To take out a bigger mortgage in our 50s

[housesandrooms]

i am not sure if I am making a right decision for us all. I am early 50s and DH is late 50s and with some extreme savings we finally paid off our mortgage this month. The house is two up two down but in a very desirable area with schools and park etc.We both don’t like the house we live in and wish we had a bigger kitchen and an extra living room. We would love to move but DH thinks it would be too much for us. Our current house peak price would be 650k and I think next year it would be around 600k with newish kitchen, wooden floors etc. There is no room to extend the kitchen. If we buy a house for 900k it would get us three beds with either extra living space or a bigger kitchen and if we go for 1000k we can get both. We could afford 3500/month and pay off the rest with our retirement lump sum.
It’s such a big decision and I am not sure if I am going for the right option. If we stay here we won’t be happy and if we move it will be 12 to 15years mortgage again.
we will be saving 4k a month in mortgage payment from next month and haven’t had any holidays in last 5 years.

I see your dilemma, DH and I are similar ages and live in a 2 up 2 down having downsized from the family place a few years ago and we did have to carefully consider whether it would be enough space balanced with mortgage size. We decided in the end we'd rather than the nicer lifestyle and bit of financial freedom to reduce working commitments or not pursue the next promotion at work or whatever over bigger living space but obviously it's a personal choice. I know a lot can change but I don't feel like I'll be wanting to retire any time soon, most of our colleagues go on working well into their 60s and beyond so that wouldn't put me off, it's more will you be able to enjoy holidays and so on if you go for the extra mortgage or will it be an endless grind and financial worry through the next few years which are probably going to be tough economically?

We did spend about £50k extending and renovating our little cottage though, it's still a really small house and we only had room for a small rear extension and now only have a very small patio garden but it has made a bigger proportionate difference in terms of usability than the actual square footage added if you see what I mean, just opening things up a bit and having a nice modern kitchen does make a big difference - if it's mainly the downstairs/living space as opposed to bedrooms that is the issue for you have really explored all the possibilities of making it as nice as possible? For instance we've turned the second bedroom into a study and hobby room, I was reluctant at first as I did want to have space to put the (adult) DC or visiting friends up for a night but it's been 100% the right thing to do, it means the space is actually now used on a daily basis as opposed to the few times a year we actually have people to stay, clever furnishings have made it a really comfortable and useful space and we've bought a luxury sofa bed for downstairs that the DC don't mind sleeping on for the odd night, any longer term or older visitors we put up in a nearby B&B or holiday let, yes this costs us a bit but way less than the increased mortgage on a 3 bed would have. For me it's the right thing and we'll stay here forever hopefully now.

Or the other option to consider is can you move area, obviously don't know your job and family situation but with remote working so much more a thing now could you consider a slightly longer commute or further out area to get more for your money, hopefully it would only be for a short time until retirement anyway! I wouldn't recommend going anywhere really rural or with bad transport links and amenities as you do have to consider your later years, we actually went a bit more urban than we'd been before to buy the downsize house, a 'rougher' area on paper but actually it's perfectly safe and has everything we need for shops, transport, leisure stuff etc. now and hopefully will be well positioned for health needs and so on when we get a bit older. Something to think about anyway!

Good luck!

Personally I wouldn’t take on a larger mortgage at your age unless you plan to work a lot longer. Having the freedom of being mortgage free would be worth more to me than the bigger kitchen and extra sitting room.

What are your plans for retirement? Do you/DH want to stop work soon? If you are both the kind of people who would hate not to be working and plan to keep going for the next 10+ years then maybe a larger mortgage would work for you but personally I’d rather have the freedom to retire while you still have your health, travel and/or do what you want to do.

I would also say that if you are in a two up two down then you may have to move to a more accessible property or make changes to your house once you hit old age. If there’s a possibility you’ll need to move for that then I wouldn’t move now (or would make this move more to do with suitability for retirement rather than upsizing) as I wouldn’t want to pay two sets of stamp duty.

Have you considered moving to a cheaper area to get the extra space you want?

I'd move somewhere cheaper!
You could get a massive 5 bedroom house for £600k in a cheaper area.
Or a very nice 3 bed one for £300K and a lot of money in the bank.

we we’re pretty much exactly in your position and just before pandemic we moved. We had a nice terrace but wanted a proper garden, off road parking and a semi or detached.

going from mortgage free to a mortgage again was a big decision. But honestly so glad we did it. We didn’t completely stretch ourselves as I want drop hours when I’m 56 ish and retire (or do something else) at 60. We did the numbers and decided we’d rather put money in living in a house that suited us better than saving it or buying a second home. We both still have savings and either of us could afford mortgage on own.

we went for semi rather than detached so didn’t completely stretch ourselves.

the difference in quality of life from more space, the parking, the garden….it’s great.

Your DH will soon be 60. Does he plan to retire from f/t work then? Personally having been mortgage free for quite some time there is no way I would sadly myself with a mortgage now, especially with increasing rates. If you are dead set on more living space and garden the best option would be to move to a cheaper area, maybe?

Saddle not sadly lol!

Can you move somewhere a bit cheaper? Even within your area. If there is a premium attached to your house for it being near good schools them there must be larger homes in less family-friendly areas. Where I live in South West London, a move 5 minutes drive away would get me a lot more house for a lot less money.

Also could you manage the mortgage repayments on one salary if necessary OP and do you have critical illness cover?

Thanks everyone for replies. DD is 12 at secondary school. We could change our jobs (NHS) but have made friends locally and got a lot of help from them during COViD with DD. Everyone looks after each other so we would like to stay locally. DH would love to retire at 65 and I will continue. We have some savings in stocks and share and some for urgent repairs but won’t be able to afford mortgage on single salary. Hence why we want to use lump sum from his retirement funds. DD is happy with UK/ Europe short breaks and wants her friends to stay for sleep over!

You have to remember that mumsnet tends to be very keen on paying off the mortgage. And while it was nice when we were mortgage free, I have no regrets in taking one on at 52.

I would 100% do it if you can afford it. But don't stretch yourself too far.

I think it depends on your income and assets. In about six years your husband plans to retire and potentially your daughter may need to be financially supported through university. Could you keep all this going on your income and have enough rainy day money for unemployment, disability and health problems?

We became mortgage free 2 years ago and I'm really regretting not upsizing back then. I'm still looking but the same upsize we could afford in 2019/2020 is out of reach now with bloated prices and interest rates.

We still desperately want to move because of crappy neighbours but don't know whether to move now or see if a house price correction brings house prices back to pre pandemic levels in the next couple of years.

They say you shouldn't time the market, so I don't know whats for the best really.

We are 48 and 54 and about to increase our mortgage but we currently have an interest free mortgage that would need to be cleared in 3 years when the term ends so we’ve decided to sell our house and use the equity as a large deposit for a house that better suits our needs - bigger bedrooms and extra bathrooms for us and our teenagers. This will be a repayment mortgage. By selling our current home we are also able to pay off all our other debts.

i know that wouldn’t be what a lot of people our age would do but it’s the right thing for us