How People Afford Mortgage?

aliash on 08/08/2023 - 01:03

Bit of a background.

The combined income of around 150K after tax. My wife works part-time due to 3 young kids. We have a savings of 150,000 A$ with 0 debt. Want to buy a 3 bedroom house in a low socio-economic suburb of Sydney where the average median price of a home is 800,000 A$. Dont want to get into Units due to Strata overhead.

On average, I am getting quoted on the home loan for around 6.3%. If I take a loan for 600,000 $ that makes monthly repayments of $ 3,724 per month. House ownership includes maintenance, council rates,home insurance, bills etc which is extra

I am trying to do some maths and monitoring my expenses from the last few months. With Groceries, Utility Bills, rent i.e 475$ per week and all the expenses like car rego, swimming lessons for kids, childcare costs etc I end up with very little savings.

I am watching a lot of podcasts these days to understand the science of home ownership vs renting and one of the shows which I really liked is US based show called The Ramsey Show. According to his calculations, we should never buy a home that is more than 25% of our total income. Also, he never recommends getting a 30 years loan. Instead, he advises people to go for 15 year's loan.

Now in my scenario, I cannot even imagine getting a 15-year loan. Even for 30 years, it seems impossible to me. I cannot move out of Sydney due to work. Now as per my understanding, not a lot of people in Sydney have earnings of 150K a year after tax. If I am correct then how the heck people are paying such high repayments?

We are first-home buyers and therefore don't want to miss out on stamp duty. Also, I have a salary sacrificed around 20K which I can withdraw from my super under FHSS scheme so not inclined in investing in other states.

Should I just forget about buying a house and live all my life in a rented place? Sorry for sounding too naive but I need suggestions from a wider audience as I don't have many friends in Australia who can assist me with my queries.

Financial Home Loan Loan

Comments

      • Danstar on 09/08/2023 - 07:47

        That works too

  • Sinnerator on 08/08/2023 - 08:37
    +1

    they just wait for rates to drop to zero and then borrow big
    borrow now think later

  • lgacb08 on 08/08/2023 - 08:46
    +4

    First rule of thumb is to stop listening to some guy in the US giving financial advice as people have said it earlier. Then starts breaking down your monthly expenses to cut what you have to. In the first 5 years it could tough but will be more manageable if youre disciplined enough.

    • SPCTRE on 09/08/2023 - 22:42
      +1

      Some of the finance advice saving strategy and mentality on the Ramsey Show are useful but OP does need to aware the US housing market and banking system work differently from here.
      From OP description of his household finances he got options to make it work.
      Comes down to how picky he is regarding area and dwelling type.

  • Euphemistic on 08/08/2023 - 08:47
    +2

    Just because the loan term doesn’t mean you are locked in for 30 years. You can pay it off quicker (and you should plan to). You can still move house. You pay out the loan and purchase a new home with a new mortgage.

    Paying out a loan early may cost you a little bit, depends on the loan terms but it’s not a massive fee like stamp duty. Paying down your loan faster doesn’t usually cost anything and just saves interest. Eg our loan has 100% offset in our accounts so we pay no interest for now but can redraw if necessary and pay a little interest on whatever we use.

  • CyberMurning on 08/08/2023 - 08:55

    just go to mortgage broker or direct to bank and tell the truth about all your incomes and expenses.
    if they can give you loan means you can afford it. thats it. full stop. you can.
    free financial adviser i say.

    • ssfps on 11/08/2023 - 00:31

      Do you also get salary negotiation advice from your company's HR reps?

  • CyberMurning on 08/08/2023 - 08:57
    +4

    and yeah be happy not everyone can earn 150k here. that is ALOT (total household) again, you ARE lucky.
    just a bit more budgeting and less wasting money on ozb and you will be fine.
    again, you have better income than others just read from the top so many said that.. you have to believe us.. geee…. even me im jealous!

  • JIMB0 on 08/08/2023 - 09:23
    +1

    Just do it.

  • Duckie2hh on 08/08/2023 - 09:30
    +1

    My situation is similar to OPs. We don't have any issues with day to day. I think re-look at your spending habits.

