23 year mortgage in 50s.

yvonne_alan_joshua

We have recently moved with work and ended up in the same situation, we needed to take a mortgage until my husband is seventy (He's five years old than me) so we could afford the repayments and get the house we wanted, but as long as you have a plan to clear before retirement I cant see the problem. Luckily for us we had endownment just mature so I have cleared three years already plus were planning on overpaying again each year when we get our xmas bonus and increase our monthly repayment when our son finished uni

kingstreet

donmel123 wrote: »

Im not saying that I will decide not to work, Im looking at worst case scenario if I am not able to work.

So was I.

You are saying you can afford the payments at the outset with a term which runs past retirement, or with a term which ends on or before retirement?

The issues/questions are different in each case.

donmel123

Thanks Yvonne and amateur, Thats what I have been stressing about mainly, the fact It'd be over so long. I would definitely overpay to reduce the term. I have 9.5 years left on current and to match that term I would need to more than double the payments so thats a def no go. Am I right in believing that overpaying every month would be better than reducing the term and paying more in mortgage payments. I would guess the earlier in case of eventuality that you couldn't meet the higher payments. Ive calculated that o/paying between 100-150 a month could knock between 4-5yr off. Its stressful doing it alone and your the only one making the decisions and your not clued up. Wish Id moved years when the kids left home.

donmel123

King -the feedback I have been getting on here have helped me understand my situation a lot more, and I realise there are things I need to put in place or do for when I retire to enable me to continue paying mortgage or whats left of it, should I wish to stay in the property. As also mentioned I may wish to sell and buy cheaper and smaller in a quieter area and pay outright with the equity. These are all things I need to consider and I will.

AnotherJoe

donmel123 wrote: »

Thanks Yvonne and amateur, Thats what I have been stressing about mainly, the fact It'd be over so long. I would definitely overpay to reduce the term. I have 9.5 years left on current and to match that term I would need to more than double the payments so thats a def no go. Am I right in believing that overpaying every month would be better than reducing the term and paying more in mortgage payments. I would guess the earlier in case of eventuality that you couldn't meet the higher payments. Ive calculated that o/paying between 100-150 a month could knock between 4-5yr off. Its stressful doing it alone and your the only one making the decisions and your not clued up. Wish Id moved years when the kids left home.

The difference is, if you go go for a longer term and overpay, then you can stop the overpayments if you get into difficulties. If you agree upfront to the same higher payments as if you we overpaying, you have no flexibility.

But it sounds as if in your case, you have limited flexibility to make overpayments anyway unkess you were exaggerating when you said you could just about make an extra £100.

Bottom line, as you've now recognised, you need a plan as to cope with retiring, lowered income, and a mortgage.

Thrugelmir

donmel123 wrote: »

King -the feedback I have been getting on here have helped me understand my situation a lot more, and I realise there are things I need to put in place or do for when I retire to enable me to continue paying mortgage or whats left of it, should I wish to stay in the property. As also mentioned I may wish to sell and buy cheaper and smaller in a quieter area and pay outright with the equity. These are all things I need to consider and I will.

Affordability is top of the lenders agenda. So source and nature of retirement income is key. In addition with interest rates unlikely to remain indefinitely low. No lender is going to risk the wrath of regulators by lending irresponsibly. What ever you may decide to do in the future doesn't figure in the decision process as of today.