Number crunch: The nitty gritty of buying your home
Buying your first home? The numbers can be scary, that’s for sure. But while the kinds of figures involved are intimidating, knowledge is power. And if you get your head around the basics, you’re most of the way there.
A good place to start is running some numbers using our online calculators. We have 15 different online calculators to help you see where you stand including calculators to determine borrowing power, repayments, loan comparisons, principle and interest and stamp duty.
Remember that our calculators can only provide rough estimates, so you will need to talk to a Loan Market mortgage expert as well to nail down the exact amounts.
Number Crunch 1: How much can I borrow?
Knowing how much you can spend on a property is crucial and it’s easy to find out. Punch in your income, expenses, the number of dependents you have and a few other details, and you’ll soon know your borrowing power.
There are a number of factors which determine your borrowing power, but your income is right up there at the top. So it’s vital to work out how much you can realistically afford, based on your monthly income.
Number Crunch 2: What will my repayments be?
Everyone wants to know this one! After all, this is the amount you’re really going to feel. To find out, click here, then enter the loan amount, period and type and the interest rate amount. The calculator will then spit out your monthly, fortnightly or weekly repayments.
Repayment options may affect how much you pay for your home loan and for how long, so it’s important to look for the most favourable repayment options you can get. You ideally want to pay the principle off as quickly as possible so you would want a principle and interest loan, rather than an interest-only loan.
You would also ideally want a loan that allows you to make extra repayments whenever you can without penalty, so you could pay the loan off even faster.
Number Crunch 3: How much stamp duty will I pay?
Don’t forget about stamp duty. It actually varies from state to state, so it can be hard to know exactly how much money to set aside. Jump into our calculator, select your state, answer a few questions about your property use, confirm you’re a first home buyer and enter the property value and loan amounts. You’ll then know the government fees you’re up for (including stamp duty) and if there are any concessions you can apply for.
As well as stamp duty, you’ll need to factor a range of other fees into the equation, including the fees charged by your lender, the interest you will pay over the life of the loan, solicitor and conveyancing fees, building inspection reports and so on. Only then will you have a better idea of how much you’re actually borrowing.
Other fees you may be liable for can include;
- Establishment fee - a one-off payment when you take out your loan.
- Lenders’ mortgage insurance – insurance that covers the lender if you default on your loan (normally charged if you have less than 20% deposit).
- Administration fees – ongoing fees charged every month or year for administering your loan.
- Break fee – a fee charged if you break your fixed rate mortgage.
- Early exit fee – a fee charged if you pay your loan out early.
Ready to find a broker?
To get to the nitty gritty of your home loan, it’s important to talk with a broker and really crunch the numbers and you can find one in your area from our index of more than 500 brokers across Australia. So for current loan comparisons, mortgage brokers, our range of home loan calculators and more, visit us online at Loan Market or call us on 13 56 26.