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I currently do both, rent and have a mortgage and quite frankly I'm getting rid of the mortgage, will continue to put money into the "mortgage" account but once I have hit my goal amount of savings, use that as a deposit for a new place and I will most probably end up with paying less in mortgage than I do now (even if the rates jump up over the next 2 years).
My previous house the mortgage is $45pw, it is rented for $110pw. I have it for sale, whoever buys it would be paying about $90pw if they had no deposit, or much less if they did (banks won't give you a loan in the country with 0% deposit anyway).
Current house the mortgage is about $115pw, it would rent for $200+pw, but it is WAY too small for us and we really can't live here much longer, even though it is a gorgeous little house it is just Too Small and with one bathroom (with the toilet IN it) and lots of long haired people in the house who take long showers as well as little people who take long baths the bathroom contention alone is a make-or-break. DD#1 hopping around outside the bathroom because she is "buuuuuuuuuusting" is a regular sight.
We're building a new house at the moment, it will cost us about $140pw and to rent a similar house would cost $330pw. Two bathrooms! Two toilets! *drool* lol
I really really really want to sell the first two houses so we have no mortgage at all and wads of cash in the bank but it just isn't working out that way for us, so I'm resigned to being an "accidental landlord".
OMG I would like to trade mortgages with ANY of you!!!
Our repayments per FORTNIGHT are $2035! Its all of my wages. Gotta love Sydney prices.
We have never rented, DH bought his first house and i moved in just before we got married. The mortgage on that place was around $500 p/f (changed with interest rates). Its was a two bedroom unit and when we got preg with number 2 we needed to make a decision about what we would do with the house as we desperately needed more room. DH is in the RAAF so we had a few options including buying another place, subsidised rent in a private rental or a defence housing property. In the end we decided to buy a bigger house which costs us more money however after we sold our unit we actually made all the money back that we would have paid in mortgage, fees etc so effectively we had lived rent free for 4 years. Its kinda made me realise that dh was right to not want to rent (he was adamant that we wouldn't and i wanted to rent instead) as in the end we were better off financially for having a mortgage than renting.
Same... ours is $1400 per WEEK but we went halves with XPIL so they pay half. (I dont pay any now since we're divorced :lol: ) To rent a house the same as ours (just taking into consideration our half of the house... we made it into a duplex with 2 three bedroom houses) it would probably cost about $500-$600 in this area possibly more as our half had 3 bedrooms + 3.5 bathrooms (each bedroom has a full ensuite) & is huge!! The other half has 3 bedrooms + study, 2 bathrooms.:
Being a single mum now I'm back to renting & will be moving to Forster at the end of my lease where I will get a 3 bedroom house for around $250 a week :)
Renting can in fact be alot cheaper. Renters don't have rates (sometimes water) and don't have to maintain the property. So if you pay rent, you pay your money each month - clear. Nothing else.
Property is a long term investment, you can't get all antsy if your mortgage payments seem close to rent - you have an asset growing in value every single day.
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It's all relative though.
Our mortgage repayments are have of yours but I would bet our house is likely half the size too (115m2), or yours is in a much better location (our is right out on the edge of town - literally go the bush across the road).
Plus I daresay that the morgage repayment take up a similar % of income. Our household income (mostly from DH as I only work casual) is less then $3000 f/n (between $2200-$3000, depending on my work) - this means that 1/3 of our income is going towards our mortgage repayments (more in reality as we are paying double at the moment).
Rumpled elf may have significantly cheaper mortgage then myself, but I bet her household income is alot less too.
Thats a great point Misty..if I work it out, our Mortgage varies from being 29% to 23% of our weekly income (I am self employed, and my income can vary a little). I think it is suggested that your housing cost should no more than 30% of your income after tax.
Our mortgage is $550 per week on aprox $330K loan. We only bought our first place 12 months ago so we missed the boat when it came to cheap property prices unfortunately :( We paid $380K for a 3 bedroom 2 bathroom duplex. It's brand new, but it has NO yard for the kiddies. Our mortgage takes up 1/3 of our total wage with both me and DH working fulltime and when I drop back to part-time after bub is born, it will take up nearly half of our weekly income. There is absolutely NO way I could ever be a SAHM unfortunately :( BTW, rent on a place similar to ours would prob be about $400 per week.
We pay about $450 a week on the mortgage. To rent a similar house would cost about $350 a week so we're paying more to own- especially when you add on rates, repairs, house insurance etc.
ETA: We made the decision to buy though as we can afford the mortgage with me being a SAHM and it gives us the freedom to garden and paint etc and also to put down roots somewhere. I had no hesitation renting before that though.
It's hard isn't Mama Spice, if I wasn't working our mortgage would be a little less than 50% of our income, it would liveable when our other debt is totally cleared (not long now!!! :) ), but there would be no room for extras, just the basics.
I am so thankful to God that he blessed me with talents in my current career, because it has meant I can work for myself and pick my own hours, and essentially work part time hours for more than a full time wage in my indutsry. Otherwise, I am not sure how we/I would keep going......thats why I take my hat off to anyone working full time with kids....you guys rock!
Ours is just shy of 2300/mtg for a 4br+study with not much yard. I'd prefer asmaller house and larger block tbh.
