Browse Forums Home Finance 1 Mar 10, 2009 5:25 pm Hi All,
In this time of uncetainty, I'm interested to know how much everyone has 'prepared' for in the furture. We worked what we could comfortably pay back, and then worked out what we would have to pay if interest rates went up...but i mean...how far do you go?? We worked out that up to 12% we'll be able to make repayments fine with the CURRENT income we have, we both have incomes that go up each year and very stable jobs. We'll also be able to make repayments for interest at higher than this rate, but will be a little stretched (at our CURRENT wages)... I'm just intested to seee how high other went...i mean,,,i know they were once at 18% but who can prepare fir that!!??!! We also on plan on paying more than the minimum amount right now while interest rates are low so we have a buffer if anything does go wrong... what have others done??? Re: What interest rate have you 'prepared' for? 3Mar 10, 2009 5:41 pm No trust me...we'll be paying more... I have horrible visions of us ending up living in our car or some such thing after we can't pay our mortgage anymore!!! Perhaps I'm a little over cautious....... Re: What interest rate have you 'prepared' for? 4Mar 10, 2009 5:49 pm well when we applied it was 8.9% which was still comfortable for us.. so we are very comfortable now and will try and make extra repayments to cut down the mortgage. Re: What interest rate have you 'prepared' for? 5Mar 10, 2009 6:25 pm i would say around 13% when thats as long as we have jobs which is anyones guess at the mooment finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: What interest rate have you 'prepared' for? 6Mar 10, 2009 6:55 pm I think a question of "what rate" is irrelevant if you don't include what income, what level of committment of income you're prepaid to make and what your goal is.
I've always calculated on 12%, one income, and committing no more than 33% of earnings to pay off over 25 years. That means if interest rates go down you pay extra principal and reduce the 25 years, someone gets pregnant unexpectedly you're not suddenly in an "oh shyte" situation, have plenty of room to pay more into the mortgage, or want scope for other things in life...you can afford to do it. If the calculation didn't work out I didn't get into the transaction...no matter how attractive "the dream". At present calculation that means that we'll be debt free by the time DS1 is in high school...rather than ending up on TT or ACA complaining! mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: What interest rate have you 'prepared' for? 7Mar 10, 2009 7:11 pm This is going to sound really bad. But as I'm building with mum, and I'm the one borrowing money as she had cash, I calculated to borrow only the amount I would be able to pay off if I was on the sole parent pension.
I've always worked, (went back when DS was four months) but if I become ill (as I have been) or if I was out of work, there is no other income to rely on. There's only me. So I was only prepared to borrow what I could pay back if the worse case scenario happened and I ended up on the pension for any period of time. On a side note, I also have life insurance that would be able to completely pay out my loan (+ extra) in the event of my death so that mum won't have to sell. My share will transfer to DS. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: What interest rate have you 'prepared' for? 8Mar 10, 2009 7:18 pm We are lucky to have a fair bit of money sitting in re-draw which we will leave and that will help us out if rates go sky high. The highest rate we have had in recent times was 9.21% and that's after a 0.6% discount for being in a package.
We're enjoying the lower rates as we currently have a construction loan and hopefully they won't start creeping back up until after we have sold our current home. I think we could manage 18% if we had to (we are both self employed) but I really hope we never have to see that again in our lifetime, for everyone's sake. Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: What interest rate have you 'prepared' for? 9Mar 11, 2009 5:38 pm I've based on about 9% but in a couple of years my car and a few things will no longer need paying which will free up a lot more cash 'A bottle of wine contains more philosophy than all the books in the world.' Louis Pasteur Vegie garden: viewtopic.php?f=19&t=27637&start=0 My Backyard Adventure Re: What interest rate have you 'prepared' for? 10Mar 11, 2009 7:54 pm We've based on about 9.5% but we can handle higher figures if it does climb higher. Re: What interest rate have you 'prepared' for? 11Mar 12, 2009 7:49 am We based ours on 10% cause when we applied for the loan it was going on the up and up, we currently pay $700 more then what our repayments are while we can (two income, no kids household at the moment!), the best bit if we need to we can draw down on it, if not we can see the loan going down which is great!
When we go down to one wage might be a bit harder, my DH is a chef, even though they do the hours they don't get paid the bigger pay check to match! But we figure with all the extra repayments we make now we should (hopefully!) be ok! l was told by our broker to use our loan as a saving account putting all extra money onto it while we can cause you can 'redraw' if you need be, so thats what we are doing! Re: What interest rate have you 'prepared' for? 12Mar 12, 2009 9:45 am Quote: was told by our broker to use our loan as a saving account putting all extra money onto it while we can cause you can 'redraw' if you need be, so thats what we are doing! Good advice; we have always done this, the money is there if you need it and saves you interest in the meantime, your loan goes down a lot faster, and you create a buffer if you do need to reduce your payments in the future if your income goes down, interest rates go up or whatever. We are paying over 4 times our minimum payment (not hard as the outstanding amount is very low), expecting to have this loan paid off in around 18 months. Re: What interest rate have you 'prepared' for? 13Mar 12, 2009 11:49 am Helyn Good advice; we have always done this, the money is there if you need it and saves you interest in the meantime, your loan goes down a lot faster, and you create a buffer if you do need to reduce your payments in the future if your income goes down, interest rates go up or whatever. We are paying over 4 times our minimum payment (not hard as the outstanding amount is very low), expecting to have this loan paid off in around 18 months. 18 months, wow that is excellent! Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: What interest rate have you 'prepared' for? 14Mar 12, 2009 8:07 pm Yes, but as mentioned on previous thread the proceeds from sale of our old house and an investment unit covered most of the cost of new house and we have a 20 year 'head start' on some of the other posters on here
I guess my point was that by paying extra in earlier years - ie when paying for our first house- that's what has built up our equity to the point it is today. Fixing your home loan 15Mar 15, 2009 1:44 pm Seeing that only about 2% of new borrowers are fixing their home loan rates now, I somehow don't see interest rates as the biggest worry on people's mind at the moment. Thanks mate. Yeah good points! Leaning towards Option 3 to get a bit extra space in the cabinets but not going too crazy high (and expensive). Would require a mini… 13 39743 Hi All, I just wanted to close this topic out with an update. So we ended up agreeing to a number with the insurance company, and after an extensive amount of hand… 8 23405 You have mandatory building inspections and privately engaged building inspections. The difference between the two comes down to inspecting the building so it's safe and… 3 18075 |