a new 300k mortgage at 40 is it too much

[moomin18]

DH and I have been meaning to move for a little while and have finally got ourselves together. Found a nice place and got a mortgage in principle for 300k. All great so far but now am all panicky. We are both 40 with 2DC 1 and 3. We need a bigger house and house prices in London are high, but it's a lot of cash to take on at our age. Anyone got any advice or happy stories of it all being ok?

Don't delay. It will look a whole lot worse only being able to get a 20 year mortgage in a few years time.

Wth both of you able to work within a couple of years, you'll be fine.

300k is the mortgage amount not the house price - which I'm assuming is substantially higher. it may not be a mansion but it will still be an expensive house which will have a more limited resale market.

Oh gawd my husband is 42 and we’ve just got our first mortgage and it’s 400k - we just have high repayments monthly - which we are used to anyway with London rent so it’s fine

It all depends on yo ur income I suppose

Interest rates are at an all time low so borrowing large amounts seems to be the norm now, I never liked a mortgage hanging over me so paid it off by 41 , so a no from me I wouldn’t want that size mortgage at that age ( but you do earn about 40% more than us )

That would be fine. We’re late 40s and taking out a much bigger one but have low loan:value. We always overpay plus have critical illness and life cover. Can always downsize later and release equity.

My mortgage is bigger than I'd like for our age, but I just keep telling myself that worst case scenario, we will sell and downsize, we made the mistake of being too conservative last time, bought a house that was too small then paid more money to move again, better off having a more expensive house you can sell than being in an inadequate house in my opinion, I feel like we have choices.

@Puppylucky not in London it won’t have a limited resale market. It sounds like it’s probably an average 3 bed house price. Round here, not particularly special part of London it’s £650k for a 3 bed semi needing modernisation. Are you in London? If not it’s hard to get your head round quite how ridiculous house prices are.

We are 41 and 43 and are just about to increase our mortgage to £300k - exactly what we had 10yrs ago pre DC and with us both working.

We earn more than you op but the DC are at private school which means we have a huge outlay each month.

I know what you mean about taking a step backwards! The annoying thing is we are buying a house which our sellers bought the same month we bought our current house - we could have afforded that house at the time if we stretched ourselves to a £450k mortgage..... the benefit of hindsight!

@moomin18

Well, our joint income is around 100k so not high for London. And appreciate that all these figures probably sound mad for anyone outside London.

DH thinks am being silly or maybe am just feeling my age. Guess I never expected to still have such little ones plus a massive mortgage at my age. All my friends have ten-year-olds and are almost mortgage free and just looked horrified when I asked for their advice.

stop comparing your situation to theirs?

@Puppylucky

300k is the mortgage amount not the house price - which I'm assuming is substantially higher. it may not be a mansion but it will still be an expensive house which will have a more limited resale market.

There's a reason London houses are so expensive. It's called demand.

I wouldn’t do it, but we’re aiming to be mortgage free by 50 so we can retire early. I wouldn’t want to be paying a mortgage into retirement.

We’re planning to do something similar at 40 if we have an offer accepted (plot of land to self build on). If we stayed put we would be mortgage free, but we want more space for our 3 kids and have decidedto go all in and hopefully build our dream home.

I think it depends on what your priorities are. I’m happy to take on a 15-20 year mortgage knowing that I love my job and can’t see myself wanting to retire at 55. Also the kids are just 6, 4 and 2 and assuming they want to go into higher education I would want to keep working anyway to fund that. I’d rather invest the money where our family spends most of its time than having more disposable income.

Interest rates are so low at the moment that I feel comfortable with borrowing a larger sum. I think you need to look at your circumstances as a whole. We’ve calculated on the basis of a worst case scenario and could still afford it if one of us lost our job.

Yes. Got a 290k one at 41. Scary. Almost paid off now 15 years later.

Did similar at 50, in fact nearly borrowed a lot more...interest rates are low, it’s improved our life so much.

£600k and we’re older than you. It’ll be fine.

£660K, in our 50s here. First time buyers three years ago with a 95% mortgage, now having to buy with an 85% mortgage due to Covid (was originally supposed to be 90%). We'll be paying well into retirement, but the alternative is to live in a tiny flat with no space for all of us. Well aware we'll probably be in negative equity soon.

It depends on the LTV, if its a 3 bed in London, I guess you probably have over 50% equity?

Even if you change your mind in years to come you can sell and move out or further from London. It sounds quite manageable if you can pay the monthly amount comfortably.

I'm in exactly your position except only one DC and slightly higher joint income. I was mega stressed to begin with but I think I was stressed about the move and committing to a big house and an area and moving out of zone 1 etc etc not just the mortgage. 3 years in all is well, we like the house, we are used to the debt and over pay a little each month.

Is your mortgage cheaper than rent would be? If so surely it's a good move?

I'd say it's fine. A bloke I know in work "started again" at 50 with a younger OH, new family, fresh mortgage, & he seems to be doing ok.

Similar salary to you, 44 and 49, 360K to go

Yes I am in London and I have just sold a 4 bed terrace for c £1ml. Part of why I did it is my age and reluctance to keep servicing a big mortgage But I also think hou are fooling yourselves if you think that your house is a liquid asset that you can quickly get rid of if you need to. Demand is one thing but affordability is another. Even in London there is always a finite number of people who can afford your house and want to live in it.

If you can afford the repayments it’s fine!
You need a bigger house.

In 17 years your youngest may be off to Uni. They still need a place to come back to but you could downsize at that point. Or your income might have gone up.

Who knows. The repayments enable you to live there for as long as it suits. Go for it!