25% of People in Their Early 50s Fear Losing Their Home

Written by Karen Bryan

bungalowI read that around 25% of people in their early 50s are afraid of financial difficulties leading them to lose their homes. The reason cited were a higher risk of redundancies for older workers, difficulty finding work, falling incomes, interest and annuity rates.

The first thing that crossed my mind is that if you are able to pay off your mortgage early, them you are less likely to lose you home because you don’t have any rent or mortgage payments.

With a repayment mortgage you know when your mortgage term ends that the loan is all paid off. Whereas, if you have taken out an interest only mortgage but haven’t ensured that you have the funds to pay off the amount originally borrowed, this could also leave  you vulnerable.

This brings up the buying or renting dilemma. I’m not obsessed by home ownership, but I’ve calculated that in many cases owning your own home is cheaper than paying rent for decades.  Not having to pay housing costs also increases your chances of being able to retire early. The big advantage of renting is the flexibility, e.g. if you find a job in another area you only need to give your landlord notice versus having to sell one property and then buy another.

Many young people cite having to save up a large deposit as one of the main obstacles to getting a mortgage in order to buy a house. There’s also the issue of repayment of student loans eating into young people’s net income.  However, if young people are earning a reasonable salary and are willing to cut down on travel and leisure spending, saving up the deposit to buy a home is achievable. I think that being forced to save for a larger deposit in order to get a mortgage is a good thing, as then you will pay a lot less in interest over the term of your mortgage.

I have the inkling that paying off your mortgage by your early 50s may become a rare occurence in the future, as many people are delaying the age at which they first get on the housing ladder.

In my opinion, many young people are too short term in their financial planning. Being in my mid 50s, I know all too well how quickly time passes.

I believe that young people should enjoy their lives without being shackled down by mortgages and making large payments into a pension scheme from their ealy 20s. However it’s back to the question of can you to have it all? A delay in getting on the housing ladder means that you’re likely to still be paying rent or a mortgage until much later in life, when it may be harder to earn an income from employment.

You can read my tips on money in your 50s.

2 Responses to “25% of People in Their Early 50s Fear Losing Their Home”

  1. The prospect of losing your home are pretty scary and I can totally identify with the fears of that demographic. If you lose it, chances of recovering your financial pace are heavily impended.
    It should be a lesson for young people to start saving early and if they opt to buy a house, work hard to pay off their mortgages before they are in their 50’s.

  2. Simon, it can be much harder to recover from financial mishaps once you’re in your 50s. We certainly found that paying off our mortgage as soon as possible saved us so much money in interest payments over decades.