I make around $120k/year and pay $600 per week for rent, will increase to $650 in 2 months. Me and my partner have around $100k in savings. No debts.
Would it be a good idea to buy a house now?
Ideally, I would like to switch from paying $650 a week for rent to paying $650 a week for mortgage. We live in Brisbane… How much +- would $650 a week represent in loan amount?
What do you guys think?
Thanks!
This is supposed to be the start of a research. Thanks
Do some yourself. Look at what prices are like in suburbs you like. Then use a mortgage calculator to find out how much you will pay. Put at least some effort in.
@bp1984: I just told you how you could help yourself. You have no idea of location, budget etc. There is endless information available on buying a house. There are affordability calculators. There are mortgage brokers. You've tried nothing, and are all out of ideas.
@bp1984: That's the way to get help, insult people.
Every bank has very simple loan calculators and will tell you how much you can borrow and what repayments will be, it's a very good starting place and will answer your basic question of how much you can borrow. Then look at what you want to buy and where. Just be cognisant that you likely will wind up in a worse house than you're renting (unless you're getting screwed on rent) but at least you'll own it and once it's paid off, no more rent.
If you really don't trust banks and don't want to figure out your loan limit yourself, find a mortgage broker. They're just trying to sell you something too but will at least compare a bunch of loan rates.
Also make sure to look up government subsidies/grants in your state, what the taxes and things you'll need to pay (a good way to learn about these is contact a real estate agent and ask for the section 32 on a property, it's provided for every auction), read about the various duties and fees payable. Here's some good links
https://qro.qld.gov.au/property-concessions-grants/first-hom…
https://www.qld.gov.au/housing/buying-owning-home/advice-buy…
https://moneysmart.gov.au/home-loans/buying-a-house
@freefall101: Thanks @freefall101. That's very helpful.
I didn't mean I don't trust banks, I meant that when I search for these kind of things, I will see a lot of ads and clicking them are basically "fill in this form and we'll contact you bla bla bla…" and I don't want to get a call from the bank that will try to sell me anything, at least that's what I thought… but I just found out that a "broker" can help with this. I didn't even know there was such thing.
About the "insulting" part. Who was insulted here, if any? The proplem is that some people have the need to say something, doesn't matter what. It's even worst when they know what you need but they judge you to be too stupid for them to wast their time to answer it, but that's totally worth it to give you a stupid answer. Anyway, your answer was very helpful. Thanks.
https://moneysmart.gov.au/home-loans/mortgage-calculator
Start here. Will.show you how much you can borrow, what your repayments can afford etc.
$650/wk mortgage is pretty aspirational on $100k deposit unless you're looking well out of metro areas
thanks!
Adding to the above $650 could get you in the range of a $700k loan. Would need to factor other up front costs like stamp duty etc. Doesnt account for future rate rises and obv what a lender will give you vs what you can afford to to pay back and still live may be very diff.
Worth reading up on the cost of owning a home too. If you're a first time buyer you may not have thought much on rates, maintenance, strata (if unit/t-house), improvements etc.
I don't even pay $650 a week for my mortgage…. I am still on a low fixed interest rate though. That was on a $615k house with 10% deposit. I am in VIC and in a Regional Area (100kms out of Melbourne).
Dont tell them houses are cheaper in regional areas i like the peace and quiet.
Would it be a good idea to buy a house now?
Time in the market > timing the market.
Buy a house asap. Aim for as low as 5% deposit to maximise borrowing power on properties. Remember to let agent know your pre approval limit so they dont suggest expensive properties.
Join the housing ponzi! Remember to only vote for major parties from now on. The crazy minor parties only care about crashing the housing market and making renters and owners all lose their homes. /s
You need a mortgage broker. Go ask people you work with for one good in your area.
How much +- would $650 a week represent in loan amount?
There's no straight answer to this. There's so many variables to consider. Speak to a mortgage broker.
What do you guys think?
I think it's time to get flood cover, if you in Bris
If you or your partner have been making extra contributions to Super you are able to draw on those to buy a house: https://www.ato.gov.au/individuals/super/withdrawing-and-usi…
You have to submit for a determination before you sign a contract or ATO will not release anything. The amount released per year ($15k) and total ($50k) is capped.
This can be a good way to boost your deposit.
Find yourself a good broker who will chase banks for you. If you have less than 20% deposit you will have to get Lenders Mortgage Insurance. This is almost certain in Brisbane unless we're including Logan and similar far away suburbs. LMI insurance is pricey so the broker will need to go with a bank that does this for $1 or free (St George, for example, exists as a brand under Westpac to do this). Also get the broker to get you as many fees waived as possible (for example, if mortgage packages have a fee, a broker can often get that waived or refunded).