  • jellykingdom on 08/08/2023 - 09:48
    +5

    Can i make a suggestion? Its easy to get all drawn into the whole "outgoings = rego + phone + school + etc + etc". While you're doing these basic calculations, save yourself the hassle and just look at your net cash position. I.e Jan 1st 2022 = $100k savings, Jan 1st 2023 = $140k savings or whatever, therefore we earned $150k (minus tax) and we saved $40k. Just throwing some numbers out there

    I personally find its a waste of effort to look at the individual numbers in that much detail and you always end up missing something anyway. I mean its good to know what you're spending money on that maybe excessive or luxury items, but life happens and sometimes you need to buy tyres or a new couch etc and its really hard to guesstimate that.

    • bokka on 08/08/2023 - 21:55

      Agree with this. Better to just calculate how much you saved rather than work it the other way trying to build up expenditure.

  • CurlCurl on 08/08/2023 - 09:49

    Don't know where you are looking but houses in the Penrith local Government area start around $650,000

  • djsweet on 08/08/2023 - 09:58

    Yeah idk… we have a combined income less than yours, but still higher than most people I know.. Don't know how anyone affords it really.
    When we buy (which we will soon hopefully), we will be spending approximately 40% of our income on home loan repayments. And that is going to be around a 50% increase on what we are paying at the moment for rent. But at least we will build some equity I guess..

    • lancesta on 12/08/2023 - 09:16

      Yeah and unless I'm wrong, if you assume interest rates stay the same, repayments stay the same.

      So like over 30 years rents will likely increase by more than 50% but you'll still be effectively paying the same amount. In that same time your wage will most likely increase too allowing you to pay it off quicker. So it's like you've got a locked in rental price.

      Know the interest rate assumption isn't great but to be fair over 30 years it could do anything.

  • aliash on 08/08/2023 - 09:59
    +10

    Thank you everyone for your valuable comments. I definitely need to do some budgeting.

  • DingoBilly on 08/08/2023 - 10:01
    +6

    You 100% have issues with your spending at the moment.

    I earn at least $50k less but can easily afford the repayments you're suggesting. Suggests your spending is way too much.

  • ForkSnorter on 08/08/2023 - 10:06
    +1

    The solution is: Don't buy in Sydney. It's one of the most expensive cities in the world.

  • JustinFR on 08/08/2023 - 10:13
    -3

    One idea: Reflect on your circle of family and friends and identify who may have savings that they could park in your offset account in exchange for a slightly higher rate (or the same given it would be tax free earnings) that you would pay them instead of the bank. The vast majority of people are not earning the highest interest rates possible on savings accounts and with the significantly higher interest rates for borrowing than saving that leaves a gap of roughly 1-3% where you can save on your home loan depending on your negotiation skills, willingness of those around you and the respective interest rates of both parties. If you were able to "crowdfund" some money to put against the loan, I'd encourage you to write a simple contract stating terms with whichever parties get involved to avoid confusion and conflict.

    • Cluster on 08/08/2023 - 16:27
      +2

      If you lend money to family or friends you should consider it a gift. It's a bonus if they pay it back.

      • Some Human on 08/08/2023 - 17:37

        True story. Still waiting for the $600 I loaned my sister 12 years ago.

  • garetz on 08/08/2023 - 10:20
    +1

    Since the early 2000s, most people buy properties in other states, build equity over time, sell those properties then buy in sydney.

    If you think median property prices will increase in the area you are buying then you will get a big bump in equity, so that's a good step on the property ladder.

    The equity is what you want, so if you cannot create savings, you can equate that to the created equity instead.

    The best loan imo is 25 years with 100% offset. 15 years will have crazy high principal + interest monthly repayments, just keep that excess money in the offset and it should reduce your loan length by a good 5 years over the life of the loan.

  • ihbh on 08/08/2023 - 10:39
    +1

    Most of the houses north of median prices in Sydney are bought by older people with a lot of equity in their existing home trading up or sideways. Or couples with very high incomes. I know of a specialist doctor and GP in their 30s without any kids at the moment trying to buy their home in Sydney North/North West and missing out for many months now.

  • Seraphin7 on 08/08/2023 - 11:11
    +1

    Just wondering … how do you earn $3k per week after tax, have rent of $475, and then say you have no savings available after "all the other expenses"? I mean that's a very high cost base you're running there.

