48 years old - Should we continue renting or buy?

[Deleted User]

After twenty years, give you'd have paid off most of the mortgage, you'd only be worse off if the value of your house has plummeted to a few quid.

Remember that the alternative to buying is renting. You don't get any money back when you stop renting (apart from your deposit). 

Salemicus

moneysavinghero said:

Rent of £700 is low for an income of £80,000. You should be able to save up a decent deposit fairly quickly.

But you don't know anything about their financial situation, or what their other expenditures are. For all you know, this couple have large necessary expenditures on other items, like childcare, transport, maybe even debt repayments. How can you possibly know what they can achieve "fairly quickly"?

But you do know that OP has savings of just £15k despite being 48 and having a household income of £100k, and that her husband has been bankrupt. Does that information suggest she finds it easy to save money? Or do you think, on further reflection, that there are probably reasons why she won't be able to save up what you consider a "decent deposit" any time soon? Potentially through no fault of her own, I might add. So your response comes across as mean-spirited.

moneysavinghero

Salemicus said:

moneysavinghero said:

Rent of £700 is low for an income of £80,000. You should be able to save up a decent deposit fairly quickly.

But you don't know anything about their financial situation, or what their other expenditures are. For all you know, this couple have large necessary expenditures on other items, like childcare, transport, maybe even debt repayments. How can you possibly know what they can achieve "fairly quickly"?

But you do know that OP has savings of just £15k despite being 48 and having a household income of £100k, and that her husband has been bankrupt. Does that information suggest she finds it easy to save money? Or do you think, on further reflection, that there are probably reasons why she won't be able to save up what you consider a "decent deposit" any time soon? Potentially through no fault of her own, I might add. So your response comes across as mean-spirited.

You are right, given the husbands background it is entirely possible that they are still living beyond their means. But that is a choice. When you have income of £80k and rent of £700pm you have the choice to save towards a house or spend it on your lifestyle. Both are valid choices. But they want to buy a 250k house, they need 25k deposit at least, they need to save more. That's the reality.

AdrianC

Carterme73 said:

...for a £250,000 mortgage...

You will not get a £250k mortgage on a £250k property. That would be 100% LtV, and has not existed since the crash in 2008.

Let's go with a 90% LtV, £225k mortgage. Over 20 years, at 2.5%, you will be paying £1,200/month. Of that, roughly £500 is interest, and the other £700 is paying off the borrowed money. If you sell in 15 years time, you will need to repay less than £70k on sale. The rest of the debt will already be paid off!

You buy for £250k now, £25k from savings and borrowing £225k.
You sell for £350k in 15yrs.
You repay £70k, and walk away with £280k in your pocket.

Salemicus

You are of course right, both in the need to save, and that people are responsible for their own choices. In fact, I'm even more extreme than you, I'd say it's completely one-sided, because you end up having a better lifestyle too if you save rather than live beyond your means. I just think you catch more flies with honey than with vinegar.

Carterme73

Hi. No, we haven't been living beyond our means. My husband and I have been paying two rents as he worked away but we are now in a position to live and buy together so we are now only paying £700 rent.