Make sure that the broker is good at communicating with you, once the process starts with them the bank will not talk to you and you have to do everything through this person. A bad broker can make a stressful process more stressful (I had a lot of fun with this in Jan/Feb…).
thank you!
Also, finding a place and buying it before your current lease is up might be a bit hard. You could see with your real estate if they'll do a shorter renewal or month-to-month. The other option is to renew and plan to break. Probably won't be hard to find someone to take the place, but you will owe the real estate some money (typically one week's rent + GST + advertising costs), and you have to pay until the new person's lease kicks in.
I broke my lease and while there was no trouble finding someone to move in, there is still a gap between my leaving and them taking on the lease, which I have to pay for.
Anyway, good luck. The Brisbane market is weird. It hasn't contracted as much as the other capitals because Syd/Melb people kept moving up here.
can't predict the future, but i see house pricing is going to drop since they keep raising the rates and a lot of people can't afford it.
For me, i am holding off and waiting for a dip in the market before i buy another property. that is what i am doing, but you need to live somewhere soon, so if i were you i would weigh your options.
a lot of factors come into place. do you work from home or do you have to go to the cbd? you will get cheaper the further away you move from the city. also being close to a train station is going to cost more. are you looking for a house, apt, etc…
we need more info if we can somewhat help you. so many different unknown scenarios and variables.
yes true… we started to work only from home, we were living in the cbd and close to work, so it was very convenient, we then decided to move a bit further from cbd to save on rent but now we need to go to work once or twice per week and that's very inconvenient, so one thing to consider is the cost of living further from cbd but going to cbd every day, if it comes to that. I don't have any preference for house, apt… I did some calcs using the links provided here and it seems like it will be better to save more for a deposit. Thank you!
Also consider that rents are likely to increase further in Brisbane over 2023/24 and maybe 2025. Your rent increase of 8% is relatively low compared to many rent increases currently happening in brisbane but maybe that is because you have relocated further from the CBD..
yes you're right! I freaked out when I saw that increase but everyone was saying the same as you. The place I used to rent in the CBD was $630 2 years ago when I moved out, it's now listed for $950!!!!! wtf!??
I just broke my lease because I bought a place. My rent was $390 a week, after an increase of $20 last October.
The real estate found a new tenant the first weekend they showed it. The rent was advertised at $500 per week.
Granted mine was probably low for the area because I have been there for a few years, but yikes.
How do you know that rent increase is "relatively low". There are no data on renewed lease rental trends: only on new bonds lodged. Landlords are less likely to ask the same increase on a tenanted property as on a vacant one because they are aware of the costs of losing a tenant. It's in the real estate industry's interests to have everyone believe that rents are going up massively across the board. That isn't the case but the lack of data allows them to push this. OP, Negotiate with your landlord… if they know you are considering leaving a sensible landlord will be prepared to do so. Why not propose a $30 increase?
We have been through this process recently and just have to say, you need to do a ton more research and work to understand buying a place. It's not as simplistic as saying I have $650 to spend per week, where can I buy.
As a starting base, you should consider the following:
You can't get all of these perfect, you may need to sacrifice one or a few to get what you want. Buying a place takes quite a while depending on what you want, you won't be able to simply offer and buy something (in most cases), you are competing silently against quite a few other people in this market.
The best thing you can do, is go to open homes and just see what you could afford currently. Set a $650k limit search on Realestate.com.au and go and check out a few places. It'll help you understand what you actually can afford, and what that looks like.
What do you want to live in (House/TH/Apartment)?
I think figuring this out is important as it will save you time on the weekend. If you're going to look at every house and apartment within an area that is so many opening.
Knowing where to buy will also cut that list down. Not a lot of townhouses around and they tend to cluster in certain suburbs.
One more thought for you OP. Your rent is (going to be) $650 per week. You've also saved $100k. So your weekly repayment should comfortably be $650+whatever you're saving, not just the rent. This is because it is what you can afford now while maintaining your lifestyle.
Looking to spend a bit more on the mortgage now might open up how many places you can afford.
makes sense!
Dont borrow as much as you can thats how people get in trouble. The bank offered me a loan three times what i wanted i said no as i dont want that hanging over me and i dont need a mcmansion.
Terrible advice - they will need a McMansion!
Where will OP store all the bargains they get from OzBargain over the next 25-30 years?
Wow looks like you've really done your research before coming here.