    If you really want the property you're referring to, you will need to make some sacrifices somewhere else. It's an unpopular opinion, but you can't have "all the trimmings" and afford (relatively) expensive property. Something has to give somewhere (the typical places to look are eating out/take away, phone/internet plans, streaming services, use of taxis/ubers, and just generally "expensive tastes").

    • Baghern on 12/08/2023 - 17:33

      this looks like a reddit post I saw recently

      hes 40, new migrant here for 4 years.

      So he's doing pretty good to have savings of $150k

      Like the reddit post its a shit post, with little detail, that 99% of us can't relate to

  • Porker on 08/08/2023 - 11:18

    Things to consider OP:

    • Are you sure you can even borrow the mentioned $600,000? The amount that banks allow you to borrow is not simply 80% or 90% (LMI) of the purchase price. They account for your ability to repay the loan too, and while your day-to-day calculations may show that you can pay it back, the banks appoint a fixed debt to your kid/s. eg. Simply having a child might drop your income amount by $30,000 - in my case, I bought recently and banks knocked off $60,000 from my and my wife's joint family income.

    • Perhaps consider an investment property instead? Yes, you won't have a place of your own, but if you can improve on your capital and/or income, then that may assist in terms of borrowing less from the bank.

  • TheBilly on 08/08/2023 - 12:11
    +6

    First things first is Dave Ramsey is an American who understand a completely different property market. You can't take his advice and apply it to the Australian property market. In America you can buy a house for $150k which is why they give the advice they give.

    • Drakesy on 08/08/2023 - 12:20
      +3

      *and lock yourself into a 2% loan for the life of the property, effectively the bank pays you to own a house.

  • MarsTitan on 08/08/2023 - 12:46
    +4

    Buy what you can afford now — block the noise of rent vs buy. Worst come to worse you can sell it even at a loss.

    Nothing ventured, nothing gained.

    Buy an old house (odd, non-subdividable plot so you don't compete with developers), which other people are just paying for land price. You get a house for free (albeit old as a bonus). You will need to do all the maintenance (apart from plumbing/electrical/gas) yourself — which is not hard with youtube nowadays.

  • onetwothreefour on 08/08/2023 - 12:47

    I am trying to do some maths and monitoring my expenses from the last few months. With Groceries, Utility Bills, rent i.e 475$ per week and all the expenses like car rego, swimming lessons for kids, childcare costs etc I end up with very little savings.

    How much is very little to you? You say you have $150k in savings so you're obviously doing something right.

    • pharkurnell on 08/08/2023 - 12:57
      +1

      Wish I had $150 in savings let alone 150k….

      • idonotknowwhy on 08/08/2023 - 13:26

        It's harder to get 150k in savings than 150k (before-tax) income.

    • singlemalt72 on 09/08/2023 - 22:04

      probably paying less in rent than a potential mortgage - herein lies the difference.
      Monthly mortgage payment $3724 = $859 per week - there goes the savings!

  • foxmulder on 08/08/2023 - 12:56
    +1

    While you still renting, make sure that saving account gets the highest possible interest. Cut down any unnecessary expenses. Don't know if first home saver account still a thing, check it out.

    • idonotknowwhy on 08/08/2023 - 13:34

      What are you talking about? OP can easily own a home with 150k deposit and 150k combined income if they lower the standards a bit.
      I know people who bought recently with less.

  • stumbows on 08/08/2023 - 13:07
    +7

    Hey mate, I am you after the purchase is made. What I mean by that is almost identical situation. $150k after tax, wife working part time. $600k loan. Literally just refinanced this week too. We're not really feeling the pinch too hard. Living comfortably and could easily make more cutbacks if needed. Even booking a holiday as we speak for later in the year. I definitely think you can make it work. Just dive into your current spending and start to categorise everything and rate it from essential to luxury. We come away with about $1500-2k savings per month. Could be a lot more if we didn't eat out as much or do fun activities but we're happy with that level of saving. We just put it all in a 100% offset account so it's virtually the same as paying down the loan faster. This helps reduce interest and like you said there is the expectation that the value of the property will grow only giving you more equity to upgrade in the future.

  • idonotknowwhy on 08/08/2023 - 13:35
    +1

    Also, he never recommends getting a 30 years loan. Instead, he advises people to go for 15 year's loan.

    Or get the 30 year loan / and pay it off / load up an offset account as though it were a 15 year when you can afford to.

