Increasing mortgage later in life

[mortgagewisdomplease]

I feel a bit ignorant asking this, but I know MN is always good for advice!

DH and I have had a mortgage for years, but it's now pretty small - I guess about 1/12 of our house value. Our income has recently increased substantially, and we're thinking of upgrading to a bigger/nicer property. We're mid/late 40s and hoping to retire in around 15 years. We could afford a much bigger monthly mortgage payment, but equally we want to leave enough to enjoy life and also continue saving for uni fees etc.

My main question is, if you take out or hugely extend a mortgage at this age, should the term only be for the amount of time you expect to be working - or for longer? It's not clear what will be happening in 10 or 15 years time - either one of us could have expanded our salary (though it's unlikely to be a sudden massive hike). It's also very likely that we will ultimately inherit quite a bit of money from fairly wealthy parents - but I realise that that should never be totally relied upon, and that the timing is impossible to predict.

I'm just not sure what is advisable or possible. The kind of house I'd really like would be much more affordable if we borrowed the money over 20 or 25 years, with the caveat that we would quite possibly (sadly) have inherited the money to pay the mortgage off before we retire - and if not we'd always have the option of downsizing again.

Alternatively, we could either limit the term to 15 years and borrow less, or borrow the same amount but really push ourselves on the repayments for 15 years - but that would mean having less disposable income now.

Any words of wisdom? First world 'problem', obviously...

If you’re happy that the backstop position is that you might have to move again when you retire if your income drops without any lump sum, then I don’t think it’s a terrible idea to get the longer mortgage (assuming you’re able to). What is your pension provision looking like?

Due to relationship breakdown and having an interest only mortgage at present due to property previously being rented out I will need a mortgage well into retirement . Watching with interest.

DH has a final salary pension (sort of - it's TPS), and is now on a high wage, so he will get a pretty generous pension provision. We'll need to plan his last few years before retirement quite carefully, as they now do an average salary calculation for part of it. My pension isn't great - various bits and pieces from working different jobs here and there, plus a few years as a SAHP. I'm looking to increase my hours now though, so I should hopwfully be earning more over the next 15 years. I think we're very unlikely to split up (but I know everyone thinks that!). If we bought a bigger house and then split up, we'd presumably sell it.

It depends on the lender. Some now lend up to age 80 if it looks like you have the income.

After all, a pension is guaranteed income unlike salary where you can lose your job, be unable to work due to illness etc.

We moved and took the new part of the mortgage to 20 years - when DH would be 70. But we knew full well we’d be able to pay it off within 10 years or less as had endowments maturing from our separate first home purchases. I would not want to be saddled with much of a mortgage after 60, too much that can go wrong with health. However in your situation you can factor in what would be affordable on your DH’s pension.

Don’t rely on inheritance it isn’t certain, no matter how wealthy your parents are. They could also live to 100+ if you’re lucky, or pass it straight to grandchildren.

We moved at 44 and 47 and borrowed the additional amount as interest only. We then had the option to either down size or clear the mortgage. Our priority was paying into a pension rather than paying down/ or getting a repayment mortgage for the additional amount borrowed.We retired at 52 and 55 and paid off the mortgage with some of the 25% tax free lump sum and still have the option to downsize.