Rent or mortgage does it matter??

[Catty1720]

Me and my partner rent a lovely 2 bed apartment for 825 per month. We comfortably pay rent and bills between us and have enough left for the month.
He’s older than me (47) I’m 31.
We don’t have money for a deposit as we had to use savings when I became sick and needed time off to recover. My partner never ever begrudged this as a lot of the savings were his. We live in a town near to London so it is pricey to buy (or in my opinion it is)
I worry we don’t have a home of our own and probably due to ages never will. I save money for our DD so she will have something when she’s older it won’t be a lot but something.
Should I worry we won’t ever have a home of our own?? Am I unreasonable to stress over it? Would you say There’s pros and cons for both?

I bought my first house when I was 47. And I was self-employed which makes it a lot harder to get a mortgage than a full-time job.

Definitely work towards buying a place. Even just an apartment. Can you imagine paying rent when you’re in your 80s?? How will you manage if you DON’T buy?

I would never want my pension to be going on rent. Yes, if your boiler packs up and you need to get it replaced it'll cost a lot, or if your roof needs replacing it'll be $$$. But from my experience mortgage payments are cheaper than than rent (mine is £370pcm cheaper than my old flat) so you build up a reserve for such events.

Renting in retirement is no fun. You’ll have to find the rent from your pension. It’s preferable to have your own house with the mortgage paid off before you retire.

In my experience, home ownership leads to an increase in wealth and offers the chance to downsize and release money to fund early retirement etc. Rents only go up so you”re always having to find more money.

I’d also look carefully at your pension - with private pension even if you pay in a decent amount, the pay out is shockingly low over retirement and won’t necessarily keep up with inflation.

[quote NeedCoffeeToSurvive]@Sway19 I am clueless about property ownership, buying/selling a property and mortgages because I don't own a property and don't have experience of this. I moved in December, from one rental to another, and it cost me probably around £2500. Like I said if we owned this property, I'd probably sell instead of fixing the issues because the property has a low value already, the issues could cost thousands to fix and won't actually add any value to the property.[/quote]
Selling and moving could cost you £5-10k alone, and if a survey highlighted the fault with your house it’s likely the buyers would want it resolved or extra money knocked off the purchase price.

So it definitely is not feasible to move every time there’s a problem with your house. Dealing with such things is part and parcel of home ownership, and one of the very few benefits to renting.

@CakeRequired

Would you be able to get a mortgage though that's affordable given your ages? He's 47 so getting close to retirement, or at least a lot closer than you. A bank might only lend to him until retirement age, so you'd have 20 years probably max if they are picky and go by his age. That means the repayments will be larger, and as you have no decent deposit, will make them even bigger.

However if you can afford it, go for it. There's nothing stopping you really, it is just what a bank will lend you that's preventing you. I'm not sure if they would take into account your sickness either to be honest.

Talk to a broker and see what you can afford. You'll never know unless you try.

47 isn't close to retirement? We bought our house with a 21 year mortgage when my DH was 44 . Hes late 50s now and not able, or planning to, retire any time soon.

Buying is better if you have the deposit, when I’m 55 (a few years away yet)I will be £500 a month better off as my mortgage will be paid off, my next door neighbour same age as me will still be paying £1100 + per month rent. Having said that she is very happy a new boiler cost me £4000, hers cost her £0.

Some utterly bizarre viewpoints on here. Of course a mortgage is better longer term as hopefully one day, it will cease to exist following full payment. You then have the ability to sell the property at the end - should you wish to - and all the proceeds from the sale are yours.

I could rent out my house for over twice the cost of my mortgage. I have owned the house for fifteen years now. If I don’t move, the mortgage will be paid off in less than ten years. So I will have very low housing costs.

I can think of few circumstances we’re renting is preferable to owning

We will be renting forever unless we come into enough money to buy outright. Neither of us earn enough to save for a deposit while paying rent and credit scores are shocking.

