This calculator is designed to give you an estimate of how much money you can borrow from a lender should be used before even searching for a property to give you an idea of how much you can afford to spend.
Purpose: The purpose of this calculator is to merely give an indication of what a lender could offer you, based on some of your basic incomes and financial commitments.
Real estate property costs depend on the State where the property is situated. A property in Sydney is twice the cost of a property in Darwin. Properties in Perth, Adelaide, and Hobart almost have the same home median and unit median costs. To give you an idea, these are the minimum earnings per annum required per state, to cover the average cost of a mortgage.
However, these figures do not guarantee you an automatic home loan approval. Other factors such as living expenses, debts, credit limits and other payments will be weighed to determine if your buying power is indeed sufficient to be able to repay a mortgage without hurting your finances.
Mortgage stress is a loan repayment condition wherein your mortgage is equivalent or more than 30% of your income. On average, the monthly mortgage payments in Australia is anywhere between $1,500 to $3,000, some even more.
If this amount is higher than 30% of what you are earning in a month, it would be difficult for you to repay a loan unless you increase your borrowing power. Most Australian household experience mortgage stress because they fail to predict their personal living expenses and other financial liabilities versus the amount of mortgage that they will need to repay during the whole term of the mortgage. It would be ideal to include your future financial obligation in computing for your borrowing power to avoid allocating more than 30% of your future income in mortgage repayments.
You can increase your borrowing power in different ways.
The higher your borrowing power is, the easier it will be to make mortgage payments without having to stretch your budget too far or to worry about not being able to afford other items on your budget list.
A loan specialist can help you understand your current finances. Talk to an Intellichoice mortgage broker and strategize a system that can help increase your borrowing power. Land with better interest rates and lower fees by finding a loan specialist that connects you with the best possible bank or lender for you.
Find out why our clients wouldn’t use anyone else. Put your financial needs in the hands of the leaders in the market. Find out why we’re the mortgage broker of CHOICE! Speak to one of our finance specialists TODAY!
