House buying post-divorce

[TeaCakeandWarmHugs]

Hi,

I’m not post divorce just yet but things are approaching an end. I definitely want to sell up the family home which I am currently residing in. My stbx has another property so he is living there.

I have seen a house I’d love in a village to the outskirts of town (which I’d prefer now I’m getting older). The purchase price is £270k. I am set to get around £170k from the family home (mortgage free). I’m just wondering if I can afford it on my own and at my age (almost 51). Salary £48k and I have an NHS pension (from 1996).

I have the youngest child (15) living with me and the eldest (19) is at university.

I am conscious of the rise in energy bills etc. and feel very nervous about being in my own financially. Ideally, I would like to be mortgage free but houses at £170k here are pretty desperate!!

Has anyone else purchased anything of similar salary and house price? I’m just trying to work out if I can do this (at my age) without substantially reducing my disposable income as I still want to live!!

I'll start with the usual caveat that this is not financial advice! I work in finance but not as a financial advisor and I know nowhere near enough about your financial circumstances to advise. However!

I can speak in generalities. A £100k mortgage over 15 years will at the moment will probably at most cost £800 a month, which is about 27% of your net salary. So very doable and a normal amount for a mortgage.

In my sector of the industry (investment management), we expect interest rates to stop rising at 4.25%. Obviously that is no guarantee and a year ago before Trussonomics we thought interest rates would stop rising at 3%. However, there is a view that inflation will come under control as the current rate rise works through the system and the extra 0.25% is the worst case scenario. There is also a widely held belief that rates will drop to 3% by 2025, but again that cannot be guaranteed.

Another option you will have when you retire though is to take 25% of your pension as a tax free lump sum so you could also calculate what you expect that to be and extend your mortgage beyond 15 years with a view to clearing the balance with the lump sum. Obviously, however, this will mean you pay more interest over the next 15 years as the capital borrowed will not reduce as quickly.