£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!

Truthfully, no I wouldn’t. A mortgage of over 300k on 60k income per year is too high.

So you bought your house less than 10 years ago, you have 7 years left, and you also have small children now so presumably reduced disposable income due to either nursery fees or reduced working?

I have to ask, how much was your house? Because we bought a small 3 bed in 2016 for 300k. You would need a very high salary to pay that off in approx. 15 years.

Mortgage payments are looking around the £1600 mark for a 30 year mortgage 5 years fixed 3.4%. We smashed through our last mortgage in less than 10 years by overpaying a thousand a month but the mortgage was half this and we were "dinkies".

If we weren't finished paying by retirement and we didn't have any inheritance we'd probably downsize to clear it, but get to enjoy living in a great house for the next 20 years.

The house we are in is okay especially for a couple however the cost of building (to get what we really want) means extending would add less value than the cost to do it so may aswell move. I also dislike my neighbour although he's not being as much of an arse this year as he was the previous 2 but he could return to form and that gives me anxiety.

We both have earning potential and we could probably get ourselves up to 100k combined which would more than cover the mortgage payment and additional costs of council tax and energy but thats counting our chickens.

Wish we'd moved earlier but PND meant we weren't in that headspace.

I guess if you take our savings into account we would only really be £225k in the red.

Thanks for everyones thoughts though I'm going to keep rereading through your replies. Xx

Have you actually done a mortgage calculator to see if you’re able to borrow that amount on your incomes? I think your childcare costs might mean that you wouldn’t get the mortgage you needed.

It’s not your age (I’ve just taken out a big mortgage at 45, with a 25 year term - obviously I plan to overpay). It’s affordability.

I had great difficulty getting more than 4.5x my income, and we were 70% LTV and I have excellent credit scores, no childcare fees. The repayments are actually fine (30% of household income, and my salary will increase over the next 10 years).

Do it. We took on a similar at your age and don't regret it, 20 years on.

Where have you found a 3.4% fix?? That is super cheap.

Sorry 4.4%!

Sorry OP, a £315k mortgage on £60k income sounds insane to me!

I’d base the decision on what you are comfortable paying with your current financial circumstances, not what you hope your financial circumstances will be in the future.

A quick mortgage calculator suggests you’d be able to borrow about £255k on a combined income of £60k with £450 childcare costs.

We did similar. At 46 and 51 the mortgage (well 2 mortgages) is £360k (50% LTV). Income around £80k.

I’m not fussed on paying it off early, we have 24 years left.

I'm a bit shocked about the income multiple and the term of the AIP (age 41 + 30 years = age 71 to pay off). It seems impossible. What lender and how did you get the AIP, was it via a specialist broker or something?

meaning we will need a mortgage of £315k (possibly £325k) to go for it. Combined income of £60k

I don’t think you can get a mortgage that high. I thought limit was 4.5x your annual income, which would mean biggest mortgage you can get is £270k

I can't believe people are incredulously hitting mortgage calculators. We have a MIP, it's okay, that bit's sorted. I may have not given our exact wage including bonuses just our base salaries.

I'm also mostly asking people who have similar experiences and how they've managed. We have lots of equity and lots of savings and a perfect credit score so I suspect most banks see us a fairly safe bet. 😅

I wasn’t doing it ‘incredulously’, I was just interested as I used to work in mortgages, and we’ve also recently applied for one, so I was wondering if criteria has changed hugely in the past few years 🤷🏻‍♀️.

41 is no age at all! I took out a £260k mortgage at 52! If you can afford the repayments comfortably then go for it.

Well with lots of equity, lots of savings and bonuses on top of the salaries given in the OP that are a safe enough bet to count towards your mortgage, I’m sure you’ll be absolutely fine!

We did something similar. No regrets about moving. We have been making overpayments though from savings as would be more comfortable with a 250k mortgage by the time we next renewed.

Would you consider transferring some of your savings into the house equity and taking out say £285000 mortgage instead?

Far too high. We are slightly older than you with a similar income, and our mortgage debt is half yours (and still on low interest rate taken out in 2021). I'm already worrying about how we'll cope when our fixed rate expires in 2 years' time.

Weird, my DD earns £50k on her own ( plus £250 CM) and will have a £50k deposit, the absolute max she can borrow is £180k. No debts other than £300 monthly car finance.

Depends on the LTV, I’ve always been able to borrow a higher multiple when the LTV has been under 60%

At a combined income of £60k - you won’t get a mortgage of £325k I’m afraid.

I’d estimate your maximum lending on £60k would be £270k (lenders are really stress testing loans).

At average current interest rates of 5.99% - your interest payments alone on lending of £325k would be £1,622. Repayment would be £2,092 (based on 25 years).

I think this is a huge stretch for you.

When we borrowed 4.5 x our salary we were similar in that we had savings and a large deposit and LTV. I would absolutely go for it. Though I would consider using 50k of your saving to reduce to mortgage and therefore interest you pay over the term.

You can always downsize though. We have 400k left on our mortgage (late 30s) but we will probably sell up and move somewhere smaller and cheaper at some point. We have a large house in an area where you pay a premium for good schools, and we won’t need either of those in 10/20 years time.

Mip doesn't mean you'll actually get approved unfortunately, happens too often (worked in this area). I'd consider your budget rather than multiples, lack of debt helps (the person who mentioned "only" £300 car payment for instance hasn't realised that has a huge impact) and don't count on lower nursery fees so be on the safe side. Can you live on that?