Buying a house (with bigger mortgage) in your fifties

BettyBoof

https://forums.moneysavingexpert.com/discussion/comment/81899904#Comment_81899904

Thanks @paulintheprocess you've hit the nail on the head about how the space matters day to day. We had kids later in life so they are young teenagers and the extra space would genuinely add to our quality of life.

We will try to stay flexible and downsizing once the kids have flown the nest has always been a possible (probable?) part of the plan.

Bigphil1474

OP, we paid the mortgage off on our old house during Covid, and were mortgage free for a couple of years. Decided we needed a bigger house and took out a new mortgage 2 years ago when I was 54. Fortunately not too big and we can afford to overpay, so it should be paid off in 10 years. Only thing to consider is if you would want to downsize when the kids leave home, and how long that would be. Ours had already left but we have grandkids and other family that visit, so we basically bought a 4 bed house so we could have people come and stay in the holidays, and so I could have decent home office.

BettyBoof

Thanks @Angelica123 we have done the maths. We are currently on track to retire in 10 years time but I think this house purchase might add another five years to that. We have some money we can access in 10 years that would clear our current mortgage (as it would stand in 10 years) but likely wouldn't be enough to clear the new mortgage. So we'd either be left with a mortgage still to pay or would need to find other ways to overpay during the next 10 years. DH doesn't mind working longer, I have mixed feelings.

I think the space will still feel worth is as they'll bring friends and partners home from uni and beyond. Although downsizing has been part of our plan, we may decide to stay in the bigger house to accommodate grandchildren. Though that is a long way off!

BettyBoof

@RelievedSheff we feel exactly the same re the now or never thing. If we leave it any longer we'll have much higher monthly mortgage repayments as the term we are able to borrow will shorten.

I think I'm having a wobble about finances as everything I read about the economy seems to be doom and gloom.

silvercar

We moved when the kids were 12 and 16. That was 20 years ago and the house is too big in all honestly, the garden is definitely too big, but we love the house and don’t want to move. Our advantage is that we are in our early 60s, so in the next couple of years we will clear the mortgage and semi (at least) retire. When eventually we downsize it will be a big downward jump, but in that time the value of the property will have increased by more in absolute terms than the increase on the smaller house would have been, so that puts more money in the kitty.

For your viewpoint, if you move now and suffer a larger mortgage for a time and delay retirement, that should give you more money when you downsize and retire. So as long as you can manage over the interim, it could work out well.

Herzlos

https://forums.moneysavingexpert.com/discussion/comment/81900035#Comment_81900035

I think that's a key point; the later you leave it the shorter the mortgage term you'll be able to get, and potentially the less you need it.

There's nothing stopping you upsizing now when you need it and downsizing in 10 years to bring your outgoings down and not delay retirement as much.

Silvertabby

https://forums.moneysavingexpert.com/discussion/comment/81899712#Comment_81899712

Why downsize from a property you love? There has only ever been the two of us, but our forever home is a 4 bed detached. Our bedroom, guest bedroom, study and hobby room. Certainly not too big for us.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81900035#Comment_81900035

As this article rightly points out the doomongering about the economy has probably been largely overdone.

Faisal Islam: Is Reeves right in saying we're turning a corner? - BBC News

On the main topic, my thoughts are that it is difficult to comment on the wiseness of getting a bigger mortgage, without knowing more about your finances such as your pension situation, your salaries in relation to the increased mortgage payments, how much you need to support the children at Uni etc. Everybody's situation is different.

On a practical level if this new home is likely to be your forever home, then think ahead about how suitable it might be when your were 20 or 30 years older. Not just the house itself, but the location ( such as not on a 1 in 3 hill for example) .

monkey-fingers

Are your teenagers likely to be going to University?

Can you afford the £25k+ a year if they were there together?

EssexHebridean

In 2023 we opted to move from a 2 bed flat to a 3 bed house - we'd already cleared the mortgage on the flat some years earlier, so were completely new mortgage applicants. We were both around 50 at the time - one of us being slightly over, the other being fractionally under.

We took the minimum amount we could get away with (£115k) using al the equity in the flat and a chunk of savings to cover the balance, at the shortest term (16 years) we were comfortable with (having done the calculations around "what if" mortgage rates increased) and having moved, immediately started overpaying. The plan from day 1 was that all being well it would be cleared in 10 years at the longest - actually we're now looking like it may be substantially shorter on timescale than that.

The move was the single best decision we ever made - it has literally been life-changing for us both. we only moved quarter of a mile down the road but it may as well have been a complete uprooting with the positive differences it's made!

Do your sums thoroughly. Cover the "what ifs". Don't overstretch yourselves, but also don't be over-cautious - the sums inform what works for you. Start overpaying from the very first moment you can - as long as that makes sense allowing for your future planning and interest rates etc. Choose your product carefully - balance the length of any fixed period with your projected timescales and overpayments.