CrozierFamily Posted January 27, 2013 Share Posted January 27, 2013 Hi Folks Sorry, another question! I have been working from an assumption that the upper limit for a salary multiple on mortgage lending would be around 4X salary. That is what it is here in UK, can someone confirm for me if that is the case? I found a post from 2008 on this, but cant find any recent updates and the websites are classically unclear! Cheers, Andrew Quote Link to comment Share on other sites More sharing options...
Rupert Posted January 27, 2013 Share Posted January 27, 2013 I think that might be about right, however I always look at estimated repayments when I consider what to borrow, not salary multiples. If I borrowed 4X salary the repayments are way, way over what I would like to pay, in fact would be half my take home pay. I like this quick calculator, it always defaults to 7.5% interest which is a touch high so make sur eyou change that if you have a look. http://www.yourmortgage.com.au/calculators/repay_basic/ Quote Link to comment Share on other sites More sharing options...
CrozierFamily Posted January 27, 2013 Author Share Posted January 27, 2013 I think that might be about right, however I always look at estimated repayments when I consider what to borrow, not salary multiples. If I borrowed 4X salary the repayments are way, way over what I would like to pay, in fact would be half my take home pay. I like this quick calculator, it always defaults to 7.5% interest which is a touch high so make sur eyou change that if you have a look. http://www.yourmortgage.com.au/calculators/repay_basic/ Thanks, I dont necessarily want to borrow that much, but it is good to know what your max limit is. I appreciate the link. Quote Link to comment Share on other sites More sharing options...
wolvesaussie Posted February 4, 2013 Share Posted February 4, 2013 my mum works as a home loan officer she says it doesn't work like that anymore. they do this affordability thing and look at your outgoings etc. so a young couple with no kids for example could loan a lot more than a couple with two kids. what they would loan seems crazy to me I think a return to 3.5 x income would bring house prices down Quote Link to comment Share on other sites More sharing options...
devon67 Posted February 4, 2013 Share Posted February 4, 2013 it doesnt work that way here in oz, they look at your earnings, outgoings etc then see what deposit you have and what risk you are, if you are high risk you pay mortgage insurance to the bank a one off payment to cover the bank if you mess up pop into a bank and get more info if you earn enough its about what you can afford to pay, this hopefully stops people buying houses they cant afford to buy i could buy a house for $798000 but i wouldnt we are looking at $350K which the bank is happy with and can see we can afford it there are also of ways you can mix and match your mortgage so you can over pay without being charged hope this is ok Quote Link to comment Share on other sites More sharing options...
NickyNook Posted February 4, 2013 Share Posted February 4, 2013 Above two posts are correct. They look at the income available to service the loan once existing commitments are met. Two people could be on the same income - the one with five kids, a car loan and a maxed-out credit card will be offered far less than the single person with no dependents or current debt. Quote Link to comment Share on other sites More sharing options...
newjez Posted February 7, 2013 Share Posted February 7, 2013 Some lenders will also lend more than others, but at not as attractive a rate. You may also find that overtime, part time jobs etc are generally not considered. Quote Link to comment Share on other sites More sharing options...
Steve99 Posted February 10, 2013 Share Posted February 10, 2013 my mum works as a home loan officer she says it doesn't work like that anymore. they do this affordability thing and look at your outgoings etc. so a young couple with no kids for example could loan a lot more than a couple with two kids. what they would loan seems crazy to me I think a return to 3.5 x income would bring house prices down Beware of the banks version of affordability. They take out your current outgoings, like loans etc, subtract the amount that relates to the 'poverty' index and the rest of your pay is avaliable for a 30 year loan. Some mortgage brokers will go even further, larging up your income etc. Very much like the UK was a few short years ago. If Aus banks applied real afordability or strict loan ratios like they used to some years ago, house prices would fall through the floor and actualy become afrodable. Quote Link to comment Share on other sites More sharing options...
Guest JK2510 Posted February 12, 2013 Share Posted February 12, 2013 Some lenders will also lend more than others, but at not as attractive a rate. You may also find that overtime, part time jobs etc are generally not considered. Is the above true? A part time job and regular overtime aren't considered...I think that's written out a large amount of people if it is. Quote Link to comment Share on other sites More sharing options...
Johndoe Posted February 12, 2013 Share Posted February 12, 2013 Is the above true? A part time job and regular overtime aren't considered...I think that's written out a large amount of people if it is. Dunno about overtime but shift pay is. If they work on your last 10 pay checks as they did with ours, I can't see them delving too deeply into what the pay consists of. Things may have changed though since we applied. Quote Link to comment Share on other sites More sharing options...
rikyuu Posted February 15, 2013 Share Posted February 15, 2013 my colleague who earns 50k pa on a temporariy contract, borrowed 440k from the bank, so that's about 9x, and he owes 60k hex (from Uni). Aparantly that's fine as it's an investment and will get rent, which won't actually cover the interest payments, but that's fine too as the government will give him tax back on his loss making investment. As long as he stays living with his parents, the bank will let him buy as many investment properties as he wants. However, I've heard there's no debt problem here, and the banks have done so well over their foreign counterparts because the don't do high risk lending. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.