Hi all.

I am really starting to get confused/concerned about what we can hope to expect to pay once in OZ.

Having done lots of research of properties around the Brisbane area it seems the average house is say about 350-400k. Now if you are moving out with no equity from the UK, what can you expect to get on say $90k a year?

I dont know wether other brits going over have plenty to take from equity to fund their dream house etc, but on looking on certain websites that show you how much you can borrow, the amount they say you can seems rather exagerated compared to income.

I know it is private info but i would be interested to hear of others mortgages compared to wages/deposit etc.

I know, nosey, nosey, but i really would like to consider what ball park we need to be looking at.

Cheers all

Basically if you do not have a 20% deposit you can get a mortgage but you will have to pay mortgage insurance on the cost of the mortgage. (it is thousands not hundreds) Cannot say what that will be as it depends on what you borrow. You will be entitled to the first time home buyers grant that could cover your excessive stamp duty.

I would ignore the theoretical calculations of what banks are prepared to lend you, e.g. from realestate.com calculators etc and still stick to the more traditional rules e.g. around 3x income. Interest rates are relatively high, compared to the UK anyway and you should take this into account.

Re, mortgage insurance as mentioned in the 2nd post - I think this is the biggest nonsense in Aussie homebuying. No-one forces the lender to lend you money, and they make a call on that based on your circumstances. Why should you then pay for insurance that bails them out, but not you in the event of defaulting!!!!

You will astounded what the banks will offer you over here it borders on stupid. We walked into a major high street bank fresh off the boat (3 years ago) I was still in my 3 month job probation and the other half was temping (combined salary was probably 100k) we were offered a mortgage of 750/800k on the spot could get more if we really wanted it and were willing to push.

You really need to work out what you can afford as the bank offer bares no relation to this (theres no way we could afford the repayments on a 800k mortgage and have a life). We ended up with approx 250k mortgage which is very manageable. I can now see why there are so many families in real strife if they take what the bank offers.

Hi
I totally agree TrickyTree - its what you can afford to pay in the monthly repayments that counts and that is what you need to work on when deciding how big a mortgage you want regardless of what the bank is willing to offer you based on the wages you are bringing in.

Forget what the bank will give you and focus on the facts- easier for you to assess realistically that way.

yes - your average house price will be between 350 to 400k.
Say you get a 100% loan for a 380k house, that will be monthly repayments of approx 3K (the interest alone will be about 2,500 p.m. on the current 8% rate)

On a 90k salary, you will have about 5,500 p.m after tax.

So your absolute minimum monthly repayment will be 51% of your net pay.

The question is - are you comfortable with that ?

Here they consider you to be in 'mortgage stress' if more than 30% of your GROSS income goes on loan repayments i.e. for you more than $2250 per month. Personally I think the 30% number is a little low....still leaves you $3k to play with. You could also consider an interest only loan while you get established so you aren't mandated to pay off the principal but try and do so every month anyway. As @boy said the interest alone will be in the region of $2500 per month.

I would say you'd be looking at about $6k in mortgage insurance - this is a one off cost so you will need some funds to get started - although I think this can often be added to the loan.

Really it all depends how desperately you think you need to be on the housing ladder.

The mortgage affordability advice we were given years ago by our bank manager was x2.5 the main salary plus the second. Works fine so long as you've not got other major expenses going out - loans, school fees etc.

I'd be a bit careful about overstretching yourself at the moment, if interest rates get as high as they are in NZ things could get really tight for you.

What % of your income you can afford will always depend on how much your income is to begin with and what other expenses you have to pay.
I'd strongly recommend being very cautious though, so that you don't lose sleep (or your house) when rates rise. Make sure you can afford to pay an extra 2% or so, even if it means tightening up on the weekly budget. If you can't, then IMO you are overstretching yourself and will be caught out sooner or later by rate rises.
Also think about job security, and whether you want to be tied to a job in order to pay the mortgage, or want the flexibility of being able to drop to a lower salary if you need to.
Just my two cents worth!