Our repayments are about 40% our income
Our's is only $300pw, we bought land and built when the time was right so our morgtage is under $200000. If we sold now we could buy outright in some rural areas. Renting in our area is around $350pw.
Lulu is very right...it's investment. we got in just at the right time, any later and it would not have been worth it.
If you do rent and your dishwasher, stove/oven or heating need repairing they have to get it fixed, if you own it and don't have the money, you wait :)
Only 115? Yikes! Our little worker's cottage is about 90sqm, plus verandahs. No wonder you're squeezy. My old house and the new one we are building are both 150sqm (plus verandahs) but one has massive bedrooms, one massive bathroom, and the new one is a modern layout with smaller bedrooms, more bathrooms, walk in robe etc but heaps of living area. All the builders have a floorplan very very similar to our new house, and it is our builder's most popular 4br design - very good value for money.:
Centerlink give me $320 a fortnight while I'm too pregnant to work! I feel so rich! And the builder wants us to get loan approval 6+ months before they even start the house while our mortgage broker is trying to negotiate us getting a loan AFTER the house is built. Argh. This is what you get for building a transportable - costs $60k less than the equivalent house built onsite in brick, but much harder to get a loan for. All fun and games.:
Our mortgage is sitting at 96K and we pay 670 a month.. most people near us pay that a week.. and then some..
It is heaps cheaper to buy a cheap house then it is to rent here
When we had our last mortgage it was nearly $500 a week. Both DH and I were working and we only had one child, she was school age. When we decided to have more children we knew we would have to sell and rent.
We've been very happy renters for 7 years now. DH is a banker and like Lulu mentioned sometimes renting can be a much cheaper and wiser decision. Please don't panic if you feel that your mortgage repayments are getting too much. There are other ways to secure a nest egg that are just as good as a house. When we sold our house we put the profits into shares and DH has self managed that. Unlike a house where you can't liquidate a portion of the asset ie sell the spare room, when we have a financial crisis we can sell some shares without threatening the whole nest egg. Our portfolio didn't suffer during the GFC either, it actually grew because we didn't sell during that time (DH held his nerve) we bought!
Anyhow I'm not saying that our way is better... It's just an alternative. Here in Australia there us huge pressure on young couples to get into the property market and it's not always the wisest thing to do. At the end of the day make sure your money is working for YOU... Don't become a slave to it. Remember also that while renters seem to be giving their money away to landlords people with very little deposit on their mortgage also end up giving away hundreds of thousands to the bank in interest. DH is hoping that if he continues to invest wisely we may escape having to pay the bank much/any interest at all when it comes time to buy a house... Maybe we will be able to buy one outright... No mortgage. In the meatime we have been fortunate enough to live in a big house on a big block of land (worth well over a million) in a quiet leafy suburb with quiet neighbours. Quality of life should always come first :)
ETA: I probably also need to add that our decisions have been influenced by several other factors. DH and I are old enough to remember the situation in the 80s when interests rates were up and above %17 and many people had mortgages higher than what their homes were actually worth... A horrible situation indeed. Also my parents were slaves for a mortgage and the pressure contributed to their divorce... Overnight the house and all assets were sold ... It was like everything they had worked for vanished. My mothers boyfriend then squandered the bit that was left and when she finally left him she found herself in her 40s with barely a penny to her name. Debt collectors were constantly hounding her for the boyfriends debt too.
Not meaning to scare... Just put my choices in context.
My wages only just covers my mortgage (I have my xh to thank for the mortgage - I had my place almost paid off when we got together - he coerced me into refinancing the property quite a few times). Attempting to pay a personal loan (for solicitors fees when he went after my place after we split), rates, body corporate, water, insurance means currently any rent goes onto that so personally I have minimal money left at the end of a pay period. My accountant worked it out that approx 90% of my income goes on bills associated with my home, out of the last 10% I have to pay normal living expenses (gas, electricy, rego, insurance, car costs) and food etc. But all will work out in the end, yes it is tight right now but things will always work out the way they are supposed to work out.
Our is definitely on the higher end of the scale, $1,725 a fortnight four our new house and we have an investment propery on top of that which is $1,100 a fortnight, but we get back in $680 a fornight, the rest is negatively geared. In proportion to our wages it depends on how many hours I work a month but on average it is about 50% of our wages, excluding the income we get in for the rental property. But we are selling that at the moment - when it sells :rolleyes: to take the pressure off as such, it will clear the investment loan and take a good chunk out of our repayments on our current house as well, we don't have any penalties for paying our loans off earlier. I also put $300-500 extra on our current house a month depending on what I have brought in to reduce the length of the loan, the investment loan gets $100-$200 extra a month on it as well, as I have just set the Direct Debit to be that bit higher JIC and can always redraw the extra as it just sits there reducing the interest on the loan, and it makes it easy when rates etc come around ad I have the extra money sitting there.
The new house is sustainable as well, runs on full solar power, recycled and rain water, huge amounts of insulation etc, so we are seeing big savings in our everyday living costs, which is why the cost to build it was so much more than another house of the same size.
But for the value of both of our properties has gone up substantially, both times buying then building at the right time and right place.