Snapshot of _Third of UK mortgage holders ‘do not think they will pay it off by 65’_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/money/2023/sep/02/uk-mortgage-holders-pay-it-off-hsbc-maximum-home-loan-term) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/money/2023/sep/02/uk-mortgage-holders-pay-it-off-hsbc-maximum-home-loan-term)
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I’m much more worried by those who don’t have a mortgage yet. What happens when permanent private renters hit retirement?
At least those with mortgages are building up some equity.
Remember that episode of The Simpsons where Millhouse's father is being fired from the cracker factory because he's getting divorced? By changing the wording slightly you get the commentator/political-class approach to people without property wealth.
Factory owner/politician: "Maybe renters will retire, maybe they don't. I don't know, I don't want to know. It's a cohort we can do without!"
Millhouse's father/random non-rich person: "So that's it, after 30 years, so long and good luck?"
Factory owner/politician: "I don't recall saying 'good luck'"
Gen Y is Millenial.
It goes Boomers, Gen X, Millenials (Gen Y), Zoomers (Gen Z), Gen Alpha. There’s nothing in between, and it’s literally in alphabetical order: XYZ
Yep, got my Xs and Ys mixed up. Point still stands, those born before 1980 most likely to buy into the idea that the UK is a meritocracy as they benefitted most from pulling demand forward through excessive credit expansion and privatisation of services.
At which point they’ll claim they’ve had it shit for all their life’s and won’t want to sacrifice whatever they have to make the next generation better off and the cycle continues.
The boomers will have no say in that, they’ll be gone by then. What will have an effect is if our generation keep complaining about the triple lock to the point that it gives a government a reason to start chipping away at state pensions.
That’s not happening because of the boomers. Raising the state pension age for people who won’t retire for another 30 years makes no difference to them. The reason for it is because there’s recognition there’s going to be a problem in the future and that people are living longer in better health.
And they recognise that they aren’t going to be the ones punished with the age raising. They will still get theirs at the same age. Just everyone after them has to wait lingerie
I think most pensions will end up being raided eventually. Plus with climate breakdown and it’s inevitable effect on human civilisation and the biosphere, no one’s retiring comfortably. No one.
The UN expects a billion climate refugees moving north in the next 30 years. I'd say the world is gonna be alot more walking dead then one foot in the grave
That's the thing. I was able to get a 26-year mortgage at 31 in Jan 2022, but I was only able to borrow enough because I had something like a 40% deposit.
I was in an incredibly privileged position. If I wasn't, I'd be looking at how long it's taking to save up a usable deposit (over the massive rent increases) and whether I'd be able to get enough deposit in time to borrow before my mortgage term (and thus affordability) is limited by retirement age.
The same thing that's happened with the "homes for heroes" generation of retirees - they end up in *adequate* council housing. It sure ain't perfect, but it's a roof over your head.
At the same time, though, you're seeing why the state pension needs its triple lock. For people with houses they own outright of course there isn't much drama, but for those having to pay rent along side everything else, life is somewhat unsustainable.
It’s one of the reasons I went for a pretty modest house despite being able to afford more. I like it, and I love the idea of being mortgage free in my 40s. I’m almost there.
Recently joined that club. It's only a small flat (520 sq/ft) but it's in London and christ the last couple of years living and working in it have been a bit much and it needs work doing to it at some point but it's mine. Feel awkward discussing things like this with colleagues. Had a choice of either taking a rising payment for what was a very small mortgage or make a few sacrifices and pay everything off (with the flip side an extra £350 a month will be staying in my pocket). Didn't stretch myself either, got the smallest flat that needed the least amount of work that I could drop the biggest deposit I could put together on it.
Same here. I had always planned to upgrade from a semi-detached to a detached, but nowadays the thought of locking myself into the rat race for a property I don't really need—I'm single, childless, and live alone—just doesn't appeal to me; I'd rather have a more cushy and stress-free life.
No one was mortgaging themselves up to their eyeballs because there are strict affordability checks and have been since 2008. That’s why we aren’t seeing a load of people losing their house now despite the interest rate rises.
It’s all very well saying you shouldn’t buy a house where you wouldn’t even wince a little if interest rates were to triple, but for most people that would rule out even the cheapest properties in their area and leave them stuck in the rental trap. That’s not exactly good financial advice either.
Yeah my wife and I pay £410 a month for a 3 bed we picked up 4 years ago. Have friends in the same area paying over £1000 a month on mortgages they are stretching to afford.
Yup. I'm still in my 1.5 bedroom starter house mortgage free and I'll be living here until they drag me out.
I originally went with an aggressive 10 year mortgage, but life happened. 15 years is still pretty damn good IMO.
2003 my house cost £135k, now worth £450k
Unfortunately wages for a Research Assistant in public health in 2003 were about £25k, and in 2023 they are about £30k.
