£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 say go for it. You are at the most expensive time of your lives with childcare costs but they are soon reducing and it will take about 3 months just to buy this house (say August) with childcare costs reducing in September. You have a massive deposit plus a big chunk of extra savings plus the potential to earn significantly more in the future. You're taking a small risk but it's a safe risk, if you know what I mean. Though personally I would put more of your savings into the house, making your mortgage payments lower.

We always stretched ourselves with house purchases and are glad we did. Things always seem tight at first and then get easier as childcare costs lessen, salaries increase plus inflation making the mortgage repayments feel easier. You are still young in your forties, plenty of time to make this house perfect and enjoy it for years to come.

Why not buy a house outright in cash, with your ‘deposit’ money and savings? Then no mortgage and anything you earn you can invest / spend on whatever you like.

I don't think it's quite as clearcut as the savings account paying 0.6% more in interest than the mortgage would be costing you in interest.

For one thing, the savings rate could go down, and probably will once the Bank of England starts reducing the base rate which it is likely to start doing from the summer. So unless your savings rate is also fixed for 5 years, I would work on the assumption that the current rate will not stay that high for long.

Also, your mortgage debt will be repaid over many years so over the long term you will probably end up paying extra interest if the mortgage debt is bigger than it needs to be.

If savings rates drop significantly I then have the option to overpay 10% a year to bring the mortgage down a bit. It gives me a touch more flexibility to keep alot of my savings liquid for now whilst my income is lower.

It sounds as if your savings are a bit of a security blanket for you. It's good that you have the option to overpay by 10% a year as you may well feel able to once childcare costs reduce and then your mortgage will become less scary.

There are 2 of you so that's a mortgage of £160k each - that's how I'd look at it anyway!

Go for it. Your nursery fees will disappear in a couple of years. 41 is no age. You've got 25 years left of work. You'll be fine. Enjoy the house.

You state that most banks will see you as a good risk.
That's not the case at all. You're asking for an income multiple of more than 5 times your joint income. This means that there will be a very small pool of lenders that will be willing to stretch that high.
I wouldn't be comfortable with borrowing that much, not due to your age but your income.
You need to consider how easy it would be to remortgage to a new lender once the fix is up. With a 30 year term your capital balance won't have gone down that much in 5 years bur appreciate your income will likely have gone up by then. If you can get into a position where your mortgage balance is more like 4.5 times income, remortgaging will be far easier.
Only you know what is comfortable and what debt level you are happy with.
I would likely double check that the affordability is likely to be accepted before making an offer

Forget the total amount, it’s 5 times your combined income which would be too risky for me.

^

This

£1600 seems a lot on those salaries but we all live different lifestyles. We have a combined household income of £100k, no childcare costs and will soon be paying £2000 a month which feels daunting given council tax and the cost of other bills.

But you know your own finances and what you have available each month to pay out.

If you can afford it and it's the house of your dreams or meets all your requirements, go for it!

I wouldn’t ….my mortgage was done at 48….meaning I could retire and return on 2 days a week at 57 ….go on great hols and will retire completly at 60 ….as we’ve saved loads over the past 11 years since mortgage paid off…..save for your retirement and retire early OP…..and have some nice holidays……you already have a home

To me, it would matter more what the monthly payments are and how much equity they have in the house. More equity means more options if things go tits up.

Chances are they won’t drop for a while

I think rough rule of thumb is 4.5-5 times your total annual income so £315k would be pushing it for lenders. What's your loan to value?

I am almost 40, last year took out mtg of £460k with a joint income of £104k. LTV quite healthy at 55% lending. Manageable on our income.

Fast forward to now and DH was made redundant 5mo ago and I'm pretty stressed. Yes we have savings but they don't last long with massive mtg repayments. And I don't want to be eating into them, I want them there for other things like making the house nicer or even healthcare if any of us get grievously poorly.

Depends on your attitude to risk - just wanted to share my story.

With £90k in savings then if something goes wrong you will still be able to cover all your bills for a good 2-3 years I would have thought so that would give you time to breathe. (And that assumes you both lose your jobs / get ill simultaneously.)

It sounds scary - especially on the salaries that you have - but you are obviously good at saving and frugal so if you love the house then I would go for it.

But the OP has 350k deposit to put down. Seven times of what your daughter has. They have 90k in savings. Their biggest expenditure is childcare which is slashed in September. Whilst their joint income is low, they sound a pretty safe bet based on everything else.

Go for it OP, I was always advised to make the biggest jumps when buying properties and to stretch yourselves. That advise has paid off massively.

In theory it wouldn't put me off, but I personally would not want a mortgage that size with with a joint income of 60k.

So completely different financial circumstances to the OP...

I'm sorry to say but I think this is a big stretch. We have more income and I wouldn't want a mortgage this big. We are cautious with money though but still!

Go for it.

No idea what being 41 has to do with anything. Must be part of the whole MN idea that post 35 you should basically be packing for the grave, don’t start any long novels etc.

🤣 I only got on the housing ladder in my 30's! Would have given me less than 8 years to pay it off....not likely I'm afraid in the real world.

Some people don’t actually want to retire early! I love my career, worked hard for it, don’t have any plans to end it earlier than I have to. And it enables me to have nice holidays now!

Combined 60k, so what, 4k take home?

Then over 2k gone in mortgage and nursery fees?

Feels very very tight.

Depends if you enjoy frugal living and have extremely secure jobs.

Exactly, not everybody wants the same thing. Some of the advice on this thread is very one size fits all.

In our case, we chose to prioritise the house and as a result we can’t afford to go on exotic holidays like some of our friends. But I honestly couldn’t care less because I’d rather have a nicer house than nicer holidays 🤷‍♀️

We are all different.

You're drip feeding OP. You should have listed your savings/stocks and bonuses at the beginning.

It was literally in my second reply and I said sorry to drip feed (even though I did actually mention I had over a years savings in my first post), would you like a personal apology? 😅