another one, but that's partly because I have health issues that mean I needed to reduce my hours drastically. I couldn't have done that if we were still paying the mortgage.

I see what you are asking. Yes there is the ultimate goal of being mortgage free and many have it as an absolute priority. Imo its place on a list of priorities depends on size of a mortgage.
If I paid £1000 monthly, I would want to get it done sooner to free up that amount. If I paid £280 it wouldn't not as high up and there are other more important goals.
But yes. Going from no mortgage to mortgage will raise eyebrows because ultimately you are ignoring the very common "goal" of being mortgage free.

It won't be a huge mortgage if you currently own outright. As long as you have good pension plans in place I don't see why not. A small mortgage you'll get the best rates and payments won't be a burden. Rates are so low now. It's not like taking on a mortgage when rates were 10%.

If you really, really want to move then I would, if you are happy where you are though personally I would try and put aside the money you would be spending on a mortgage and save it for retirement; then you can easily afford to go abroad or whatever you wanted to do.

I'm in that position, once my divorce settlement comes through I can buy outright, combined with my dp it would be a decent budget but I want a forever house and for the kids to be able to stay ... the temptation to spend another £200k is very strong but that means £2lk a month in mortgage payments! No decisions being made at the moment for me thankfully but you are not alone!

PS only considering a 10 year mortgage in my case, I have 19 years until retirement.

Taking on a new mortgage in your 50s is likely to much more risky than doing so in your 30s if you are dependent on your salary to pay for it. What are the numbers (Ltv and monthly payments(, are your jobs secure, do you have pensions that kick in soon?

Some people with good pensions might be fine but it’s hard to judge as you’ve not given much information about costs or affordability.

It's entirely up to you. You've obviously decided that the cost of the new house is worth taking out a mortgage again, potentially delaying retirement or stepping back at work.

So you're benefiting from a larger house or one in an area that is 'better' whatever that means to you. Plus mortgages are currently very cheap money, so it's really not the millstone that it was 10/20/30 years ago.

We're not even thinking about overpaying our mortgage because the interest rate is lower than simply leaving the money in our current account, or just saving or investing elsewhere, plus it's less than £400 pm, and about 10% or so of our monthly income. If the position changed, we have a chunk of money that can pay off most of the mortgage any time we like. But currently, it makes little sense to do so.

I'm the same age as you and may well have to sell our house soon, interest only mortgage and as we both lost our jobs, DH is unlikely to ever work again and I can't find a job that replaces our benefits plus the mortgage loan and unless the bank will extend the mortgage we'll need to sell up to pay the capital.

If I was in your position I'd have sat tight as at our age new well paying jobs are hard to come by.

In my early 50s and 10 years left on our mortgage we nearly moved house which would have meant either a bigger mortgage or increased term..I was quite reluctant to do either! In the end we waited, then at 56 downsized, paid off the mortgage and never looked back! Now at 60 I'm able to retire, which is fab because I doubt I'd have the stamina to continue teaching for very much longer.

Obviously you should think about whether you could still pay the mortgage if one of you became too ill to work - the risk of this increases as you get older. A colleague of mine has recently had a serious health issue completely out of the blue in his mid 50s, that is likely to significantly change the work he can do, and hence the money he can earn, over the coming years.

Make sure you look at what savings, sick pay and death in service benefits you have, plus hopefully you will be able to increase your savings alongside paying the new mortgage.

I think you'd be mad to take a mortgage out now. What's to say that you won't (god forbid) run into some health problems in your 60s/70s, that mean you're unable to continue working full time? As much as we all hope that doesn't happen, we know life isn't always that kind.

Unless there's some reason that you desperately want to move, eg. you hate your current house/area, I think you'd be better off staying where you are and saving for an early retirement.

@BarbaraofSeville
Have you actually crunched the numbers? Paying off what we had left on our small mortgage 4 years early saved us much more money than interest would have generated on the savings.
Check here
www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

I agree with @bettybattenburg
We are mortgage free and I have no desire to ever have another one.
But it’s your life and your money and everyone is different.

We're a bit younger than you and went from a house where we had a couple of years left on the mortgage to a larger house with a 20 year mortgage. But we need the space (have 3DC), and we're in a better location. We can easily afford the mortgage and are overpaying. It is a very cheap loan to buy an asset so it's worth doing, it is our only debt (car etc paid for with savings). Some people are very risk averse and so want to be mortgage free but until you are retired there's no need. Don't discuss your personal financial situation with other people and then they can't comment.

Yes. The interest rate on our mortgage is 1.1%, our current account pays 1.5% on up to £20k.

We have other savings that pay 2.5% to 5% for regular monthly savings and when they mature, the money goes into an instant access account that pays 1.4%. I'm currently looking at a fixed term account to put a lump in that will pay around 1.8%. So all pay more than the interest rate on our mortgage.

We also have shares that pay a few % in dividends and premium bonds that returned 2% in prizes in the last year, although obviously those are not guaranteed.

It depends on your circumstances, no one on here can tell you if you're right or wrong. One size doesn't fit all.

DH and I are mid / late 50s and moved house three years ago, taking a mortgage to do so. It's a shortish term, so the repayment is fairly hefty relative to the amount borrowed. BiL told us we should be ashamed of ourselves and should prioritise "getting ourselves out of debt not in it" at our age. 🤷‍♀️

Its completely up to you. If you are financially able to keep paying a mortgage and are happy to do so then why not? None of anyone elses business.

@JosephineDeBeauharnais exactly that's the kind of comment we are getting - unspoken but its there.

It'll be quite hefty repayments. But we can afford them. If one of us dies the other one will have to sell up.

What is the mortgage money to fund? How much do you want to borrow?

Why wouldn't you take out life insurance so that if one of you dies the insurance would cover it without the other having to sell up?

I’m at the same life stage as you and unless you hated your old home or it was just not fit for purpose then I am inclined to agree with her friends.

I can no longer work as in my later forties I developed a chronic health condition. I had been as fit as a flea till that point. We can make an effort to eat healthily, exercise and not drink at all or a tiny amount but it can still happen. I was like that but it still developed.

We had been in the lucky position of paying off our marriage in our mid thirties due to invests made having a stellar year.

It’s done now, I’m just actually amazed you told people such financial detail. When we paid our off ours we didn’t tell anyone. Mainly because if people know you have money they are more inclined to ask for a loan. We have told a couple of people now that we have paid off our mortgage, the first was my sister a couple of years ago and that was because it was a direct question asto when we were going to you have paid off your mortgage due to the fact I don’t work anymore. But it was paid off about 15 years before we told anyone.

I wouldn't have done it, but depending on your circumstances and the numbers I don't think it's intrinsically unreasonable. Would want good insurance though, especially if it's not a mortgage either of you could pay by yourselves.

We’re mortgage free and it gives me such peace of mind. Particularly as the economic situation is so uncertain and both DH and I work in professional services roles which seem stable but could really go at any time. We have two young children, and the fact that no-one can take our home gives risk averse me comfort.

That said, if the children were off our hands, and we could afford payments and we were older, I’d think about it for the right house.

What I’m trying to say is, it all depends on your circumstances!