What age will you pay off your mortgage?

mattdavis

Embarrassingly, when it comes to personal finances like mortgages/loans etc I am essentially illiterate. I just don’t find it interesting and I am so risk-averse that it is almost pathological. I’m always convinced that house prices are about to collapse and that investing in the stock market is insanity, even though lots of clever friends and colleagues are very clear that is not the case, and live in nicer houses etc. The plan has always been to be debt free as soon as poss and any savings we have just go in cash ISAs. 

So we’ve always lived quite carefully, in a relatively modest house (although in the grand scheme of things, particularly in the current climate, we are very fortunate). We took out our 25 year mortgage 18 years ago, and if we didn’t change anything could be in with a shot of getting rid of it by age 50. For some reason that makes me feel warm and fuzzy, but practically it would also allow some financial freedom to help out the kids as they start at uni (and god knows what that will cost then). 

Recently though, as the kids get bigger and seem in need of more of their own space, we’ve been reconsidering moving to something more substantial - more of a proper family home than the maxed out converted cottage we have now. Our house is fine - kids have got their own room (albeit one of them pretty small single), some space to work at home, but it is just very cluttered and quite cramped as not much place for storage/low ceilings etc. We looked at a house in the next tier up today, and it was lovely with higher ceilings, larger rooms and just more space. Felt like a proper ‘grown up’s’ house. 

But the next step up is a lot of money and so we would have to extend the mortgage term considerably to make it doable - so after the thoughts of getting shot of debt as quickly as possible, that makes me feel nauseous. 

Logically, I’m thinking with interest rates so low, it’s probably a better time to borrow than ever.

I’d asked a couple of friends how long their mortgages were and was surprised that both of them were mortgage free, mainly due to family inheritances. I’m guessing that in early/mid 40s, that’s unusual so didn’t draw conclusions from that.

So - Is taking a mortgage until age 58-60 ish common/usual? Does anyone who’s done anything similar reflect on it as a good decision or does it feel like you’re restricting your life options to meet a monthly payment for longer than needed, for little real extra benefit.  I regularly feel like I get sucked into thinking I ‘need’ stuff which, when it comes down to it, probably makes very little real difference to quality of life. 

Feel like I’m rambling and am acutely aware this all very ‘first world problem’ stuff - but if anyone has any experiences of similar decision making, your thoughts would be appreciated.   

underdog

My mortgage will take me up to 63 years old, I will finish it before then if it's financially favourable to do so though.

Look at it this way, 65 isn't retirement age anymore, and by the time you get to it god knows if there will even be a retirement age. If you can afford it and it will make the next 20 years of your life more pleasurable, why not?

Just because it is designed to be paid by the time your 60, nothing suggests you won't pay it off before then.

RandallFlagg

17 more monthly payments for me so age 54. Hopefully never to have a mortgage ever again after that.

Personally the thought of having a mortgage any longer than that and having to work into my 60s to pay it off fills me with dread.

EricTheWeary

People get mortgages up to about 70 or so. 

Ours was in three parts: 
1 - MrsTheWeary’s house when we met
2 - the house we bought together
3 - extension to the house 

It did mean that they got paid off at different times, we paid the biggest bit off early with redundancy money and the final other bit last year. So before we were 55. 

I guess we are better off each month but both are part time and feeding, heating four ( and sometimes five) adult sized people so not rolling in money. 

I’d like to move but more to somewhere nicer than bigger ( hopefully the kids will get the hint and move out). 

richardhomer

65 - if I last that long....

Boromedic

Yep, 64 for me, didn't buy till I was 39 so unfortunately that's the way the cookie crumbles. Still I'd be paying the same in rent either way so hey ho... Most folk I know will be paying into their fifties at least.

axisus

er ... dunno .... 65 I think? Having said that we are trying to get an extension so need to borrow more money

spark240

I could finish it now I guess....but Im happy to pay till 60...( 5yrs)...I dont mind working....I just dont want to Have to work....I want it to be my choice....problem of course is after 50+ iy can be tricky to get work depending on your skills of course.

thumpingrug

Our would have been clear next year, but when our daughters relationship fell apart and her and grandson needed somewhere to live we bought a shared house and extended our mortgage for a few more years.  So 4 more to go.  That will make me 58.

mattdavis

Thanks guys - appreciate the responses. Theoretically my NHS retirement age is 68. Hard to envisage doing this until then, but , even though it’s quite tough, I think fundamentally I enjoy the essence of my job (if not lots of the crap that does alongside it). So I guess the strong probability is that I’ll still be working into my 60s. Probably need to get over my neuroses and back myself a bit... 