  • rambutann on 08/08/2023 - 13:42
    +1

    Dont want to get into Units due to Strata overhead.

    I'd re-assess your view on this.
    I've just moved from a unit to a house.
    Unit strata covered all building insurance, gardener, drain cleaning, gutter cleaning + a general maintenance fund.
    House insurance cost is much more expensive than what the strata costs were.

  • damianjp on 08/08/2023 - 13:49
    +1

    Hi mate, myself and my wife have almost 250k combined. 2 young kids. We went for a 600k apartment 70km North of Sydney (Central Coast)
    We can afford the mortage comfortably and have plently of buffer and cash left to actually enjoy life and not be burdened by a loan on the limit of our borrowing capacity.
    In a few years we may look at getting a house.

    i would NEVER dream of getting a 800k mortage on 150k that's insane. ZERO buffer.

    Also, i would never compare AUS mortages to the US; the loans are structured completely differently. ie they do FIXED rate mortages on 10/15/20/30 years.

    Hope this helps,

    • Lukas on 08/08/2023 - 14:04
      +1

      To clarify OP is 150k after tax, so likely ~210-220k pre tax, your 250k pre tax will likely be 150-200k post as well. If you're 250k after tax your'e in a very different bracket

  • surg3on on 08/08/2023 - 14:01
    +4

    do NOT listen to US based advice on home loans. Their loan structures are vastly different (very long fixed) as well as the tax treatment (not to mention spending on other required items such as education and healthcare).

    • Cluster on 08/08/2023 - 16:29
      +1

      Indeed. Americans can lock in fixed interest rates for 30 years. We cannot. They can claim interest paid on tax. We cannot. Their housing market experience is quite different to ours, and Dave Ramsey is an extremist who advocates for zero debt. He grudgingly agrees people should have minimal home loans as otherwise no one would ever listen to his puritan advice.

  • kalithreaver on 08/08/2023 - 14:20

    you make a lot of money after tax, it just sounds like you have way too many expenses.

  • Aerith-Waifu on 08/08/2023 - 14:40
    +1

    Definitely looking to cut your spending a bit, stop buying too much Lego to start with. LOL

  • jv on 08/08/2023 - 15:31
    +1

    How People Afford Mortgage?

    work

    • smartazz104 on 09/08/2023 - 13:52

      OP says they clear 150K after tax, clearly there is something else at play.

      • jv on 09/08/2023 - 13:54

        clearly there is something else at play.

        drugs?

  • ski100 on 08/08/2023 - 15:43

    FHSS is Australia wide. Each person can stick $15k in each tax year upto $50k per person. A good way of topping up your savings for your deposit.

    • xabiso on 09/08/2023 - 22:54

      OP has to live in the property after purchasing so OP's choice of wanting to live in Sydney binds him to NSW:
      "You intend to occupy the property you buy as soon as practicable and for at least 6 months within the first 12 months you own it after it's practical to move in."

  • Nitrollparty on 08/08/2023 - 15:48
    +1

    must be a tuff life living off 150k after tax…jeez poor you

    • randomvis on 08/08/2023 - 16:11
      +2

      Just a hunch— you don't have a wife or three kids do you?

      • Ghost47 on 08/08/2023 - 16:22

        A wife and three kids costs $150k after tax a year?

        • trapper on 09/08/2023 - 09:30
          +2

          A wife and three kids costs all the money.

          ie Get a $10k pay rise, now it costs $10k more… :D

      • onetwothreefour on 08/08/2023 - 16:45
        +4

        I have 4 kids and a wife, our household income is a little less than the OP. It's really easy to save money.

        • randomvis on 08/08/2023 - 16:52
          -1

          I'm making a point about tall poppy syndrome.

          But, if you want to berate people trying to make a decent life for their family, go ahead and join the bitter-hearted.

          "realy easy"

          I'm sure it is, but OP might not want your life/lifestyle.

          • onetwothreefour on 08/08/2023 - 18:11
            +2

            @randomvis: I didn't berate the OP for trying to make a decent life for their family, where on earth did you get that from?

            but OP might not want your life/lifestyle

            Maybe not, but then if that's true they shouldn't be asking how people worse off than them can afford a mortgage.