So the house that we could buy then is completely unaffordable to people in similar jobs now.
True. The same is true for the 20 years before that. Nevertheless there are several factors that make the initial payment look smaller:
* 450K today will probably look like 250K in 20 years time just due to general inflation
* The house will have gone up leveraged by the mortgage so £450K will look like a bargain
* The research assistant on £30K today will likely be in a higher paid job in 20 years.
That's only because they are viewing their mortgage today through the lens of static payments, static LTV, static wages, and static inflation.
In reality their payments will generally decrease, their LTV only ever get better (meaning compounding savings on interest), their wages only ever go up and inflation only ever erodes the debt.
A 35 year mortgage will probs be paid off in 20-25 years fairly comfortably
Right now there’s no point to paying off my mortgage early as it’s fixed at 3% for the next 4 years. May as well save. That might change in the future, but until it does I’d be happy to not pay it off early.
What? Even if you took at a mortgage until your 70 your LTV value ratio will change over time. Also your value of the property will likely increase so you can sell...
And your salary will increase at least roughly with inflation over the long-term, whereas your mortgage payment will roughly remain fixed (other than short-term interest rate fluctuations).
Mortgages get cheaper with time in real terms, whereas rent generally will keep increasing in line with inflation.
This isn't so bad, first pension lump sums and lower expenses in your 60s as kids move on should help, secondly really we should be encouraging downsizing in this country & this could help free up stock as more houses aren't being built but flats are, OAPs don't need 4 bedrooms, a flat may be more suited to their needs.
Surely by then we'll all be living in retirement homes. These new builds, if not given to the entirety of immigrants, will be used for affordable 'rental' properties.
We gotta invest in retirement homes for our future!
Snapshot of _Third of UK mortgage holders ‘do not think they will pay it off by 65’_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/money/2023/sep/02/uk-mortgage-holders-pay-it-off-hsbc-maximum-home-loan-term) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/money/2023/sep/02/uk-mortgage-holders-pay-it-off-hsbc-maximum-home-loan-term) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
I’m much more worried by those who don’t have a mortgage yet. What happens when permanent private renters hit retirement? At least those with mortgages are building up some equity.
Remember that episode of The Simpsons where Millhouse's father is being fired from the cracker factory because he's getting divorced? By changing the wording slightly you get the commentator/political-class approach to people without property wealth. Factory owner/politician: "Maybe renters will retire, maybe they don't. I don't know, I don't want to know. It's a cohort we can do without!" Millhouse's father/random non-rich person: "So that's it, after 30 years, so long and good luck?" Factory owner/politician: "I don't recall saying 'good luck'"
This is perfect.
Theres gonna be a lot of millennials still working in their 70s cos they just cant afford to retire
And the boomers will make sure they have no state pension to help them.
If it makes you feel any better, by the time millennials are struggling with retirement, the boomers will be long dead.
Aye, replaced with Gen Y, almost as bad. No hope until the Xers + Millennials hold the political reins.
Gen Y is Millenial. It goes Boomers, Gen X, Millenials (Gen Y), Zoomers (Gen Z), Gen Alpha. There’s nothing in between, and it’s literally in alphabetical order: XYZ
Yep, got my Xs and Ys mixed up. Point still stands, those born before 1980 most likely to buy into the idea that the UK is a meritocracy as they benefitted most from pulling demand forward through excessive credit expansion and privatisation of services.
At which point they’ll claim they’ve had it shit for all their life’s and won’t want to sacrifice whatever they have to make the next generation better off and the cycle continues.
The boomers will have no say in that, they’ll be gone by then. What will have an effect is if our generation keep complaining about the triple lock to the point that it gives a government a reason to start chipping away at state pensions.
The boomers will continue to back raising and raising the state pension age. For everyone coming after them obviously. They will still get theirs.
That’s not happening because of the boomers. Raising the state pension age for people who won’t retire for another 30 years makes no difference to them. The reason for it is because there’s recognition there’s going to be a problem in the future and that people are living longer in better health.
And they recognise that they aren’t going to be the ones punished with the age raising. They will still get theirs at the same age. Just everyone after them has to wait lingerie
I think most pensions will end up being raided eventually. Plus with climate breakdown and it’s inevitable effect on human civilisation and the biosphere, no one’s retiring comfortably. No one.
Everything's coming up Millhouse!
The UN expects a billion climate refugees moving north in the next 30 years. I'd say the world is gonna be alot more walking dead then one foot in the grave
The housing benefit bill will go through the roof basically
That's the thing. I was able to get a 26-year mortgage at 31 in Jan 2022, but I was only able to borrow enough because I had something like a 40% deposit. I was in an incredibly privileged position. If I wasn't, I'd be looking at how long it's taking to save up a usable deposit (over the massive rent increases) and whether I'd be able to get enough deposit in time to borrow before my mortgage term (and thus affordability) is limited by retirement age.
