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Original poster

If you are in your 50s and 60s- mortgage question

53 replies

CookieDoughKid · 09/10/2017 19:07

Are you any closer to paying off your mortgage. If not, what's your plan?

We live in Didcot which is fine. It's got a lot of redevelopment happening and we have a nice family new build on an estate. We will pay it off in our mid 50s if we don't move to a more expensive house or expensive location. The house we are in is fine and convenient but it's not my dream house. If we do decide to move we will have to be working till our 70s or downsize later. If we stay we can comfortably afford our house on a single salary. Not sure what to do hence reaching out to more experienced folk here!

OP posts:

JoJoSM2 · 09/10/2017 19:17

I’m not sure a bank will lend you money on the premise of working into your 70’s. Out of the people I know that age, no one works and I honestly can’t imagine that they could handle full time employment. Even if they’re fit, they just haven’t got that level of energy.

Isn’t there a middle ground? Like your dream home but on a smaller scale that’s affordable?

You also need to consider your pension. If you’ve got excellent pensions, then you might be in the position to use the tax free lump sum to clear the mortgage and still have a good income in retirement.

BackforGood · 09/10/2017 19:18

Not sure what you are asking really.
We've paid off our mortgage... er.... because I started paying it before many MNers were even born

You (as a family) make choices about all sorts of things over 25 years (or however long you take your mortgage out over). You choose if and when the SAHP goes back to work. You (both) choose if you want to go for promotions / get more qualifications / work longer hours / etc. What seems like an absolute lifetime of payments when you take on your mortgage, does pass. Then of course you are in a different position in what you are having to pay out now.

We are in a far different position financially from where we were at the start of the mortgage, and then when our dc were little. I suspect a lot of people are / will be.

Original poster

CookieDoughKid · 09/10/2017 19:36

That's the thing. What used to feel like a lifetime of mortgage actually isn't any longer. We are in our 40s and the prospect of having to work past mid 50s doesn't appeal in our stressful jobs commuting to London . We are fortunate to have pensions so we will be ok. I know this is a 1st world problem but it's suddenly dawned on me that we haven't got a lifetime anymore and if we don't buy our dream house we never will!

OP posts:

BackforGood · 09/10/2017 19:55

Then you balance the fact you could live in that home for another 40 years - do you want it to be the bigger one, or is it not worth as much to you as finishing work a few years earlier or working PT or whatever?
If you can reasonably afford the 'next' house, then you will have a bigger asset to sell when the time comes to downsize, of course.
Depends a bit on the age / stage of your dc too..... are they little and you will have them with you for another 15 years, or are you likely to be empty nesters in 5 yrs. etc. Obvs I don't need to know, but they are all things to take into consideration.

Flamingale · 09/10/2017 20:02

Just as BackforGood says really.

It was just me and DS and as I'm risk averse I bought a small, cheap house. Big enough for our needs and affordable even if interest rates had gone as high as levels back in eighties (which of course they didn't).

I've now paid off the mortgage so my small house is all mine. So if I want to retire now that I'm in my late fifties, I can seriously consider it.

I'll have a small public sector pension and can do a less stressful part time job until I qualify for the state pension at 66 (or until the goal posts are moved again).

It would have been lovely to have that dream house, but sometimes peace of mind and settling is not such a bad idea.

I think the mindset is different for the younger generations.

A culture of indebtedness is the norm now. You go to university and finish with a large student debt. Then you get a brand new or nearly new car on finance when before it would be an old run around. Then you have to go abroad at least once a year, so it goes on the credit card. You also must have all the latest gadgets. Then the first house or second house must be the forever home sooner rather than waiting 10 to 20 years to get there.

So it all depends on your priorities now and in the future.

Mine was always to have the minimum amount of debt possible and to pay it off as quickly as I could, rather than having the perfect home and/or lifestyle. I know from reading a lot of posts on here that some people do the opposite and some are able to balance things.

So at the end of the day you make your choice for yourself that suits your circumstances and character/mindset.

Sorry for the rambling reply, but I came over all philosophical. Must be my age!

NotMyMonkees · 09/10/2017 20:09

We moved into our house not thinking it was going to be our forever home or dream house. However, since having children we've realised that it's time, not number of spare rooms, that matters, so we're cutting our cloth accordingly. What is it about your dream home that would change your life, other than having to work for 20+ more years?

xandersmom2 · 09/10/2017 20:15

We're in our mid- and late-40's and are just about to buy our first home here in the UK (I've owned my own properties here many years ago and we've owned properties elsewhere in the world in the interim).

We're going through a broker who said that most lenders (meaning, I assume, the lenders he works with) either won't consider a mortgage that extends past someone's 70th birthday, OR wants to see evidence of pension provision past the 70th birthday.

To make it easier, we have just taken out a mortgage with a shorter term so it will be repaid well before either of us is 70.

newtlover · 09/10/2017 20:20

what Flamingale says-
we bought our first house, opting for the shortest mortgage we thought we could manage and rented out a room in it for several years (including after DC were born) to help pay for that- when we needed a larger house we deliberately chose to time the 2nd mortage to finish alongside the first even though it was hard to manage (no foreign holidays, old cars, few new clothes etc)- with the result that we are now mortage free.

PickAChew · 09/10/2017 20:43

Yep, the mortgage we've just been offered, in our late 40s, has a term running until I hit 70.

My dad's just hit 70 and isn't in the best of shape. We're buying the house to suit us now with teens at home and in 20 years, when I'm likely to be just as knackered as my dad. We could borrow more than we are but would rather be able to overpay, even if interest rates rise drastically (we're also fixing for 10 years!)

I suppose it depends what you're dreaming of for your "dream" house, though.