            • jv on 09/08/2023 - 13:55

              @onetwothreefour:

              where on earth did you get that from?

              check their username for a clue…

      • smartazz104 on 09/08/2023 - 13:55

        With all the condom deals that get posted here, you must be doing something wrong to end up with 3 kids.

  • meumax on 08/08/2023 - 16:09
    +8

    Holy moly, just realised it's $150k AFTER tax. That's roughly what we were on when we borrowed $1M which more than the entire value of the property you're considering.

    You have $12.5k/month to spend and save. You say the repayment on your piddly $600k loan will only be $3,724. That still leaves you around $9k free cash flow per month to live on and save. $9k/month is HUGE. The average person can only dream of earning that much per month. You're way above average. Seriously, just go for it.

    And don't listen property advice from Dave Ramsey. He is giving advice for a US audience which has very little applicability to the Australian property market. Listen instead to local experts like our own Scott Pape of The Barefoot Investor fame or any of the countless other more relevant Australian based advisors out there.

    • Baghern on 12/08/2023 - 17:38

      This post sounds like a reddit post I saw recently. Just like it, it provided very little information, except in responding comments

      Just like reddit the lack of information meant there were wild comments, attempts to help everywhere

      If this is the same person, he's a migrant, 40m, been here 4 years went from 10k, to 150k savings.

  • freekay on 08/08/2023 - 16:42
    +2

    Firstly, Dave Ramsey has some good fundamentals on how to get out of bad debt. i.e. if you are bad with money, you are bad with self-regulation. So it's probably worth following his advice. However if you're good with money, his advice loses a lot of value. That and it's skewed to US, which is very different to Australian audiences.

    Secondly, my wife and I were in similar scenario - decent income, big savings, but just couldn't crack Sydney market. So we decided to use our savings to invest and just rented where we wanted to live in Sydney. We explored a range of options including commercial property, shares, managed funds, residential properties. We settled on shares and residential property as we had the most "experience" with those two assets. We opened up a share trading account and we also purchased a cheaper investment property on the Gold Coast. House was positively geared, and the rent we received exceeded our interest payments on the loan and made a significant contribution to our take-home income. We had also planned to make the house our retirement location, as we would have it paid off by the time we were ready to retire.

    COVID happened and our property value shot up, so we ran some numbers and were now in a position to buy in Sydney. We ended up selling for a tidy profit and bought a nice place in Sydney, for a slightly larger loan size than our investment property. Shares made a nice gain as well, but nowhere the size of the property.

    TLDR - don't let your savings sit stagnant. Do research, invest and with a bit of luck, you could find yourself in a similar position.

  • lonewolf on 08/08/2023 - 16:47

    There are a lot of rich people out there, and people who keep buying homes will find it easier to borrow more and more.

  • PissLUR on 08/08/2023 - 17:14

    I cannot move out of Sydney due to work.

    Nothing Is Impossible

  • Dack Smith on 08/08/2023 - 18:02

    If I earned that much I wouldn’t have a problem with my mortgage, unless I wanted to be a dumbass and overcommit knowing interest rates would not stay super low forever.

    It always amazes me how people justify their salaries when they would earn more than twice to thousand times the average normal persons wage.

    Then on high wages they can’t seem to make their mortgage work

    So how do the poor try to make their mortgages work, if these overpaid over justified “workers” can’t

    Huh……

    I guess these high wage earners drive society by provide us the necessary food and healthcare

    “Essential” lol

  • WreckTangle on 08/08/2023 - 18:13
    -1

    You need to try hard to buy into the Sydney market if you’re planning to be here for awhile. Yes it will be tough for the first couple of years but remember that your mortgage payments are mostly fixed (albeit at a slight variation due to interest rates ) and over time the proportion you spend on a mortgage will reduce compared to your income. Also relatively inflation proof for a similar reason, whereas rent will continue to rise every year.. Before I bought a home in Sydney I was frustrated that I was missing out on the local market, however I Now have peace of mind that at least I’m not going to be priced out of the city I live in.

    • zoltanc on 08/08/2023 - 18:54
      +1

      I second this. The first few years of a mortgage are the hardest, but then inflation works in your favour.

      If it is a stretch to buy a property now, it will be the same in 5-10 years time. Sure, in 5-10 years time you'll be earning more, but buying a property will cost more too.

