Browse Forums Home Finance 1 Mar 19, 2018 1:52 pm New home buyer, plans drawn up and I thought we'd be built by last Christmas but yet to start - the typical scenario! Possibly overthinking things, but nervous about the size of our mortgage. We'd originally hoped to end up with a mortgage of $600k ($300k for the land, up to $300k) for the build but our house design (which we thought was simple and modest) has suddenly blown out and we're facing a $700k mortgage at the end of the day. (Frustrating, but feels almost unavoidable with current house prices unless you've got inheritance or are already in the market) The house will provide enough space for us with 3 bedrooms and a study so it should be future proof, but the mortgage looks like it will end up eating up all of one of our incomes leaving about $3500 for all our other expenses and savings per month. Obviously this presents a problem if we decide to have children, although we can rely somewhat on maternity leave pay. I've figured out that we are just paying under a third of our gross income on our mortgage, but hoping to get some guidance into whether we're in a danger zone or whether I'm overthinking things. Re: Figuring out what size mortgage we can finance 2Mar 19, 2018 2:04 pm I can't give you any advice specific to your situation, but as far as having kids goes, you just kind of make it work. Maternity leave aside, of course - it might be that you go back earlier than you had planned or go back full time instead of part time. Whatever works for you. Your expenses will change a bit after kids too, so what you don't spend on restaurant dinners every week ends up going to tiny clothes, nappies etc. We have two kids now and will soon have a pretty hefty mortgage. The bank will give you an idea of what you can afford too. Re: Figuring out what size mortgage we can finance 3Mar 19, 2018 2:19 pm CG Scardycat I can't give you any advice specific to your situation, but as far as having kids goes, you just kind of make it work. Maternity leave aside, of course - it might be that you go back earlier than you had planned or go back full time instead of part time. Whatever works for you. Your expenses will change a bit after kids too, so what you don't spend on restaurant dinners every week ends up going to tiny clothes, nappies etc. We have two kids now and will soon have a pretty hefty mortgage. The bank will give you an idea of what you can afford too. Thanks for your reply! The bank's fine with us fortunately, we'll be toward the top of our lending range but still able to get a loan. But I'm also conscious that interest rates aren't going to get any lower than they are now. It's a bit of a scary time to be entering the market! Re: Figuring out what size mortgage we can finance 4Mar 19, 2018 3:26 pm how much deposit do you have i would be scared ----less with a $700,000 mortgage assuming rates go up to 7 or 8 percent in the next few years you would be looking at $1,200 per week mortgage repayments Re: Figuring out what size mortgage we can finance 5Mar 19, 2018 4:10 pm aussieta how much deposit do you have i would be scared ----less with a $700,000 mortgage assuming rates go up to 7 or 8 percent in the next few years you would be looking at $1,200 per week mortgage repayments Truly terrifying to think about rates going up by more than a few percent - I suspect that there'd be lots of people who would be in dire straits. Re: Figuring out what size mortgage we can finance 6Mar 19, 2018 4:18 pm aussieta how much deposit do you have i would be scared ----less with a $700,000 mortgage assuming rates go up to 7 or 8 percent in the next few years you would be looking at $1,200 per week mortgage repayments Sorry, to reply to your question - we had a deposit for the land and a guarantor for the house build. To be honest I'm feeling a bit flummoxed by the whole situation. We had a good deposit, we live frugally, we have decent jobs. Thought I'd done everything right. Re: Figuring out what size mortgage we can finance 7Apr 08, 2018 11:31 pm HLionheart aussieta how much deposit do you have i would be scared ----less with a $700,000 mortgage assuming rates go up to 7 or 8 percent in the next few years you would be looking at $1,200 per week mortgage repayments Sorry, to reply to your question - we had a deposit for the land and a guarantor for the house build. To be honest I'm feeling a bit flummoxed by the whole situation. We had a good deposit, we live frugally, we have decent jobs. Thought I'd done everything right. 20% deposit on a $300k plot of land is $60k. A good deposit for a $750k house and land build is $150k. I don’t think this is necessarily a fault with your spending or saving but because house prices are just so high. I am personally risk adverse and avoid debt at most costs so think your risk is too high, especially with a guarantor on the loan. Does the guarantor fully understand your financial position and the risk they are taking on? Re: Figuring out what size mortgage we can finance 8Apr 09, 2018 11:26 pm You can mitigate some of the risk by considering a fixed rate - and in terms of affordability if the bank has already passed you through their calculators the next and most important test is how you feel about the repayments. Do a proper budget - that is, not cut to the bone but actuals, what you actually spend - asic has a great simple budget tool - and test how much is left over, or look at your current spend on housing and add your current savings. AS someone mentioned above you do and can adjust your spending for the new world, but it should feel slightly scary but not overwhelmingly terrifying. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 56276 Dear Members I have to decide the Facade column size. My custom builder standard is 350mm with rendering, but i asked for 470mm plus stone or tiles and yet to get… 0 7496 All sorted guys. Just needed to buy a blade with the correct bush. Dunno how to delete this post, can't find any help file. 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