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What kind of mortgage could we afford on this income?


Maruska

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Hi all,

 

I`m trying to round up the suburbs we are going to look at when we arrive. We are going to rent for at least a year ( probably longer) but would like to buy in the future. We have 2 small children so I am concentrating on suburbs with good schools. I would like to get experience/ideas about what amount of loan can we possibly get. I don`t want to move the kids again once they are enrolled at school so no point in renting where we can`t ever afford to buy in the future . I am a nurse, my husband is a nurse educator. Combined income, provided both of us work full time, would be 170 - 180 K per year. We might be able to put about 100 K as a down payment ( depends how much we spend on the move to Australia lol)

One of us might work part time actually but I am just trying to get an estimate.

Advice is appreciated.

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The banks in Australia don't lend based on multiples of income but rather on affordability based on your outgoings. When we got our mortgage we had to provide a list of outgoings and how much we could borrow was based on this - rent is not included in the calculations as this will not be being paid once you are paying off the mortgage. We were able to get agreement to borrow $375k based on my husband earning $85k at the time.

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The banks in Australia don't lend based on multiples of income but rather on affordability based on your outgoings. When we got our mortgage we had to provide a list of outgoings and how much we could borrow was based on this - rent is not included in the calculations as this will not be being paid once you are paying off the mortgage. We were able to get agreement to borrow $375k based on my husband earning $85k at the time.

 

 

Oh OK, that`s completely different than what we had to provide in the US ( income based). Makes sense though. Thanks!

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Anything more than 80% deposit gets very costly in terms of insurance - so on that basis you could buy a $500k property and borrow $400K

 

In terms of your salary ours was similar when we arrive and WestPac were willing to lend us up to $900K.

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Anything more than 80% deposit gets very costly in terms of insurance - so on that basis you could buy a $500k property and borrow $400K

 

In terms of your salary ours was similar when we arrive and WestPac were willing to lend us up to $900K.

 

 

Wow we aren`t planning to borrow such a huge amount of money, want to have some of the salary left over for fun and travel:cool: . This is very reassuring though.

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As a rule of thumb the banks used to go by about 3 times your salary.

 

I think it is a good measure too for yourself to use this multiplyer.

Interest rates will start to go up probably late 2014 and you need to factor in higher rates than you will get with your loan.

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I thought it worth mentioning also that interest paid on a residential mortgage isn't tax deductible here - which I believe it is in the US?

 

You get a certain amount back if you`re a homeowner, however you have to pay yearly property taxes ( high for us because we live in an area with excellent school). Not the whole thing is deductible, not sure how much of it.

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They're a bit stricter at the moment. When we arrived, the CBA were trying their best to throw about 850k at us, which I never would have borrowed in a million years. But recently, we were considering down-sizing and spoke to them again, and things seemed much tighter.

I find that the online calculators are a decent guide but nothing else. When you actually get into the bank and they take your details, things might be very different.

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all together our loan with mortgage lenders insurance is around 95 ish % of cost price we bought it for $390

 

 

 

We pay $1034 a fortnight :)

You can switch too monthly, but we kept it as fortnightly so we make 2 extra payments a yr ..

 

wee

Hi Fairystar, if you dont mind me asking, what are the monthly payments for a £375k mortgage? TIA
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