£315k mortgage at 41?

[Propertyshmoperty]

We've accepted an offer on our house for a fair price and a house we really want will not budge on asking price meaning we will need a mortgage of £315k (possibly £325k) to go for it. Combined income of £60k at the moment but I work part time and my only DC goes to nursery part time costing £450 a month until Sept which will reduce to maybe £80 for wrap around.

This would be the final move, house needs a bit of work but mostly cosmetic. I have enough equity for the best mortgage rates too. However this is going to be 15 or 25k above what I thought was my max budget. I also will have saving so can stay afloat for maybe a year if we both lost jobs and lived very frugally.

What are peoples thoughts, is it bananas borrowing so much at our age on our wage. (Although intend to get a job with more hours soon so could potentially earn £80k combined, plus my husband is pushing for a promotion so could get some extra there too) is anyone else in my situation? How are you finding it.

I really don't want to miss this house, its the best I've seen for a long time. (Been on the market over a year 2 chains fallen through at the bottom hopefully 3rd time lucky) I am so tired and stressed and don't know if I'm even thinking straight anymore. 😅

Thankyou!

Are you even able to borrow that much? Lender will do affordability checks.

I always feel you have to look beyond the headline figure and instead look at the monthly payment and whether it's affordable.
You definitely aren't past it at 41!

It sounds like you love the house so I would go for it

I also thought you'd struggle to get a mortgage for that amount on a combined income of £60k whilst still paying nursery fees. Do you have a mortgage in principle?

It sounds as if you know you can afford the repayments and can see how your salary will rise/outgoings will fall over the next few years, and keep hold of some savings too, so I don't think you sound reckless.

But houses always end up costing more than you think they will and it is already over your maximum budget so I would walk away in your shoes.

I think at 41 you need to be focused on paying off your mortgage. Not taking out another one.

You should stick to your origional budget. It's not worth the financial stress. Looking at just can you afford the monthly payment, as another poster suggested, is terrible advice !
Your combined earnings at 60k in your 40's are enough to be comfortable on, but only if you don't have large debts. A mortgage of 325k on those earnings at your age would not be sensible if you have alternatives.

I would just go for it. You clearly love the house. 41 is plenty of time to take out this bigger mortgage. Your outgoings are going to decrease. You have enough savings to keep yourself afloat. You have got a fair price for your house. It’s a forever house which I think is a great achievement at only 41. Think you will be fine.

Forget the total amount, it’s 5 times your combined income which would be too risky for me. Have you used an affordability calculator to work out what percentage of your income your repayments would be? We’ve always used a mortgage advisor and she counselled us against that sort of stretch, even when rates were low

I’m 40 and we’re just about to take on another mortgage of £500k. We will downsize when we don’t have 3 young children at home.

Will you actually qualify for over 5x joint income? The lenders will look at your current situation, not what you hope to be earning even if it's the week, month or year after you take the new mortgage out.

How much would the mortgage be per month? How much do you have coming in each month?
We borrowed 4× our household income and its been fine with plenty left over to live a comfortable life but we are still on a fairly low interest rate.

Actually we borrowed 4.5× our household income which isn't far of what your are proposing. We don't struggle to pay the mortgage.

I am 99% sure you would not get that borrowing on your salary. Not only is it over 5x salary, your childcare costs will only reduce your affordability further.

I would go for it, if the lenders will give you that much. I’m 40, feels young to me!

Eh? At 41 most people I know have primary and pre-school age children, of course they're going to be buying bigger houses. Most of us only bought our first house in the last 10 years 😂

I'm hoping we might be able to afford to buy a bigger house in our late 40s, which will last us through my son's teens and inevitable return after uni.

I'm 40 and we have more than that outstanding which worries me not at all, but our income is a lot higher than yours and we're out of the preschool years. Have you actually got AIP to borrow that much?

I agree with ByUmber. 41 and 39 here with a preschooler and a toddler, definitely don't want to be considering more debt at this point. We're paying off the mortgage (7y left) and planning for our retirement now instead!

We bought our house less than 10y ago just for the 2 of us with room to grow our family for the very reason that we didn't want to be taking on a new huge mortgage when our kids were(are) small, so we can support them better financially when they become more expensive e.g. uni etc without the pressure of a giant mortgage still to pay right about when we are nearing retirement!

I think at 41 you need to be focused on paying off your mortgage. Not taking out another one.

The average age of a first-time buyer in the UK is 34
https://www.finder.com/uk/mortgages/first-time-buyer-statistics#:~:text=buyer%20statistics%3A%20Highlights-,The%20average%20age%20of%20a%20first%2Dtime%20buyer%20in%20the,%2C%20up%208%25%20from%202021.

We were bit younger but bought second house which was bigger property with slightly larger mortgage at OP age . We didn't borrow as much as OP - but in our case lower interest rate meant monthly repayments went down.

My IL and DP who got on early to mid 20s were paying off mid 40s and early 50s - I think it's now much later due to high house prices.

OP I'd look at monthly repayments and see if you can actually borrow that amount but I'd also try and take a step back and have another look round check it is worth the price and there isn't anything better out there.

A combined income of £60k is the same as us so I am not sure how you can borrow £315k? Do you have a mortgage in principle? Your income is £5k a month - you are probably looking at spending almost half of your income on the mortgage depending on length of term and loan to ratio. This isn't going to leave you much to pay the bills, food and clothes. It's not worth the financial stress especially when you have a child or children.

Do you have an AIP for that amount? If not and you haven’t already definitely speak to a mortgage broker.

It sounds a lot to me, although your combined income is similar to mine I guess your net income is higher because you're getting 2 lots of tax free income (mine is nothing like the £5k a month quoted above!). You need to look at your net income and outgoings and then work out if you can afford the mortgage repayments.

Sorry everyone to answer a few questions we do have a MIP no debt whatsover and probably around £90k in stocks, shares, savings and ISAs (sorry if the last was a drip feed) £350k deposit. (We used to earn more and have more disposable income)

hahaha.

It also depends whether OP can overpay to reduce the term significantly. If not that means both have to stay in full time employment until 66, which I would say is a big risk - a health problem (can't work) or redundancy (can't get another job due to old age) could cause a mortgage default.

Given your massive deposit, I’d be less worried about leveraging yourself to this extent than with less equity.

What’s the monthly repayment?

IMO it generally makes sense to buy the best house you can afford.

And 40 is no age for having this much mortgage debt - mines more than double that and I’m not remotely concerned.

What are the monthly repayments and have you checked what they would be if interest rates rise?

I don't think your age is necessarily the restricting factor here or even the nursery costs as they should reduce. Is that £60k net or gross income? If gross £325k is over 5 x income so that is a high multiple. I would also say that most people go into new houses not intending to do much work but that usually changes once they are in and living in it.