Buying a House at 20: What You Should Know

Buying your own home at 20 isn’t most teenagers dream. It wasn’t exactly mine, although I’ve always had a huge interest in home decor and period houses – I just didn’t expect to be buying my own home so early in life. Why the rush, you ask? At 18 I had no clue what I wanted to do with my life, whether I wanted to go to University, what I would want to study – absolutely no clue. I had applied to do History & Politics, but my heart wasn’t in it, so when college ended, I decided to stay put and continue working in my retail weekend job whilst looking for other employment. A few months later, my mum decided to sell up and move 500 miles across the UK. I didn’t want to start afresh in a new town (story of my life!) so I stayed put and decided renting was my only option. Grant and I moved in together and began renting before we soon realised that we needed to buy our own place to secure our financial future and stop wasting money on rent. So I took on two jobs and began saving for a deposit.

It might sound completely unrealistic to buy your first home at 20, but somehow, some way, we did it.  I was 20 and Grant was 23. We were both on minimum wage. People generally assume we’ve had serious financial help from family members and oh, how far from the truth that is!! Neither of us are from wealthy (or anywhere near!) backgrounds. We bought our home through hard work, serious determination, ruthless saving and absolutely zero social life. We spent an entire year saving hard. And by 2011, at a time when the housing market had dropped dramatically and house prices were at an all-time low, we knew that this timing would become our best way to jump onto the property ladder early. And so we did.

Buying a house young is somewhat a controversial subject. I’ve often been made to feel like a crazy person or even stupid for doing so. “Why didn’t you just wait until you had better jobs?” “What’s the point of owning your own home when you’re so young?” “Don’t you want to do other things in your life?” were just a few of the remarks I encountered. It’s been four years since we bought that house at age 20 and I’m not going to lie – buying a house so young on such a crap income, really is tough. There’s lots of negatives and it most definitely isn’t an easy ride or anywhere near that picturesque romantic kind of idea I might have had about buying my first home. These are just my experiences and I’m aware they may differ for different people, but here’s what I think you should know:

Being so young meant we were on a pretty crap income, which of course meant our realistic deposit amount was a low one. I searched high and low for a mortgage lender whom would offer a mortgage with just a 5% deposit. Back in 2011 this was pretty damn hard to find! I did however find one, but having such a low deposit meant having a massively high interest rate. I’m talking nearly 7%(!!!) To couple this, the younger you are when taking out a mortgage, the longer term you can choose. We ended up opting for a 40 year mortgage which would put our monthly repayments as low as possible, but again came with a rise in interest rate.

Ultimately, this meant our monthly mortgage repayments were mainly just paying interest. To put it in perspective for you: After three years and more than £10,000 in repayment costs, we had paid off less than £1000 of our mortgage. Not exactly a great deal!!!

Our joint income was something around £17,000 a year. As you can imagine, our mortgage offer was remarkably low. Fortunately we live in a low house price area, but this still meant options were very limited. I used to go onto rightmove, click “show lowest first” and we would only be able to afford the first three houses that would show up. These were the only houses we looked at and our only options for a potential home. Problem was, these three homes were all in a serious state of dis-repair and in need of some serious home improvement. Buying a ready-made home just wasn’t an option.

I should also mention, being so young and on such a small income means you’re ineligible for any sort of financial help. Had we been 25+ on that same wage, we would have received working tax credits. The money struggle when you’re in your 20s is real and this is a big risk when buying a home so young. When the VAT increase rose back in 2011 making the cost of living higher (baring in mind, we were already on a below average wage) this meant even more cut backs for us and finding it even harder to survive on our petty income.

At 19 I had two jobs, I worked 60 hour weeks, 7 days a week, paying rent and other living costs. At 20 whilst I had ditched the second job, I was making mortgage repayments, whilst budgeting our money to make improvements on our home which was in a serious state of disrepair. It had no central heating, a rotten kitchen and spongy damp floors. My friends? Living in the warmth, partying hard, eating take-outs, spending their pennies on tickets to the Leeds Festival and generally enjoying their early 20s. I felt old. Care-free, I was not. Responsibilities took over and controlled a lot of what we could and couldn’t do. Your home becomes your life. This really is damn true. You live to pay for a home, the bills, the food, the up-keep and you no longer live to simply enjoy life in the same way that you did at 18. Those golden years are cut very very short.

