Buying a home might be easier than you’d expect. In fact, if you buy right and get solid financial advice it could be even more affordable than renting – after you pay the dastardly deposit of course.
“Tell ’em he’s dreaming!” You might say.
Well we’re not, and we’ve even got hard evidence to back up our claim that buying and paying off a mortgage a be cheaper than renting. Considering the many benefits of owning a home, it might just be time to start considering fast tracking your property aspirations. Without further ado, here’s our proof.
Buying in Sydney – cheaper!
You may not be able to get a mansion in Darling Harbour for $450,000, but believe it or not you can still pick up a one bedroom studio in inner Sydney for that amount. Alternatively, if you look further out of the city, you could buy a unit at around the median price somewhere like Camden – you may even be able to afford two bedrooms.
Assuming a loan term of 30 years, a 20 per cent deposit and a market interest rate, the home loan on such a place will set you back roughly $432 per week. This proves that once you get past the road block of the deposit, paying a mortgage doesn’t have to be a chore – particularly if you’re doing so with a partner or friend.
Now, let’s look at the median rent in the area. A housing NSW report states they are as follows:
Inner ring: $615 or $183 more than mortgage repayments on a $450,000 apartment.
Mid ring: $520 or $92 more.
Outer ring: $450 or $18 more.
As you can see, buying a modest one bedroom apartment can be cheaper than paying rent – even in the heart of Sydney. You may have to sacrifice a little bit of space and perhaps a spare room, but you’ll be building towards a better financial future, instead of lining your landlords pockets with your hard-earned cash.
Buying in Melbourne – cheaper!
Melbourne comes in a close second to Sydney when it comes to ridiculously expensive house prices. However, a Real Estate Institute of Victoria (REIV) report shows that the city can still be affordable even for first home buyers.
For example, Carlton, just 2 km North of Melbourne’s central business district is one such location where buying can be cheaper than renting. You can repay the mortgage on a $210,000 one-bedroom property here for just $221 a week – that’s $135 less than the suburb’s median weekly rent of $356.
Another example can be seen a little further out in Pakenham, where you’ll find property at an even more affordable price-point. Buy a three bedroom unit at the median price and you’ll be looking at $294 per week in repayments. Compare that to the median rent of $300 and your choice should be easy.
Why is buying better than renting?
If buying in Sydney and Melbourne can be cheaper than renting, then logic says that it’s possible throughout the Australia. But what are some of the benefits of buying a property instead of renting?
Build equity: pay yourself, not your landlord and build equity in your home.
Enjoy capital gains: CoreLogic RP Data shows property in many cities has been increasing in value.
Leverage into another home: Buying your second home is far easier than your first.
Make yourself at home: When you own a home it’s yours to customise as you wish.
If you’d like to take advantage of these benefits and more, get in touch with us today. With a tailored home loan and some smart decisions when buying, you could be on your way towards successful property investment quicker than you’d think.