  • Kabal on 08/08/2023 - 18:14
    +1

    You should really be able to make that work with 150k AFTER tax lol

  • od810 on 08/08/2023 - 18:45
    +1

    Mortgage structure in the US is different. For australia, there is no difference between 15y loan vs 30y loan if the extra repayment you meant to pay for the 15y loan is put in offset account.

    The Us mindset is different. I have some colleagues in the US making ~500k in california and they are not willing to buy houses that over 1.5m. they tend to stick with price:income of about 3, whereas australia is on aboit 7-10.

    I guess they have more expense over there, for example land tax will set u back around 10-15k a year.

    • FlyingMiffy on 08/08/2023 - 19:41
      +2

      Dont forget interest on mortgages is tax deductible in the US as well. The amount they pay is alot less than the raw numbers.

      • ribze1 on 08/08/2023 - 19:57
        +1

        Yep another reason why OP shouldn't be listening to US podcasts about property.

  • Lunarboogie on 08/08/2023 - 19:00
    +3

    OP has ample head room to buy. Don't over think and just throw yourself into it. Delay is what costs you most.

    2 points. First, all you need in the early years is to get by. While you can't see it, your equity is growing and probably faster than you can do it on your own. That enforced savings will eventually come your way.

    Lastly, we're in the midst of an inflationary environment and likely will be for some time. This erodes debt, meaning there's no better time to get a loan than now. While it erodes savings, meaning this is the worse time to have money in the bank. It's literally going backwards.

    The fundamentals are on your side. Just do it.

  • ribze1 on 08/08/2023 - 19:56
    +1

    That income and that loan size should not be a problem, even in Sydney.

  • Brucegonemad on 08/08/2023 - 19:58

    One thing is for sure listening to Dave Ramsey will NOT make you wealthy.

    Don't get me wrong, the vast majority of people (especially Americans) should listen to him as they have no idea how to save and just live on credit cards…but if your aim is to get wealthy his advice will not cut it.

  • Trying2SaveABuck on 08/08/2023 - 19:58

    How People Afford Mortgage?

    they live within their means

    usually means ignoring the media esp the (profanity) at ABC and work hard and save a decent deposit

  • The General on 08/08/2023 - 19:58

    You will have to do it tough* for a year or two. If you are struggling, then perhaps you could switch to interest only on you home loan.

    After a couple of years, hope that interest rates come down and that your combined income will increase helping ends meet.

    *See above for how to get through the tough years.

  • drprox on 08/08/2023 - 20:18

    Those numbers look fine to me. No way I had more left over when I bought that's for sure!

  • drprox on 08/08/2023 - 20:19
    +1

    Oh and you're wrong. There would be absolutely loads of two income couples clearing $150k pa in Sydney.

  • Farrba on 08/08/2023 - 20:27
    +1

    net monthly pay of $12500 is more than enough to pay $4k monthly repayment. you still have 8k per month for food insurance etc.

    this post is prolly more on disappointment that at $4k monthly, the house is far from cbd and in a maybe not posh suburb?

  • Ghost47 on 08/08/2023 - 20:34

    Three jobs per person or rent out a room, that normally helps.

  • fredk1000 on 08/08/2023 - 21:05

    I think you can afford it.
    10yrs from now, when you decide you want to buy again, the house most likely doubled or more. Then you cannot afford it.

  • Hugh G Rection on 08/08/2023 - 21:08
    -6

    that loan is a rip off, you will end up paying a million after 30 years.

    i just buy it like my cars, i buy it outright. forget loans.

    • mandelbrot on 08/08/2023 - 22:24
      +1

      Worst. Advice. Ever.

      • Hugh G Rection on 09/08/2023 - 07:24
        -4

        you like being rip offed and overpay for things? not for me. i buy it out right.

        • us3rnam3tak3n on 11/08/2023 - 11:29
          +1

          What if while you're accumulating the funds to buy outright the value of the property outperforms your growth assets?

          • Hugh G Rection on 11/08/2023 - 11:41
            -1

            @us3rnam3tak3n: you're looking at short term, i plan on never selling. my children will inherit and live there.

            anways, they are doing fine. i bought my house 10 years ago, stats are showing 50% gain, so i think they are doing ok. lol

  • rumblytangara on 08/08/2023 - 21:21

    Quick comment here: forget about listening to American podcasts on this subject. My Sydney apartment cost about the same as my friend's 5 bedroom house in Connecticut (easy weekend drive to NYC) which also has enough space for a standalone solar farm.

