I'm nearly 50. Is it too late for me to start saving for a mortgage?

ClockingOut

ClockingOut

ClockingOut

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Without any judgement I'm looking for advice on my realistic options (if at all) for saving for a mortgage at 48 years old.

I currently rent and have never owned a home, am single and have £2000 of savings. I can afford to save £400-£450 a month towards a mortgage with repayments of circa £650-£700 per month. I realise that this is very low as I assume that the mortgage term would only be as long as the maximum age of retirement but I don't know enough about mortgages to be able to make a decision.

Would it be better to opt for Shared Ownership mortgages or interest taking into account my age? Added to this I am also an umbrella company employee. Is it too late for me at my age to realistically get a mortgage? With the ever increasing rents recently and minefield of mortgage calculators online I'm really confused and worried about the choices I have in both a buyer and rental market.
 
it's not to late but there are some hurdles.

The deposit would be larger so the area and house price would be key here.

You might need as much as 30% for a motgage, or less if the term is less, like 15 years instead of 25 so higher repayments.

Seek out an independent financial adviser and go for a chat, they are the experts. Most estate agents have one or know one.
 
Would you consider moving to a house share arrangement to reduce your cost of rent so you can save more quicker?

The last couple of years have been really bad for renters looking to buy as house prices will have risen faster than most can save.

Other than that banks are doing lifetime mortgages now so there's probably an option out there.
 
It’s entirely possible to get a mortgage at 50, however most mortgage providers won’t lend beyond retirement age. Be prepared to expect a shorter repayment term. Realistically 15-20 years max.

This will make your monthly repayments relatively more expensive compared with a 30 year old who can repay the money over 25-35 years.

just as an example…

A £300k mortgage repaid over 35 years is ~£1,000 per month.

The same amount repaid over 15 years is ~£2,000 per month.

Both assume an interest rate of 2%.
 
Possible, but you obviously won't be given a long term to pay it off , so depending on how much you borrow, the monthly cost could be prohibitive.

If you can find a way though, and pay it off before you retire, do it. Nothing will feel better when you retire than knowing you own your own place and not having to pay rent/mortgage payments.
 
Would you consider moving/retiring abroad? If you're willing to relocate up north to get on the ladder and it's a big life goal then learning another language and setting yourself up further afield might be worth considering.
 
ClockingOut said:
Without any judgement I'm looking for advice on my realistic options (if at all) for saving for a mortgage at 48 years old.

I currently rent and have never owned a home, am single and have £2000 of savings. I can afford to save £400-£450 a month towards a mortgage with repayments of circa £650-£700 per month. I realise that this is very low as I assume that the mortgage term would only be as long as the maximum age of retirement but I don't know enough about mortgages to be able to make a decision.

Would it be better to opt for Shared Ownership mortgages or interest taking into account my age? Added to this I am also an umbrella company employee. Is it too late for me at my age to realistically get a mortgage? With the ever increasing rents recently and minefield of mortgage calculators online I'm really confused and worried about the choices I have in both a buyer and rental market.
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I recently took out a mortgage - I'm a bit older than you. Term is 19 years for £250k loan. Best thing you can do is speak to a mortgage advisor, as at the time I was looking I thought my options were very limited - they weren't as limited as I thought.
 
Looks like about 130k for a basic house there. Low enough that stamp duty isn't a concern.

How much deposit you'll need:
5% deposit = 6k
10% deposit = 13k
15% deposit = 19k

The amout they'll lend you is based on your income. Usually about 4.5 times your salary. So if you want to borrow 124k you'll need to earn about 28k.

How long it'll take to save a deposit and additional costs:
2k already saved.
450 a month for 1 year = 5.4k
450 a month for 2 years = 10.8k

Plus there are other moving costs, so a couple of years saving is probably required. The problem is the house price goes up while you're saving.

How long it'll take to repay:
700 a month over 10 years = 84k
700 a month over 15 years = 126k

Given your age, and the fact you don't have a deposit yet, I think planning for a 15 year mortgage is realistic.

Remember you're charged interest, and not a good rate with a low deposit. Your LTV improves over time so you can access better rates, but interest rate rises due to inflation might cancel that out.
 