Pay a mortgage. Over the years the payments seem easier. For example, my first home was a two bed Victorian terrace at£90 pm. Some months it was a struggle. But over time wages go up, rents go up, but mortgage repayments seem lesser.
after 25 years of payments, you now own a property. Assuming you upgraded to bigger and better a few times over the years, you’re now in a position to sell your 4 bed 3 bath 3 storey town house in the city, and you can buy a 2 bed bungalow way beyond the suburbs with a huge amount of cash in your bank from the sale of your previously owned house, thus topping up your pension pot. Life is good.

Alternatively you can rent, pay someone else’s mortgage, never have any assets in your own home and pay a little bit more to your landlord every year. U til the year you retire and struggle to pay your rent. Housing benefit will pay, but not for the spare bedroom/s

Your choice.

I think we will just sit down and save like made me don’t over spend anyway we have take away once a month as a treat on payday but that’s it think I’ll set monthly targets and start getting us on the way to a home

It's a no brained really. Rents will go up whereas mortgage goes down the more you pay off and with a mortgage one day it's all paid for and you are £££ better if each month.

You also retire with £500k or whatever on equity to give you a comfortable retirement.

The fact that you had to spend your savings means that right now, one persons current income is not enough to cover your monthly expenditure.

So how is that going to work when you are both retired and living on pensions?  Pensions are taxable. Do you have any clue what your  retirement incomes will be after tax?  Will they cover your current expenses?

Mortgages have a limited life and most sensible people arrange it so that they have fully paid off the mortgage before they retire on smaller incomes.

You'll be paying equivalent rent to the end of your lives. When one of you dies, the survivor still has to pay the same rent.

47 isn't close to retirement?
We bought our house with a 21 year mortgage when my DH was 44 . Hes late 50s now and not able, or planning to, retire any time soon.

It's only 20 years away which given an average age of 80ish, is only a quarter of your life. He's a lot closer to retirement than she is. He's really already worked over half of his working life, so yeah he is getting close.

They also have no deposit. They've used all of their savings. And they are just outside of London where houses are more expensive. You had a deposit by 44. They are 3 years ahead and have none, so by the time they save a decent deposit, he could be in his 50s. If you tried to save now for a deposit and then get a mortgage, how do you think you'd fare? If it was down where op is?

It's not impossible, it's just a lot more difficult than if they were both in their 20s/30s. They'll be looking at a max 20 year mortgage and that's only if they could buy this year. It's not looking like they can, so the monthly payments will just keep going up the longer they don't get one. They'll be better off speaking to a broker, working out what they need, what they can afford and which, if any, banks will give them a mortgage. Given the current crisis, that may also set them back depending on their jobs.

""You also retire with £500k or whatever on equity to give you a comfortable retirement.""

Not a given
If you buy for 120 in north you not going to have 500k equity in 20 yrs time unless inflation then 500k is not worth 500k

Depends on how much you've got in your pensions. There is little chance my pension will cover rent. I have have a mortgage so the house will be owned outright by the time I retire. I had to move around 45mins further out from London area than where we lived already (Zone 8 even then) to afford somewhere. Longer commute now but we pay less rent than next door and we have the security of being able survive on our pensions.

I'd use those savings towards a deposit - a much better use of the money.

www.money.co.uk/mortgages/how-to-get-a-mortgage-if-you-are-an-older-borrower.htm

My mortgage for my 3 bed semi which I bought in 2001 was less than £200. We paid it off last year.

The house next door rents for £650 per month. They were renting when we bought our house then. Even in 2001 the rent was £450. And they're the same tenants

It's a no brainer really. If you can manage to buy then go for it. Renting long term is a mugs game.

You should buy something. Why do people always want to buy houses? I'll buy an apartment because I can afford it. Then when you die your daughter will inherit it. The difference in wealth between families who rent and families who buy will increase generation by generation.

My experience:
I've been mortaged (15 years), then rented (7 years, 2 different properties), now mortgaged again (forever home).

Renting seems stress free at first after mortgageing for years.

First rental property:
Me: ''Oh i just ring the agent, a plumber (or whatever) turns up and goes away again and i don't have to pay. Yay! The whole house is spotless and pale cream, i can live with that, the agent is really nice, just sticks her nose in every 6 months and goes away again. The rent is affordable - i'm happy. Feels like home'' :) All good for 5 years.