TeamRick · 09/10/2017 21:54

Could you afford to buy a bigger house & take the new mortgage over a shorter term, say 15 years instead of 25?

JoJoSM2 · 09/10/2017 22:01

Well, with a good pension, you could just get the dream house and once you get your lump sum, pay off the balance of the mortgage. That would still enable you to retire at a ‘normal’ age.

Kewcumber · 09/10/2017 22:04

I paid my mortgage off when I downsized about 5 years ago when I was 47.

This is absolutely NOT my dream house. Frankly I'm past hankering after a dream house unless I win the lottery, paying off my mortgage has allowed me to work less to spend more time with DS and my mum who is ill - owrth more than any dream house.

falange · 09/10/2017 22:07

I had to get a new mortgage a couple of years ago but could only get it until I get my state pension which is when I’ll retire. They wouldn’t give me any longer which makes my payments higher but is sensible.

PickAChew · 09/10/2017 22:08

We've been mortgage free for several years, Kewcumber but have definitely outgrown this house and desperately need to relocate, anyhow. Starting again with mortgage is a little daunting.

IDidContact · 09/10/2017 22:29

Flamingale love your post. Im mid 40s and most of the people I know do exactly the same as you describe. We’re in a much smaller house but mortgage free so whilst they are worrying about interest rate rises we are enjoying an easy life and looking forward to early retirement

IfYouGoDownToTheWoodsToday · 09/10/2017 22:42

Were both 51 and have a similar dilemma, as we will have paid off the mortgage ina coupled of years.
We don't have a big a pension as we would like, so do we start paying into a scheme then or do we take on another mortgage and keep paying it off then at 68, sell it, downsize and use the money for a pension? It's all dh and I talk about at the moment .

BarchesterFlowers · 09/10/2017 22:49

Banks will loan until 70 based on my very recent (last week) experience!

DH already has a guaranteed pension for the rest of his life, early 50s. Stupidly banks will only give him a mortgage until he is 70 even based on his decent pension.

He has an income in addition to his pension with a second pension, he will work until retirement age.

I have an income with a pension, plan on working until retirement age.

If we mortgage jointly we can get a mortgage until the age of 70, if I mortgage on my own I can do the same.

BananaSandwichesEveryDay · 09/10/2017 22:52

Ours is paid off as do was made redundant and we used his payout to clear the mortgage. Due to his age, he is unlikely to get another full time job in his sector, so it made sense. He is fortunate in that he can get his work pension, despite being several years off state retirement age. I am still working as my public sector pension won't payout until I'm state retirement age.
Although our house is a big standard terrace, because of our location it's increased in value so that we could downsize and have a nest egg for the future if we choose. The security of knowing our house is indeed ours, is priceless.

blue25 · 09/10/2017 22:52

We discuss this a lot at the moment. We have a lovely, but modest sized house. We'd like a bigger, dream house, but I'm not sure I'm prepared to work 10/15 more years for it. If we stay where we are, the mortgage will be paid off in a few years and early retirement and lots of travel will be possible. It's a big decision to make.

JoJoSM2 · 09/10/2017 23:09

@IfYouGoDownToTheWoodsToday

For vast majority of people paying into the pension makes a lot more sense. You pay out of your gross salary so all your tax money goes into the pot. In addition, it works for you so your investment increases over time.

If you decide to increase the mortgage, you’ll be out of pocket:

Mortgage gets paid out of net income so the tax money is lost
You have to pay interest on the mortgage, so say you get 100k-worth of extra house but you end up paying 150k with all the interest...

The only situation where another mortgage would make more sense is if you’re on 10k a year, mortgage interest rates remain at rock bottom and the house you buy turns out a gold mine and goes up in value by a looot.

Landed · 09/10/2017 23:21

Turned 50 last year. Mortgage paid off this summer. We bought what we could without stretching ourselves too much and put extra in it whenever we could. No expensive holidays always cheap trips. Children will probably be here for years to come but we all seem to take up less space now they're older! It's a comfortable home which has adapted to our needs as they have changed. Not my dream home but the home I dream in at night knowing it's all ours come what may.

JT05 · 10/10/2017 08:04

years ago we moved to a perfectly serviceable 4bed det. House. Mortgages were 15% so we decided not to really stretch ourselves for the dream house! We settled in decorated, improved, the DCs grew up and family life moved on.
Then hey presto! Through overpaying the mortgage, rates had gone down, our salaries had gone up and we were suddenly mortgage free at 50. It certainly was a great feeling.
Large dream houses bring large on costs, Council Tax, heating, electricity and maintenance bills.
We’ve just downsized to a cottage similar to the one we started in, before DCs and couldn’t be happier!

PurpleWithRed · 10/10/2017 08:12

You can't have it all - if you want a more expensive home than you currently have you'r going to have to compromise on something. And are you sure your pensions are going to be good enough for you to retire at 55, given you're likely to live to 90 with c. 5 very expensive years towards the end of that for at least one of you to need some kind of care?

BarchesterFlowers · 10/10/2017 08:24

We are downsizing at 50 JT05, from a rural detached four bed with four receptions to a three bed semi in the nicest road in our local town.

I am so happy. DH is struggling to come to terms with it, he keeps saying the house is going to be full and I keep responding with, no it is not because we will be getting rid of a lot of stuff we don't need so we will fit just fine!

AnnabelleLecter · 10/10/2017 08:36

49 and 51 here. We have a large 4 bed and still have a mortgage which we're overpaying but DH is retiring at 55.
We're looking at downsizing to small 3 bed which would clear mortgage. Still space for DC- only DD at home now and she's always out!
We have a decent budget so we will gut it and decorate it and it will be in a lovely area so still a dream home to us. Dream homes don't have to be huge.

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