Dave8

If everything stays as it is.. I hope to have mine paid off by the time I’m 40... I’m currently 35.

that is if I don’t move to a bigger house or quit my job/get fired etc... who knows what could happen in thIs post apocalyptic world we live in. 

Mainly because of over payments, when I took the mortgage out it was due to finish when I get to 60. 

mattdavis

Impressive @Dave8 !

Dave8

mattdavis said:

Impressive @Dave8 !

I don’t have an expensive house... a big part of being able to pay off so quickly 

westford

There’s less than 5 yrs left on ours, I’ll be 43. That’s assuming we stay here anyway.

NPP

how old are the kids? If they are moving out (or one of them does) within 2-3 years there'd be no point in looking for a bigger house - and if you can afford the mortgage on a bigger house now you can also afford to pay off your current one quicker and be completely debt-free. 

I, like you, hated the idea of debt and wanted my freedom back, so I cleared the mortgage as quickly as I could. From a purely economic point of view, this was nonsense and I should have put anything I had available after covering the minimum monthly payments on the mortgage into a pension instead, taking advantage of the tax breaks (i.e. 20% or 40% free money) available for pension contributions. 

Speaking of which, not buying a bigger house will leave you with some money to invest into a pension, giving you the option to retire early if you are so inclined. 

Confusingly, houses are part an economic asset we invest in and part a place where we live, and both aspects need to be considered when buying and selling them. Having a cheaper house and some savings gives you some freedom but less room to live in - a bigger house doubles up as your main investment and may bring good returns, but only if you are prepared to sell up and downsize eventually. 

(sorry if all that was far too obvious, I don't even know why I started typing ...)

Stratavarious

Paid all the rest off at 49

Bought within our means and did a lot of repair work on the house.

gordiji

Sixty bloody six . 55 now . We could knock the outstanding debt in half with savings & we have 60% equity in the house. It is beautiful however. 

digitalscream

We bought ours last year (I was 41), and we'll pay it off by the time I'm 63. I plan to get there at least five years early, though.

ronnyb

Bought our second house in 1983 and the mortgage repayment was half my monthly income. What with inflation it was paid off by about 1996 when i was 42. Never had another since or any loans. Moved houses several times since that renovating each one and making decent money every time. One of them, a detached bungalow increased in value by 125% in 4 years in the early / mid 2000's. Not sure that those kind of increases will ever be replicated again though. The old saying of 'buy the worst house in the best area' is very true. 

skunkwerx

Well I’m 32 and I havent started yet! 

Then again I’ve only actually been properly earning since last year.. the entire retail career up to that point made life pretty impossible to live. 

mattdavis

NPP said:

how old are the kids? If they are moving out (or one of them does) within 2-3 years there'd be no point in looking for a bigger house - and if you can afford the mortgage on a bigger house now you can also afford to pay off your current one quicker and be completely debt-free. 

I, like you, hated the idea of debt and wanted my freedom back, so I cleared the mortgage as quickly as I could. From a purely economic point of view, this was nonsense and I should have put anything I had available after covering the minimum monthly payments on the mortgage into a pension instead, taking advantage of the tax breaks (i.e. 20% or 40% free money) available for pension contributions. 

Speaking of which, not buying a bigger house will leave you with some money to invest into a pension, giving you the option to retire early if you are so inclined. 

Confusingly, houses are part an economic asset we invest in and part a place where we live, and both aspects need to be considered when buying and selling them. Having a cheaper house and some savings gives you some freedom but less room to live in - a bigger house doubles up as your main investment and may bring good returns, but only if you are prepared to sell up and downsize eventually. 

(sorry if all that was far too obvious, I don't even know why I started typing ...)

Kids are 9 and 12 - and with the world as it is, if they go to uni (which I hope they do, but may not be the right thing for them) they may need to stay at home anyway. So I’m working on the premise a family home will be well used for at least another 8-10 years or so. 

What you say about the duality of a house as a home and an investment is very true. I’ve always seen it very much as the former, but I guess considering the investment side of it makes it easier to rationalise extending the mortgage! I guess at least at the end of the mortgage, even if house prices went down, you’ve still got a decent roof over your head, whereas if I’d stayed in a smaller place, the lost money on a stocks investment, I’d be fecking livid with myself.