One evening the landlord rings. He's selling
Panic.
Got 3 kids at village school. We need x bedrooms. We need to pay similar amount per month. We need a garage (DH is builder). We need to be on a bus route for the older kids (rural). We need one which allows pets (cat). We need a garden. A little shop within walking distance for a pint of milk. We need parking for 3 vehicles. We have 3 months to get out. That's find somewhere, apply, be accepted, orgainise the move and be gone. 3 months - from one sudden phone call at 8pm. It's not our bloody home at all and it never was :( I feel stupid and upset and so worried.

We find somewhere and we're in it within the time by two weeks. The most stressful time of my life! We have the bedrooms and the garden. We have the bus route for the older ones. We have the garage. We have the parking space. There's a village shop (open about an hour a day, but still ...) The landlord allows the cat. However I have to drive youngest to school and back every day. The place has damp problems. The village is quiet as a grave. Nothing for the kids. My mates are miles away. Nearest doctor is half an hours drive away. No central heating. The shower keeps dying and the landlord is funny about fixing stuff. He likes a lot of inspections. Regular threats about the rent being too low. Wont allow decorating. The damp problems get worse. I have a baby! I can't decorate her room. No nursery or school nearby. It does not feel like home. No rental ever will now. I can't sleep.

The damp gets worse. Landlord does fuck all. We want out.

Now we're buying. We're financially struggling but we chose where to live. The kids can get where they need to get. The new baby (now 6 already) goes to the little school across the road. We're building the bedrooms and we have the drive and the garage and a co op and i can have as many darn cats as i like and repaint the house every week if i want and we can stay here till we both die if we fancy it. No one is going to make us move ever again. We've turned it into a bloody great building site - but it's our bloody great building site for as long as we want it. Even though it costs more than the rent, it's worth it. We are both sleeping again.

Renting IS paying someone else's mortgage and if you have a choice don't do it. I'm sorry for anyone stuck in the rental trap. Genuinely.

**You also retire with £500k or whatever on equity to give you a comfortable retirement.""

Not a given
If you buy for 120 in north you not going to have 500k equity in 20 yrs time unless inflation then 500k is not worth 500k**

Well yes, which is why I said "or whatever amount"

Essentially you have whatever you put in or more. My point was at the end of if you have hundreds of thousands of pounds that are yours.

I would always buy if possible. Me & DH are 50, our mortgage will be paid off in the next couple of years. We’ve had a mortgage for 20 years. We have friends who are the same age and pay the same in rent as we do on our mortgage. In a couple of years time we will have an extra £700 a month and an asset of £300,000 but our friends will have to pay £700 a month into retirement. I think it’s definitely a consideration for retirement whether your pension will cover the cost of renting.

@NeedCoffeeToSurvive

We rent, 3 bed house for £695 a month. We have a two year old and 2nd baby on the way and whilst I'd love to own our own home, the idea of the stress, potential to lose so much money if the sale falls through, risks if anything goes wrong with the property absolutely terrifies me. At least with renting, we know any faults are not our responsibility to fix.

We have a rather significant plumbing issue with our rental property that might cost a couple hundred to fix now, but if left could cost thousands because eventually the pipes will fail, this isn't our responsibility to fix so I don't have to deal with the stress of the work and cost. If we owned this house I'd probably sell rather than deal with it.
Plus we know if we ever want to move, just give our notice period and find somewhere new. We're not tied into a property with thousands of pounds on a mortgage. Another bonus is the money we have that could be used to buy a property we can use for other things.

Very bizarre abs rather ignorant attitude. You'd rather sell a house that you owned rather than do a re-plumb and new boiler?

I don't understand why anyone would ever rent if there was a remote possibility they could buy. Rent always goes up - and your mortgage will only go down. We paid off our mortgage before DH was 50, we have lived "rent free" if you like for 6 years so far - and we put that money into holidays, savings and for our kids. We encouraged our eldest DS to buy a house - his mortgage is now half what his rent was, a 3 bed house (owns) against a 1 bed flat (rented) - please tell me why you think this is good?