Bigger mortgage at 40?

muffinek

My partner and I are 40 this year. We got on property ladder only 4 years ago. We are in London so struggled with saving deposit. We have 300k and 30yrs left on current mortgage. 
It never meant to be our forever home and the plans always has been to move to bigger and better house. 

However I have been recently wondering if it would be smart thing financially to add another 100k to mortgage at our age. We don't really want to work until we drop but with our small pension pots that may be the case anyway. 

We can manage larger mortgage fine but just not sure if this would be right move and we won't regret it in 10yrs

Barny1979

Well are you prepared to be paying off a mortgage still in your late 60s, will you both still be working and have the earning power at that age?

dimbo61

If you have good income at the moment then why not overpay the mortgage every month.
This reduces your debts while also increasing your equity for the next bigger property.
I have a mortgage taking me up to 68 and many lenders are now offering mortgages to 70/75

K_S

muffinek said:

My partner and I are 40 this year. We got on property ladder only 4 years ago. We are in London so struggled with saving deposit. We have 300k and 30yrs left on current mortgage. 
It never meant to be our forever home and the plans always has been to move to bigger and better house. 

However I have been recently wondering if it would be smart thing financially to add another 100k to mortgage at our age. We don't really want to work until we drop but with our small pension pots that may be the case anyway. 

We can manage larger mortgage fine but just not sure if this would be right move and we won't regret it in 10yrs

@muffinek I guess it boils down to your personal circumstances and attitude. Do you overpay, what % of your net income you're comfortable to use towards a monthly mortgage payment, what value (monetary or otherwise) you attach to a move to a bigger/nicer home, how you see your future career/income prospects, etc.

The term is always malleable, you can always make overpayments to achieve the same outcome as a shorter term. 

muffinek

I am not overpaying currently but could do. I have about 25% equity in the house but still 300k left to pay. I don't really expect any significant increase in the income. I have also one pre-schooler. 

I am just tempted to make one more move on the property ladder. However my head says that at 40 I shouldn't be really significantly increasing my mortgage. 

flashg67

Each to their own of course, but in my case, instead of using my savings to clear my mortgage, but stay in a house I wasn't in love with,  I've used them, plus a larger mortgage to buy our forever home. I'm 54.
I'd say if you're going to do it, do it sooner rather than later - our borrowing ability was affected by our ages, meaning us having to take a shorter term (to 70 in our case, although we intend to overpay anyway)

dimbo61

You " Hope " to move to a bigger and better home which will cost more unless you move to a cheaper area !
Now unless you win the lottery or inherent a load of money you will need to borrow more and have a bigger mortgage so why not pretend you have a bigger mortgage by overpaying by say £1,000/£2,000 a month.

enthusiasticsaver

If you intend to move to a more expensive home by means of a larger mortgage then I would say do it sooner rather than later as some lenders will not lend past 70 so that will impact on the term you can take the mortgage out for.  I would overpay your mortgage in the meantime to give you a lower LTV ratio as that will mean usually a lower rate. 

tinytiddles

I did it last year aged 40, mortgage was more than twice what the original one was and we reduced the payment term by 6 years so it would be paid off sooner rather than later. We are in the very fortunate position that our financial situation is very different to what it was when we bought before. As another poster said, it is very much down to what your own wants and needs are but I was very much of the “sod it let’s do it view” as in its now or never. If Covid has taught me one thing, it’s that life is too short and we should live for the moment not survive on ifs and buts - so if you can afford it then why not? Good luck ☺️

Thrugelmir

After factoring in moving costs . How much extra will what remains of a £100k buy you. 

steph2901

I'm 48 and currently in the process of applying for a bigger mortgage for a better house.  Working from home for a year has made me realise I don't want to live here forever.  Good luck