Hey OzBargainers,
Planning to take on a large mortgage ($1.69m / 53% of net income) and currently working on the family budget to make sure this can be done without too many issues. Noting that my circumstances are way better than many Australians out there doing it really tough, I would still appreciate other experience and wisdom in such matters.
At the moment we spend quite a bit, as we aren't paying a mortgage, and I'm trying to see where we can reasonably cut back.
Situation is as follows:
- Family - 2 Adults - 3 Kids (at public schools and under all under 11yrs)
- Income (net): $9100/fn ($236,600/yr)
- Mortgage (proposed) $4850/fn ($126,100/yr)
- Remainder (for saving / spending): $4250/fn ($110,500/yr)
Given we are spending more than $4250/fn now, do 5-people families currently working to a budget think this is a workable number for their circumstances (my feelings are this works ok). We like the odd holiday, driving locally and wouldn't mind a simple OS holiday every few years.
For reference I calculate our current expenditure to be approximately as follows:
- Supermarket Food: $630/fn (almost no eating out)
- Car Costs (petrol,parking,basic services): $480/fn
- Insurances (house,car,health etc): $426/fn
- Utilities (gas,elec,internet,phones): $250/fn
- Medical: $150/fn
- School: $70/fn
- Pets: $70/fn
- Holidays: $230/fn
- Kids Care (before/afterschool): $240/fn
- Coffee: $60/fn
- Sub Total: $2560/fn
- Other (clothes, household items, presents etc): $1820/fn
I feel this other category at $1820/fn can take some serious trimming without us suffering too much, but wanted to get a gauge on what others are spending in similar circumstances.
For those out there, how does this compare with similar composition families? Are my numbers way out with yours? Does this other category sound excessive?
Finally does a mortgage @ 53% of net income compare reasonably with others out there in similar situations?
Sorry OP, you'll struggle to find a bank willing to lend you that much.
My household net income is close to yours and the bank doesn't want to lend us more than $1 mill which i think is still ridiculously high (no dependents)
But hey, if you want to spend your entire life paying off a mortgage and possibly end up retiring with debt then go ahead.
But to me you're not earning enough to warrant that level of debt, especially with 2 kids. Throwing away $1.5 million in interest repayments over the life of the loan sounds horrendous. Spend another couple of years increasing your deposit and reducing your loan amount, especially in a cooling market.