Mortgage vs Pension

ChirpyOtter

Hi. I am 50, single, medium income. There is a potential opportunity to buy a house, but this would be on a 100% mortgage,  with a friend as a guarantor. Obviously this would take me to 70 years of age,  at an affordable monthly repayment. It would also mean I would struggle to manage bills - for example,  I will soon need another car (required for work) and will have almost no surplus income left over at that point (mortgage repayments would be higher than current rent).

Or, I could save more money towards my pension....

Thoughts on best next steps? No savings or large inheritances anticipated. 

dunstonh

Doesn't sound that attractive.

a) 100% mortgage with a guarantor isn't going to be good rates
b) unaffordable at current rates (no surplus income and cant pay for future things).
c) no savings/emergency fund.   If you haven't built this up with the rent being lower, then it suggests that taking on a higher commitment is unaffordable.

ButterCheese

It depends on a lot of things that you haven't yet shared.  What sort of area, what size house i.e. what sort of monthly payments you can afford.  Is a 1 bed flat in an under-served area, or a 2 bed semi in poshville?  You don't get much for 200k now, which would see you paying around 1200+ per month until you are 70.

Is your job stable?  Do you like your job?  Could you be easily employable in the same job if somehting happened to this one?  Can you see yourself working for the next 20 years whilst having quite a low safety net?  For decades people have been sold mortgages that get them a nice house but you have to be honest with yourself and realistic.

And have you been paying into your pension for 30 years?  Can you calculate if you will receive the full state pensino by the time you are 67 (or whatever it is for your age?).  

I wouldn't write it off entirely; if you are paying rent at about the same rate now, it could be a wiser decision to buy, but if it's going to leave you with too much month left at the end of the money, I'd consider other options

CliveOfIndia

On the face of it, it doesn't sound like the most prudent approach.

ChirpyOtter said:

It would also mean I would struggle to manage bills - for example,  I will soon need another car (required for work) and will have almost no surplus income left over at that point (mortgage repayments would be higher than current rent).

So how do you anticipate being able to pay for the car?  A loan?  Even if you managed to get one, the additional payments towards that would mean you would be struggling pretty badly, from what you've described.

Quite apart from that, what will you do when the boiler needs repairing, of you need to pay a plumber to fix a leaky pipe?  Home ownership inevitably entails a fair amount of cost, both expected and unexpected.  Even if nothing actually breaks, your boiler will need servicing, the general fabric of the house will need routine maintenance, you're probably going to want to replace carpets and curtains at some point, and 1001 other potential expenses.

Without knowing more precise details of your circumstances, on the face of it I'd say you're better off to stay renting, unless you can find something cheaper to buy which fits within your budget more comfortably.