If you dream of starting up your own business one day, travelling the world, getting married or simply owning your own car, at 20 whilst owning your own home, these dreams are far distant dreams. Buying a house is a big deal and if you haven’t rented prior to owning your first home, it may be a bit of a shock just how much money owning a house takes from you. Any dreams you might have at 20, even simple ones are going to have to wait. We took no holidays or mini-breaks and Grant learning to drive came to a complete stand-still as we simply couldn’t afford it.

I’m 24 now, in my second home and I still know almost no-one my age who owns their own home. Had I only started saving now (as most of my friends are now doing) I would be at least a year away from buying a house. The housing market is constantly rising and people are having to save more and more at the same rate to keep the opportunity of buying a reality. This just isn’t a problem for us. 

Since we never had much of a early-20s lifestyle, we didn’t have too much trouble giving it all up. It was just depressing watching others have it. For many people I know now, they struggle with the idea of changing that lifestyle and spending so much less on luxuries and nights out. I know many who have had children before buying a home too and options to cut spending is little. We’re lucky not to have these stresses now, we’re comfortable and our stressful saving days are long gone (or at least for a deposit!).

Despite paying off so little of our mortgage year on year, our money was actually in a safe place and somewhere it would steadily grow without the need to continuously save. As the market rose, our 5% deposit also increased. When we sold our house 3 years later, our deposit had quadrupled (although this was also due to making so many improvements on the house) – it was a great investment at a young age.

We were also able to build other financial commitments on-top without having to worry about what long-term loans will mean when it comes to buying a house. For example, taking a car out on loan may affect your mortgage offer. This just isn’t a worry for us.

As we were bottom of the pay-ladder, there were slightly more opportunities to grow our wage than being at the top with no where to go. Since we took our mortgage out whilst on low-incomes, as pay-rises occurred we slowly had more and more money to live and be less of a slave to bills and the home. Had we waited until we were top of the pay-ladder, we would probably have taken out a mortgage in line with our higher income and opportunities to increase wages might have been slimmer. So in a way, it was a strangely (perhaps debatable) good idea to buy a house at a time when we earned so little.

Since we were both pretty young when starting a mortgage, it means it will be paid off sooner than if we had bought a house at 30 and taken out the same term. This means I won’t (hopefully) be in a nursing home by the time my mortgage is repaid. Always a bonus.

Whilst everyone I know is looking at one/two bed houses dreaming of owning that three bed they’ll need in the near-future, the possibility for us was a far greater reality as the deposit from our first home had grown so much we could begin the property climb. We reaped the rewards and bought a bigger house with a bigger deposit, something which I don’t think would have been possible had we not stepped onto the ladder at 20.

Despite the amount of onlookers who disapprove of our life decisions – I stick by my decisions and regret nothing. I’ve looked back on my early 20s many times and felt really quite sad that I don’t have the same experiences or fun memories that others at 20 have. My adult life began a lot earlier than I would have liked. I’ve worked since I was 17, had two jobs by the time I was 18, rented by 19 and bought a house by 20. It took a lot of hard work on a crap wage feeling like a slave to saving or paying for a home.

The rewards are only obvious as the years go on, when life and money becomes much easier. I get to work less than I did at 19 (THANK GOD) and I have a home that’s big enough to grow into and a deposit on it that we may never have been able to save for otherwise. We’re also no longer on stupidly high interest rates and our financial future is so much more secure, which in short, was the whole idea of buying a house at the age of 20. We got what we wanted, it just wasn’t the easiest ride.

Probably not. Give yourself at least a couple of years left of youth!

If I could have lived at home until I was 23, I would have. But that wasn’t an option, and I’m an avid anti-renter, so yes, I would buy a house at 20 all over again.

Could we have cut the chase and just bought a decent house on a decent wage later in life? 

Perhaps. But I guess we’ll never know!