In 40s - Too old to get a mortgage?

JimmyVik · 13-09-2021 11:33am #1

So I was having a conversation about property as usual with a friend at the weekend.

He pointed out to me that I am the wrong end of my 40s now and that will start having an effect on what I can borrow.

Now im actually sitting on the fence about buying or just renting forever. Probably going to just rent forever, but i might change my mind, so it might not apply to me.

But it got us talking about it.

I know lots of couple who ar in their mid 40s now and are looking to buy a house.

The banks will give them a 20 year mortgage and no more. Which effects the amount they will give you.

So we came to the conclusion that if you intend to buy a house, you are best off getting on the ladder and buying a house no later than early 40s or you might end up renting forever. Some of the couple we know are holding out for the house of their dreams for several years now. They would be much better buying a house and get their rent paying their own home down now, so that if they decide to trade up in a few years they would have equity to make up the difference. Waiting is just having them watch the dream get further away. And each year makes it even harder.

Anyone else in their 40s and think that their age is going to start effecting whether or not they ever get out of renting.

SteM · 13-09-2021 11:37am

It goes without saying. Lenders want the mortgage paid off before you hit retirement age when your ability to repay may well be effected. Realistically, depending on the loan amount, you want to be buying by your mid 30s to keep monthly repayments more manageable imo.

FutureGuy · 13-09-2021 11:41am

https://www.boards.ie/discussion/2058208588/in-40s-too-old-to-get-a-mortgage

I got my mortgage last year when I was 43. No issues other than I wouldn't get longer-term mortgages that ran past retirement.

JimmyVik · 13-09-2021 11:41am

Not to mention you'll probably have all your kids by 40 or so. You might have none or fewer in your early 30s. Each one is going to ring down what you can borrow and increase the cost of what you are buying.

Looking back and knowing what i know now, I think I would have bought the first place I could afford (even if it was an apartment) in my mid 20s and then revisit mid 30s or after i had kids.

BronsonTB · 13-09-2021 11:43am

The older you are in getting a mortgage you generally need a bigger deposit to keep the repayments manageable.

Generally they will only lend until you retire so the sooner you buy , the less your repayments.

But plenty buy in the 40's/50's but usually are second time buyers that have a decent deposit so lower mortgage amount.

Price of potential property + your deposit will tell if you can get a mortgage with realistic repayments.

Waiting for the dream house is very unrealistic, always a compromise & the older they get, the harder it will get.

L1011 · 13-09-2021 11:44am

There is a maximum age each lender will let you have a mortgage until, which will obviously impact total borrowing potential. However, I know someone in their early 50s who has just taken on their first mortgage.

13-09-2021 11:46am

The banks will lend to the age of 67.

If retirement age is increased the banks will lend to whatever age that may be.

No issue getting a mortgage in your 40s, depending on your income. I met a lady last Sat just buying a home, getting a mortgage in her early fifties.

HBC08 · 13-09-2021 11:46am

Just chatting to a friend yesterday about this,her and her partner are 44 and 43 relatively and just got their first mortgage. The bank would only give then a 20 year mortgage because of their age

JimmyVik · 13-09-2021 11:53am

https://www.boards.ie/discussion/comment/117884143#Comment_117884143

The guy I was talking to has had 3 banks only offer them a mortgage up to when the youngest of them is 65.

He eventually went hrough a broker and still they could only get him a term until age 65. One offered 66 but their interest rate was far higher than the others.

Which brings up another thing we were talking about too. In his company their contract states that they must retire at 60. Now the broker didnt ask to see anything that says the job is until 60, but in future i guess they could do this on mortgage applications.

Get into your first house/apartment as young as you can I think is the way to go. Buy as big as you can afford at that time, and maybe you wont have to trade up. But get somewhere.

theteal · 13-09-2021 12:12pm

Yeah I had alarm bells going off in my head when 34 knowing I had to get my ass in gear. I wasn't even aware that banks had certain policies but I just figured that paying out such money beyond retirement age would be quite difficult. It actually annoyed me in the end, how easy the house buying process was (broker is a gent) when looking back at the 8 years of rent we had just paid on a much smaller house.

So I'm not sure what people are expecting but surely they know the bank won't give a 30 year term to someone 40+ and then obviously that'll have a knock on to the amount offered. Now if only house prices weren't as stupid as they are, a 20 year term would be grand for most.

Mrs OBumble · 13-09-2021 1:21pm

Something else to keep in mind is your actual employability once you are over 50: if you lose your job through ill health, redundancy, etc, then it may prove very difficult to get a job offering anything like your previous salary.

