Subscribe On Itunes
Subscribe On AndroidThis snippet is from one of our previous episodes: When Is It Too Late To Get Into Property?
It’s a question many Australians are quietly asking themselves: “Is it too late for me to buy property?”
In this TPC Gold snippet, Ben and Bryce respond to a heartfelt listener question from Luke—who, at 46, is still renting with his wife and two teenage kids.
With $80K in savings and a growing concern about renting into retirement, Luke wants to know:
👉 Is it worth taking on a $700K mortgage at this stage of life?
👉 Or is it simply too late to start the property journey?
In this honest and practical discussion, Ben and Bryce break down:
- The mindset shift needed when starting later in life
- The real numbers behind a $700K home loan at 46
- Alternatives like downsizing, rentvesting, and seeking support from family
- Why “lifestyle by design” should always be your north star
It’s not about comparing yourself to others—it’s about what’s still possible with a clear plan.
Not Sure What the Right Move Is?
Book a free initial appointment with our Property Wealth Planning team. We’ll help you get clarity on your financial goals, borrowing power, and next best steps.
__________________
If You Enjoyed TPC Gold | Have I Left It Too Late to Buy Property? You Might Also Like:
- Ep 99 | Q&A – Tips For Investing Late In Life, Selling Your Home, Fixing A Downward Portfolio Spiral and More
- Ep 142 | Q&A – Can You Achieve a Passive Income in 3 Years? Are You Too Old?
- Ep 246 | Real Estate 101: Everything from Buying Your First Home to Beginner Investor Tips
Transcript
Bryce Holdaway
“Is it worth having a $700k mortgage at our age?” is the title for this. Here it goes: My wife and I are at a crossroads. We never thought owning a home was worth it until now. And I reckon we’ve missed the boat. For years, my wife and I deliberated over buying a home. We travelled for work in our twenties, so renting was easier while we were on the go. By the time we settled down to have kids, one income made it almost impossible to save for a deposit. Fast forward 15 years and we’re 46 with two teenage kids and still renting. We have around $260,000 in super between us, plus $80,000 in savings. We’re sick of seeing that $3k rent disappear from our banks each month and we’re scared of renting as we age further. So, is it worth having a $700,000 mortgage at our age? And if not, what’s the best way for us to secure our future? That’s from Luke. Good question there, Ben and probably there’d be a bunch of our community who could relate to that.
Ben Kingsley
Yeah, look, it’s a really challenging question, right? Because what’s going on in Luke’s mind is that he’s seeing the stories of the day showing property prices booming and a whole consideration for what his life looks like. So I’m gonna start with a sort of broad concept here and then hopefully we can get down to some number crunching as well, just to give some dialogue around that. My first point here is, don’t worry about what the Joneses are doing because what you and your family need to work out Luke, is what floats your boat? What’s the lifestyle by design that you want to create?
Now, if traveling is a big part of that and not having all of the bells and whistles and all of this, you know, the sort of the spoils of high-end things, don’t worry about that. What I am saying to you, if that is important to you and having a nest egg and a financial future for life, we do need to do something now, right? We do need to basically look at your situation. So how we would go about that is spend a bit of time in terms of writing down your core values. What are the things that are important to you that give you great worth? Not as in material value, but in great worth in terms of make you enjoy life and have happiness around that life. And then start to work from that position in terms of what money do we need to be able to enjoy that?
Because you will come to a potential conclusion that you are right, that rental that you’re paying, that $3,000 if you could substitute that for a mortgage, whereby that’s then going into a longer asset and the reality for you at 46 is you don’t have a 55-year, 60-year retirement target. The funds that you’ve saved up unfortunately won’t carry you through for 30 or 40 years. So you’ve got to make that decision around what that looks like for you. And as a family, what you’re going to do as a family unit to get that. Because what we haven’t learned from you, Luke, is all of those experiences, that amazing travel journey and all the things that you’ve done, which has made your life a rich life in terms of that. Well, now we’re starting to think about the future. So if you can understand those concepts, you can now start to get yourself into a stage where you can start doing some number crunching around what’s possible.
Bryce Holdaway
Yeah, because it’s true that time is the secret sauce. So the longer the better, but 46 is certainly not over the hill. And as you said, if the time horizon for retirement age is like, it’s not 55 or 60. It’s more extended than that. Let’s call it 65. That’s at least 20 years that you have in a cycle going forward. And if it’s at another 10 years, it’s 30 years; that’s still a long time. So the question of “Is it worth having a 700K mortgage at our age?”
As Ben said, it’s not easy to say because we don’t know what your income is. But it’s probably worth thinking that if you’re just having cash in the bank, you’re probably losing money each and every year because of inflation, right? Cash is not returning much, whereas at least if you have a property, it’s giving you a hedge against that inflation. And ultimately, the goal here is to not, it’s not to retire on $2,000 a week, which our book is. The goal is to actually find out the number that you need to actually get what Ben said, the lifestyle by design that you’re chasing. So a couple of things to think about.
