£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!

I am 43 and we have 320k left. Combined income a little more than yours. I'm not thrilled about it but it's the house we wanted, it's affordable right now, and we have a couple of years of savings (less than you) if something happened to one of our jobs, plus I have income protection.

If you've stress tested your income and can afford a period of no salaries coming in (I was made redundant unexpectedly earlier this year, and a small savings pot was a life saver!) then it seems reasonable. The debt will go down, and you'll have spent the intervening years in a home that's suitable for your family's needs.

We're about to move and taking on a similar mortgage size at a similar age, but it's a home I'll be leaving in a box if I can help it, so it feels fine to take the long view.

Our savings are making 5%+ so makes more sense having them as a safety net, but if we apply and do a hard credit check and it comes up less than we wanted to borrow we would consider this. Xx

You're still totally missing the point about affordability and no one can really answer that for you without knowing what your lifestyle is like and the cost of your other outgoings. You need to make a spreadsheet starting with your net monthly income and deduct everything that's an outgoing....mortgage, childcare, council tax, fuel bills, insurance, car repayments & insurance, mobile phones, broadband and TV, subscriptions such as Amazon prime, spotify etc, gym membership, food.......

Age of 41 isn’t an issue. You can have a 25 year mortgage that’s due to be paid before retirement, and with the potential for pay rises to help you chip away and pay off earlier in case you need to retire earlier.

But a 30 year mortgage (to 71) and 5 times pay multiple would make me uncomfortable. If it’s necessary to get a two bedroom house then I’d live with it. If it was to get a 4 bedroom instead of a 3 bedroom (and I didn’t have 4+ children) then I’d go for the smaller house and have a less stressful life.

I think this all sounds eminently sensible and you’ve clearly thought it through. Not sure why everyone keeps saying you won’t get a mortgage when you’ve already got a decision in principle either! Mortgages are a good kind of debt because they are creating an asset for you (and a home, no less important) and you’ll probably be able to start overpaying once your childcare drops and income rises.

I'm 41, we earn 40k more than as a couple and I wouldn't take out a mortgage for 30 years with 1.6k per month. Depends on the lifestyle you want though.

I agree that could be an issue and we have some liquid savings if MIP doesn't translate to an actual full loan. We don't have any car debt though, bought our car outright and it's 5 years old so hopefully won't need replacing anytime soon. (We had our last car for 10 years)

Yes. 3 bed mid terrace in the SE cost more than yours but actual mortgage was less as we saved a big deposit (saved, not inheritance or other help). Pre kids we overpaid the maximum every single year too. We worked hard, saved harder and make sure our money works hard for us too. We aren't high earners by any stretch but we are very savvy at financial planning and future proofing!

We have 2 in nursery fees on 1 full time and 1 part time salary.

Where there's a will there's a way!

Well done then, in that case!

I wouldn't be concerned about age but affordability. That's a massive income multiple. AIPs are pretty meaningless, unfortunately.

FWIW we borrowed more than that in our mid-40s. We love the house but it needs more spending on it than we thought. And now I've hit peri I wouldn't mind taking a bit of a step back at work but can't. We are aiming to get it paid off asap.

We are similar age and doing something similar.

The average age of a first-time buyer in the UK is 34. Many people are just getting on the ladder at 41.

If you have 90k elsewhere then presuming the actual mortgage is 325k minus that so actually a 235k mortgage in real terms ?!

I'd take out as much as I can mortgage as I can get a mortgage at 4.4% and my savings are making 5% and I like the safety net if we either lose jobs or need to dip into savings a little bit until I go full time. But effectively yes I'll be £235k in the red. I forgot we also have £13k in LISAs that we can access at 60.

I'm in London and think a lot of people have circumstances similar to yours but I do think they'll be more downsizing in twenty years than there used to be. Perhaps that's a good thing given the housing crisis.

We probably do have different standards of lifestyle then as you make £1600+ a month more than us right now and we are really quite comfortable. 😅

We had a MIP for about 30% higher than it actually turned out anyone was willing to lend us.

Sure, I don't have any problem downsizing at 60 for the next generation and no longer need to be in this area with its school catchments or with this size property when I have an empty nest. :)

If you're 41 and have a child still at nursery then i don't think you can guarantee having an empty nest at 60!

Fair enough and maybe this thread will all be hypothetical and I'll try again in a couple of years when I'm earning more. :)

I think this is key

Downsizing is absolutely part of our financial planning and why we don't feel uncomfortable with a large mortgage in our 40s.

True and I'll always have a house that has a bedroom for them, but we won't need to be in the primary/secondary school catchment and maybe they'll have a driving licence. :)

I'd probably add a bit more of your savings to the deposit to get it under 300k. We took out a 250k mortgage aged 43. They did offer us 30 years but I didn't feel comfortable with that and we went for 25 years instead. We have had a lot of expenses with doing the house up so not much money left over every month, but we plan to start regular overpayments soon.

I also have a house which I rent out and there's about 90k equity in that, so that's a bit of a safety net. And all the profit from it goes back into paying the rest of that mortgage off

I think attitudes on this differ a lot.

There are a lot of posters - probably in cheaper areas of the country - who intend to maintain the family home until their adult children choose to leave.

My attitude is more like yours. We will downsize when the kids are around 23-26 regardless of their views but we will downsize somewhere with enough space that they can stay if they have an emergency. And hopefully downsizing will leave enough cash for house/flat deposits for them.

We don't feel obliged to house them permanently in their childhood home. I think most folk in London are the same way - it is expensive to have a family home in a good area for schools.