Don't do it. You only have £2000 in savings which is next to nothing and only being able to save £400-450 per month isn't going to cut it. It would take you forever to save up enough of a deposit, and by the time you do, house prices will have likely increased another 40 or 50% at least so you'll need an even bigger deposit. Even if you did it, you'll likely have a miserable existence thereafter.
 
Just to note in general, even if you're young, it's very difficult to buy a house these days. House prices are going to keep increasing, as is the cost of food, fuel, and just about everything. The winners are those who were able to buy houses before 2007. I have a friend who bought up lots of houses for cash in the 80's and 90's and he's been renting them out ever since. He obviously hasn't needed to work and his entire life has been a life of leisure, being able to do pretty much anything he wants, and go anywhere he wants. The money just pours into his bank account month on month. He wasn't born with a silver spoon in his mouth, but nevertheless, by today's standards, he could be seen as part of the elite club.
 
purplesky said:
Don't do it. You only have £2000 in savings which is next to nothing and only being able to save £400-450 per month isn't going to cut it. It would take you forever to save up enough of a deposit, and by the time you do, house prices will have likely increased another 40 or 50% at least so you'll need an even bigger deposit. Even if you did it, you'll likely have a miserable existence thereafter.
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My prospects in that case are looking bleak. With rent increasing year on year and house prices also rapidly increasing it seems like I'll heavy lose out buying or renting. I'm not really prepared to relocate to another country as that would be too much of an upheaval for me....
 
Many mortgage lenders will lend past 70. 70 is basically the age most lenders deem is retirement age.

Basically, TIR (term into retirement) criteria seems to be pretty standard across lenders following MMR (Mortgage Market Review) and affordability.

If you are within 10 years of retirement you'll have to prove your pension income, which is a nightmare for all parties. Basically forget it....

But......

In your situation it's over ten years, you don't. They will probably lend past 70 depending on what you do for a living. If you are a bricklayer forget it, but provided it's not too much of a physical job you do, and you state a higher retirement age (eg 75) it's very like the lender will agree that, so at 50 you could get a 25 year term.

What they almost certainly will check though is you at least making some kind of pension contributions now.
 
Not to derail but I’m curious as to why you’d rent for so long? Seems bizarre to me. There is no upside to renting for >5 years. Rent generally will cost more than a mortgage.

purplesky said:
Just to note in general, even if you're young, it's very difficult to buy a house these days. House prices are going to keep increasing, as is the cost of food, fuel, and just about everything. The winners are those who were able to buy houses before 2007. I have a friend who bought up lots of houses for cash in the 80's and 90's and he's been renting them out ever since. He obviously hasn't needed to work and his entire life has been a life of leisure, being able to do pretty much anything he wants, and go anywhere he wants. The money just pours into his bank account month on month. He wasn't born with a silver spoon in his mouth, but nevertheless, by today's standards, he could be seen as part of the elite club.
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And where did he get this cash if he wasn’t ‘rich’ to begin with? As I’m pretty sure every man and his dog would do the exact same if they could.
 
Thanks for the suggestions so far. Not sure I could share with another person to cut costs. I would certainly look into getting independent financial advice.

If I made sacrifices like just getting a very small cheap property in an area where I would not particularly want to live for say , 4 years , then selling and hopefully getting a bigger deposit to then put down on my next property that might be feasible, if it means just getting onto the property ladder? My worry though is that It may be even harder for me to get another mortgage, being even older by that stage.
 
ClockingOut said:
Thanks for the suggestions so far. Not sure I could share with another person to cut costs. I would certainly look into getting independent financial advice.

If I made sacrifices like just getting a very small cheap property in an area where I would not particularly want to live for say , 4 years , then selling and hopefully getting a bigger deposit to then put down on my next property that might be feasible, if it means just getting onto the property ladder? My worry though is that It may be even harder for me to get another mortgage, being even older by that stage.
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Get into crypto.
 
Buy a canal boat.

Prices are a bit crazy though as lockdown caused a surge of older people selling/renting their houses and buying a canal boat to retire on. Doesn't seem a great idea for retirement age but in your 50's it should be ok. Mooring in London would be a nightmare though so you'd still need to move away and it will always be a depreciating asset but you will own it.
 
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