taking on a 400k mortgage age 42

[gf4567hfdd]

We are considering moving into a larger family home from a flat which would increase our mortgage from 250k to 400k, sadly house prices in London are so high. A we're both 42, this would extend out mortgage until our mid 60s. I read on here how people hope to be mortgage free by 50 or 60, so would this be foolish of us?

Reading about so many people taking on large mortgages in their forties, which they will be paying until their sixties and beyond, are you surprised that prices are so high? Prices will adjust to the amount of money being created and lent, which is now chasing assets. You might attempt to rationalise that with ‘I can always downsize’ etc., but you can’t bank on prices being high when you sell.Taking on a big debt, even secured on an asset, is a big risk

People have to take on big mortgages because of decades of QE which increased asset prices & devalued wages. Plus FTB are much older now due to the expense of housing. And for the vast majority it's cheaper servicing a mortgage then it is rent.

I do agree that relying on downsizing to fund retirement isn't prudent as we are likely in for stagnation in the housing market. However the OP is not borrowing close to the max & can easily overlay.

overpay

We moved to this house when I was 50 and it added another £100k to our mortgage. We've been overpaying so that it's gone by 60 but sometimes the investment pays off.

The only people we know who paid off a single mortgage, didn’t have children. Those with families often moved house for teen years to get more space. Most people cannot buy family houses when they first buy unless. it’s a cheap area. In high price areas, getting a mortgage at 42 for a bigger house is very very normal.

If you can afford the repayments, yes do it!

The purpose of a mortgage is a home for your family. A bigger home would benefit you now.

You aren’t forced to carry on paying a mortgage until you retire: you could downsize as soon as the kids leave home.

Also, what age will you be when you potentially are free of Uni costs etc? You have a lot more money once you are not supporting offspring, and can maybe start to overpay.

Plus your income might have risen.

Or you can downsize, cash-in the extra equity, pay off the mortgage when the kids leave.

We did it 17 years ago to move into a bigger house in an excellent school catchment. £400k mortgage on £550k house. Paid off 2 years ago when I was 64 and husband 60. House recently valued at £900k. Not a bad investment and the kids loved growing up with a lot of outside space to roam in and a big house to have friends stay over.
South east, rural, in striking distance of crossrail.

I remortgaged at 47 until I'm 69 so I could buy ex out. In reality I would hope to retire around 63 and use pension lump sum to repay the remainder.

I wouldn’t personally, however my circumstances are different to yours. Just be aware that interests rates are going to continue to rise, how affordable is the mortgage for you? We always overpaid our mortgage so we were clear of. It by our early 30’s.

We always overpaid our mortgage so we were clear of. It by our early 30’s.

The average age of a FTB is early 30s, how old are you now?

I think if you can afford it and it will give you the extra space that you need then go for it. Especially if you'll have a better quality of life. People have mortgage terms way into their 60's and even into their 70's now.

A mortgage is a longer term investment- house prices will go up and you may even sell it before the term is up once your kids move out and you potentially downsize.

I think the days of people being mortgage free earlier are few and far between.

Do you need a mortgage broker for mortgages that finish beyond retirement age say finishes age 70?

Or depends on all circumstances such as if home is high value, High LTV, high multiples, challenging credit history.....?

Eg If say 800k London house ,90pc LTV, 45year old couple, 4.5 multiple, excellent credit history....

I did use a bronzer for mine but I think mortgages up until 70 are relatively common now - mine is with tsb and another friend got one up until that age with another bank at the same time.

@Indigoo03 I think only specialist lenders will go past retirement age. Plus there are fewer deals for borrowing 4.5 x income but you could likely go to 5 x. The main issue will be interest rate at that LTV, eg someone with 60% loan value will still get close to 2.5% whereas 90% will be higher.

Tbh though sometimes I think it's better to stretch yourself. We didn't as I didn't want to impact savings but if we move again in 5 yrs it will be another whack of stamp duty.

We applied direct with Nationwide, no broker, they didn't bat an eyelid when we asked for a 35 year mortgage (taking us both past our 70th birthdays)

‘Money being created and lent’ is exactly what QE is. Prices are high because people are borrowing more created money, over a longer term. So I don’t think we disagree on that.

However, nobody ‘has’ to take on a big second mortgage in their forties, and if everybody collectively took a stand and said, you know what, I don’t want to still be paying a mortgage when I’m 66, then prices would have to come down, wouldn’t they? But that won’t happen. Here is why.

The first person to get a mortgage for 5 x LTV probably thought that they were being clever and getting ahead of the market, ‘stretching themselves’ etc., but as soon as others get access to the same thing, which they quickly do, prices go up to match the amount of money chasing houses. The other people who have borrowed 5 x LTV are dismayed because they think that they should be able to afford more than an average house. But they can’t, for obvious reasons.

Ditto long mortgage terms (which is really what we’re talking about here). The first person to get a 30 year or 35 year mortgage (or, god help us, 40 years) probably thought, great, I’ve got more money to spend now and I can get a bigger house. Which will have been true for the first few people but not as soon as those mortgages became more widely available: prices immediately adjusted. Which is why long mortgage terms and bigger loans are bad for everyone.

I’ve used this analogy before, but if the average buyer were allowed to borrow £1m, what do you think the average house would cost?

Why do you think that was? It couldn’t be because they were looking forward to 35 years of collecting interest payments from you, could it?

Completely normal time to increase the mortgage that’s when most people do it. Everyone we know did the big final move in their early to mid 40’s and it’s not a particularly big mortgage. Just fix it for as long as you can!

We are in the process of buying our first home. Age 38 and 40!!! People can't get on the ladder in their 20s these days!

Whoever said you should be thinking of paying off your mortgage at 42 had no idea of real life!

We got our 1st mortgage in our mid 40s and could not have done it earlier. It took over 5 years to save a £10,000 deposit and it will be paid off when I am 67

But we are in a flat - albeit in an extremely expensive part of the country - and wouldn't consider upping the mortgage. But we are very average earners.

Same here. I'll be 37 this year, DH 43. We've managed to save £10k in 5 years, hoping to get a mortgage before I'm 40 (aiming for another £10k by then for deposit) which will take me to retirement age. That's if house prices don't keep rising, when we started saving £250k would have bought our house we're renting, now it would probably be over £300k... The goalposts keep moving!