    Rentals are a feasible source of income in many cities. Versus the 1-3% yields in Sydney.

    Sydney house prices are pretty similar to San Francisco, otherwise, it's incomparable to 99% of the US. So don't use advice for Americans.

  • ScottyDont on 08/08/2023 - 21:26

    Talk to the bank, We went with 25k savings and an idea of what we wanted to achieve. We asked heaps of questions about the process and what they were looking for. 6 months later we were approved for a 600k build loan with a little LMI which is more than offset by the increased equity since signing

  • mandelbrot on 08/08/2023 - 21:44
    -5

    Quick question - are you Aboriginal or Torres Strait Islander (or identify as one)? If so, there's a deal for you!

    • aliash on 08/08/2023 - 23:24

      no i am not.

    • morse on 11/08/2023 - 08:36

      Can you share the deal for anyone who is Aboriginal or Torres Strait Islander?

        • morse on 11/08/2023 - 09:18

          Looks cool for low income earners, but in OPs case if they were Indigenous their gross income would mean that the variable interest rate would be 6.14%

          • mandelbrot on 11/08/2023 - 09:21

            @morse: I was only joking. That was a deal that got posted and deleted last week. It's a great deal if you are Aboriginal and meet the criteria!

        • leelemon on 12/08/2023 - 02:39
          +2

          As someone who is Aboriginal and did apply for that loan a few years, I can safety say that it is not an easy process. Ended up going with a bank..

  • Pdsalter on 08/08/2023 - 21:47
    -3

    800k in Sydney for a 3 Bedroom house is very cheap - too cheap
    Don’t buy in a low-socioeconomic area in Sydney
    Yuck
    You will be miles from anything / transport/ entertainment / work / life etc
    Close to crime and bogans

    You earn plenty of money buy somewhere decent

    • greatlamp on 09/08/2023 - 16:07

      OP has their priorities backward. Their responsibility needs to be providing future for their children in a safe area with good schools. Capital gains on the family home a tax free and inflation is higher than mortgage rates.

      OP needs to be spending the most they can afford, not the smallest amount they can get away with.

      • meumax on 10/08/2023 - 13:45
        +2

        You either buy in the expensive areas and send the kids to public school knowing only rich people can afford to live there and hence the kids at the public school are rich.

        Or you buy in the lower socio-economic area but spend the money to send your kids to private school knowing the school fees mean the kids there are the rich kids of the area.

        Either way, your choice of school is gate kept by money to ensure your kids only mingle with the kids of other rich parents.

  • hasher22 on 09/08/2023 - 01:08
    +3

    You're on $230,000 combined before tax and your monthly take home pay is roughly $12,500.

    You never stated in your post that you're struggling or have any financial worries, this to me, shows that you favour money in your account rather than securing a place of your own for your partner and kids to live in. If you're worried about $3,724 per month out of your $12,500 per month income, then you need to change your mindset about a mortgage and money and what benefits owning home vs renting has. You're definitely upper class and earning more than 90% of Australians.

    You want to be exempt from stamp duty, well you got your budget right at 800k, but for 800k you'll be looking at older homes and town houses either west sydney from Parramatta outwards, south west or outer west. You will not find something close to the CBD, not even inner west.

    Look at the realestate.com.au map and my filters: 800k, house, minimum 3 beds: https://ibb.co/JRb2BPj

    Out of all the people, it's you that shouldn't have a problem with the mortgage.

    You need to come to terms with current socioeconomics in Australia, not listen to American pod casts cause their policies, laws, culture and real estate is vastly different from state to state than in Australia, so you're already convinced with the wrong information.

  • Jugganautx on 09/08/2023 - 04:45

    I bought in 2019 for $240,000 1969 100m2 house on a 780m2 block with a single income of $60,000.

    Saved up a deposit of $70,000 with a loan total of $191,000.

    It is now down to $57,000 and $348 per week mortgage, and i chuck on an extra $300 a week extra. All the whilst paying $160 a week for child support.

    If you want to pay off your house you'll either want to cut impulse spending on stuff you'll never use or need. or work the overtime to make up for it.

    Also relocate and stop paying 1mill for a 3 bedroom house

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