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Location:
Canberra
Registered:
August 2003
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Re: Home Loans
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Tue, 27 April 2004 06:16
 
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Assuming you have a 5 % deposit you will owe the Bank $380,000.
Assuming 6.5% interest rate.
380,000 * 0.065 = 24700 (annual interest)
24700/12 = $2058 interest per month plus you have to pay of some capital so you can count on the mortgage costing you $2500 per month
2500 * 12 = 30000
assuming you income is split roughly equally you will be looking at a combined income of $50,000 after tax, so is $20,000 enough for the rest of your lifestyle? maybe you tell us.
-THEN-
Now consider a possible 2% interest rise in 12 months(within the bounds of probability if labour get in)
380,000 * 0.085 = 32300
32300 / 12 = $2691 interest per month, plus some capital say $3200 per month
3200 * 12 = 38400
take that off your $50000 combined salary after tax and you are left with $12,000 for everything else (food, electricity, water, phone etc etc)
You fail on the repayments you loose the house, and the interest you have paid up to this point (could be $24 grand in one year) ouch!!! I have always been taught that if you can't afford a 2% hike on current rate then don't apply.
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