It’s not too late at 46 if it’s still your goal to get into the property market. But one of the interesting things that you’ve got here is $80,000 in savings. That is a phenomenal amount of cash to save. Like ask anyone who’s tried to save $20,000. It’s difficult and it requires sacrifice. So you’ve done four times that, which is $80,000. So $80,000 is a lot of money to save, but then when you put it in context with purchasing property, it’s not a lot of money because there’s a fair bit that you need to buy. So what I would suggest is needing to be really realistic about where you can buy, because if you’re renting, chances are you’re probably able to rent in a location that allows you to match your lifestyle. But the big question is, can you actually still buy in the same area for as Ben said, like for like. The amount of rent that you’re paying equals the amount of the mortgage that you’d be paying. So I thought a quick run through of the basics might be helpful here. So if you have, let’s go back to the question, $700,000 that you wanna (use to) buy property.
Just so you have an idea in your mind in this situation how much you need. If we just do a basic 20% deposit, so the bank will lend you 80%. $700,000, 20% (of that) is $140,000. So first of all, you’ll need to kick in $140k, but it doesn’t stop there because you’re also going to have to get the entry cost for property, which is stamp duty and costs. So let’s just do that at 5%, sometimes a little bit more, but 5% because I don’t do quick maths in my head. So $700k, 5% (of that) is $35,000. So if at a 5% deposit, that’s another $35k. So add those two together, the $140k plus the $35k means $175,000. So you need $175,000 to buy the property. But then if you’ve spent all your money to get the property, that’s a dangerous position to be in, so you need a buffer. So if you’re 46 with teenage kids, let’s just say you need a $20,000 buffer. So add all that together, the $175k plus the $20,000 buffer means you need $195,000 to buy a $700,000 property, which clearly is a bit a way from the $80,000. So it’s hard often to reconcile that… that I’ve saved all this money, Ben, but then when you put it into what does it take to buy some real estate, it’s still not enough.
Ben Kingsley
No, it’s not. I think that the challenge that Luke has got is gotta be around what you’ve got to do. It’s absolutely, it’s non-negotiable, right? You’re gonna have to start putting some money away for something. So whether you choose to put that into super or whether you choose to put that into property, it’s really clear that the run rate that you’re on right now is not necessarily gonna build out that nest egg for a comfortable retirement.
So if you looked at your opportunity, you’ve got effectively judgment calls and trade-offs to make here. The trade-off could be that you move to a cheaper location and you effectively then try and buy in that cheaper location. So Bryce has used the classic 20% example. If we do say a $500,000 purchase, 5% cost is $25,000. You put a 10% deposit down, that’s 50 grand. That’s a total of $75,000; you capitalise the interest on lenders mortgage insurance because you’re above the 80% and you’re pretty close. And then you’re in the game. And then all of a sudden your $3,000 is going off to paying off a debt over a 20-to-30-year period. And you’d be pretty comfortable in the view that property prices will increase to a point where you build up a nest egg. Now it may not be your dream home; it may be a property that you buy that you add value to over time.
And you may choose to sell that one to downsize or retire to a regional town or whatever to live out a quieter life. And then put the proceeds into investments and live off that passive income or into super. But the bottom line here is you need to start doing something. The clock is ticking on your retirement target. And the longer you leave it, the more a situation where you see you could be working into your late 60s or early 70s. So we do want you to do something.
You can go and seek advice to get a look at those numbers and those cash flows. Once you do the work on what’s important to you and your wife and the kids. The alternative option, which we haven’t addressed and probably our community saying, how come you haven’t mentioned rentvesting yet? Rentvesting is a model where you live where you wanna live, but ultimately you trap the difference between a very high mortgage and what you’re paying as rent and you turn that into some form of investment in acquiring, say borderless assets and low entry level properties that you can build out cashflow on and build out that wealth over time as well. So you then try and get the best of both worlds. There is an increased risk element to that for some people. But again, the bottom line for me here is you need to get some advice around your situation.
And that needs to be firstly around goals, secondly around cashflow. And that will start to tell you the story in terms of what you’re prepared to trade off, what you’re prepared to give up and sacrifice for the long-term benefit of you and your wife in retirement.
Bryce Holdaway
And look, the last thing I’ll add to that is if you are in a fortunate position where the ‘bank of mum and dad’ is an option for you, well, then that clearly could be another place where you could use that security to buy the $700,000 property, which means that you can keep your cash still available because you’re still servicing the whole debt. And then you can demonstrate that you have some liquidity there. You have a buffer, and you can get on with life and make sure that the family member is comfortable that you can service your debts.
Ben Kingsley
They’re older, aren’t they, Bryce? So that’s the thing. You’ve got to make sure that the bank has an appetite for those people who might be semi-retired to be able to use that equity. But they’re around. So that’s where again, an investment-savvy mortgage broker could do that option shopping for you in terms of choices. And that’s another example of where you can potentially borrow more but have some security of your parents behind that as well. So, a good piece of advice.