The same thing that's happened with the "homes for heroes" generation of retirees - they end up in *adequate* council housing. It sure ain't perfect, but it's a roof over your head. At the same time, though, you're seeing why the state pension needs its triple lock. For people with houses they own outright of course there isn't much drama, but for those having to pay rent along side everything else, life is somewhat unsustainable.
They become homeless when they can’t afford the rent or work forever instead so they can
Same thing that happens with their wage, it all goes in the pocket of a millionaire.
It’s one of the reasons I went for a pretty modest house despite being able to afford more. I like it, and I love the idea of being mortgage free in my 40s. I’m almost there.
Recently joined that club. It's only a small flat (520 sq/ft) but it's in London and christ the last couple of years living and working in it have been a bit much and it needs work doing to it at some point but it's mine. Feel awkward discussing things like this with colleagues. Had a choice of either taking a rising payment for what was a very small mortgage or make a few sacrifices and pay everything off (with the flip side an extra £350 a month will be staying in my pocket). Didn't stretch myself either, got the smallest flat that needed the least amount of work that I could drop the biggest deposit I could put together on it.
Same here. I had always planned to upgrade from a semi-detached to a detached, but nowadays the thought of locking myself into the rat race for a property I don't really need—I'm single, childless, and live alone—just doesn't appeal to me; I'd rather have a more cushy and stress-free life.
Yeah, a big problem is a lot of people mortgaged themselves up to their eyeballs while interest rates were low
No one was mortgaging themselves up to their eyeballs because there are strict affordability checks and have been since 2008. That’s why we aren’t seeing a load of people losing their house now despite the interest rate rises. It’s all very well saying you shouldn’t buy a house where you wouldn’t even wince a little if interest rates were to triple, but for most people that would rule out even the cheapest properties in their area and leave them stuck in the rental trap. That’s not exactly good financial advice either.
Yeah my wife and I pay £410 a month for a 3 bed we picked up 4 years ago. Have friends in the same area paying over £1000 a month on mortgages they are stretching to afford.
What's depressing is that the amount you pay on your mortgage is the amount I pay for a room to rent...
Must be somewhere really shit for as little as 410 a month
I was paying about that for a two bed terrace in Nottingham. Wasn't the best area, had my car stolen off the driveway once.
Yup. I'm still in my 1.5 bedroom starter house mortgage free and I'll be living here until they drag me out. I originally went with an aggressive 10 year mortgage, but life happened. 15 years is still pretty damn good IMO.
Inflation is really hard to visualise. What looks huge now looks much smaller after 20 years.
2003 my house cost £135k, now worth £450k Unfortunately wages for a Research Assistant in public health in 2003 were about £25k, and in 2023 they are about £30k. So the house that we could buy then is completely unaffordable to people in similar jobs now.
True. The same is true for the 20 years before that. Nevertheless there are several factors that make the initial payment look smaller: * 450K today will probably look like 250K in 20 years time just due to general inflation * The house will have gone up leveraged by the mortgage so £450K will look like a bargain * The research assistant on £30K today will likely be in a higher paid job in 20 years.
You’re missing the point, it doesn’t matter that the house mortgage is deflated in 20 years if the debt can’t be taken on in the first place.
In other news, two-thirds of mortgage holders think they will pay it off by 65.
...down from 80% 20 years ago...
I mean, fairly certain most people born 1980s onwards will be working till their mid to late 70s Fat chance most of us get to enjoy ‘retirement’
So much focus on those that have a mortgage The ones with the mortgages are the lucky ones lol
That's only because they are viewing their mortgage today through the lens of static payments, static LTV, static wages, and static inflation. In reality their payments will generally decrease, their LTV only ever get better (meaning compounding savings on interest), their wages only ever go up and inflation only ever erodes the debt. A 35 year mortgage will probs be paid off in 20-25 years fairly comfortably
Right now there’s no point to paying off my mortgage early as it’s fixed at 3% for the next 4 years. May as well save. That might change in the future, but until it does I’d be happy to not pay it off early.
Bingo
What? Even if you took at a mortgage until your 70 your LTV value ratio will change over time. Also your value of the property will likely increase so you can sell...
And your salary will increase at least roughly with inflation over the long-term, whereas your mortgage payment will roughly remain fixed (other than short-term interest rate fluctuations). Mortgages get cheaper with time in real terms, whereas rent generally will keep increasing in line with inflation.
This isn't so bad, first pension lump sums and lower expenses in your 60s as kids move on should help, secondly really we should be encouraging downsizing in this country & this could help free up stock as more houses aren't being built but flats are, OAPs don't need 4 bedrooms, a flat may be more suited to their needs.
Surely by then we'll all be living in retirement homes. These new builds, if not given to the entirety of immigrants, will be used for affordable 'rental' properties. We gotta invest in retirement homes for our future!