MaudL · 13-09-2021 1:52pm

I got my mortgage at age 39. During the original discussion, the mortgage duration was so it would be fully paid off by the age of retirement at age 6. But because I have a company-matched pension plan they increased the duration so the paid off date would be at age 70.

13-09-2021 2:08pm

https://www.boards.ie/discussion/comment/117884174#Comment_117884174

In my job, mandatory retirement is 60 years of age.

Plenty of banks will give me to age 67 though. You can always work for someone else after mandatory retirement

notAMember · 13-09-2021 2:17pm

On the thread title, no, it's not too old to get a mortgage.

A mortgage is just a loan with property used as collateral. There are many different types.

Say you live in an old family house, with no loan on it, you take out a 6 year mortgage to pay for replacing the roof. Doesnt' really matter what age you are, as long as you have capacity to repay.

Take someone who is a healthy retired person (important for life assurance). They may have several types of income.

Defined benefit from a former job (say they were a teacher or something) (25k)
Rental income from renting out a room (8k)
Govt pension (12k)
Share dividends (5k)
Income from a little business (say they set up a woodworking business or something as a hobby and they sell some handmade furniture at exhibitions) (5k)

This person would be on 55k a year in retirement. That's capacity to repay a mortgage if they wanted to do work on their house or buy something small.

The most important thing to have for starting off with no history of previous mortgages is the deposit. You would ideally have a large deposit to reduce the risk for underwriters.

suds1984 · 13-09-2021 3:43pm

Another factor that you might need to take into account is that it can be harder to get mortgage protection insurance in your 40’s if any health issues have come up as person is getting older.

mcmoustache · 14-09-2021 12:10am

I was offered a 29 year mortgage by the bank and I'll be 40 very soon. I was surprised - I'd be paying it off until I was 68. Went with 25 tears instead just to be practical about it for my own sake. The idea of paying a mortgage coming up to 70 didn't sit right with me.

Being in your forties is definitely not something that's putting the banks off. There'll be higher insurance and stuff but they'll still give it to you.

jimmycrackcorm · 14-09-2021 12:45am

https://www.boards.ie/discussion/comment/117884908#Comment_117884908

Mandatory early retirement can't be enforced any longer after this case:

https://m.independent.ie/irish-news/news/85000-award-for-nurse-told-to-retire-at-66-a-warning-to-all-employers-says-legal-expert-40821044.html

mariaalice · 14-09-2021 8:20am

The more important factor is that the particular mortgage lets you overpay without penalty.

Ray Palmer · 14-09-2021 10:03am

It is certainly more difficult after 40 and has further ramifications. Many people boost their pension as they get past 50. With their mortgages much less or finished it gives them that ability. A mortgage later in life is much higher while most people at that age the mortgage is a much reduced rate of their income. You may end up with a property but very little pension or money to maintain the property

14-09-2021 10:07am

I'm just wondering how I'm going to fund myself into the future. Seriously thinking it might be time to emigrate to the continent, somewhere I might be able to fund myself and find long term accommodation, as I can't really see how I fit into the Irish economy model anymore.

Ray Palmer · 14-09-2021 10:31am

https://www.boards.ie/discussion/comment/117888545#Comment_117888545

Where exactly are you going to go where the local salary makes it so you can afford life going forward? There is a world wide housing shortage

JimmyVik · 15-09-2021 10:59am

https://www.boards.ie/discussion/comment/117888536#Comment_117888536

Very good point.

Your pension pot isnt goign to be very good if when you get to the point where you really start funding it you cant, because that money is going on a mortgage.

You are also more likely after 50 to lose your job and find it difficult to get back into the workforce at the level you were in before.

Ageism is a big, though little mentioned thing when people get redundancy in their 50s or later.

AnRothar · 16-09-2021 10:00am

https://www.boards.ie/discussion/comment/117893799#Comment_117893799

Minor comment.

Most people by their 50's have sort of peaked in their career.

So if they are made redundant they usually have to re-enter at a lower point. So contrary to popular belief it isn't always "ageism"

This too can have a serious impact on their financial situation.

JimmyVik · 16-09-2021 11:48am

https://www.boards.ie/discussion/comment/117898342#Comment_117898342

Give you an example.

In my company management are now around late 40s and 50s.

When hiring they all insist that new fires are in their 30s. Noone above 40.

And yes, even the ones in their 40s and 50s are saying this.

Of course they invite the odd "oldie" to interviews but they never get the job.

I asked one of them once why this unwritten rule and they said 30 to 40 year old will give their lives for their careers. Anyone mid 40s on would give their careers for their lives.

In 40s - Too old to get a mortgage?

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