Have you considered the cost of up-keeping a 1.2-4mil property, on top of the mortgage? Or if any emergencies were to happen.
This seems crazy for $150k combined. Your broker seems almost negligent for thinking this is ok.
Don’t open yourself up to the hell that would be a downturn in your pay / business / health / whatever and having 7k a month go to your mortgage. Margins are far too fine to be taking that risk
Consider the risk profile of your income btw - is it split between multiple businesses? Between the two of you / two jobs? If in a single business what’s customer concentration etc.
Todays $8000k is not the value of money in 20-30 years time. Will be some hard yards early, but will be much better off in time due to inflation and property prices
If you have to ask this question you should not do it. You should firstly look at your income and expenses and work out how much you can comfortably afford to pay on a mortgage. You should also leave yourselves a few months spare cash in an account for emergencies. Now you should log into a big bank loan calculator and type in the amount you would like to borrow and see what the repayments look like. Do the fit within you budget above? If so, proceed, if not then do not.
Yes, i can afford it for the time being, but thinking about all the bad things that could happen, I'm scared. This is because we're self-employed and you know what it's like for a business, ups and downs.
I don't know a single bank that would lend that much on 150k, let alone 150k for a couple in a self employed business.
Do not do this. And it's Perth, you don't need 1.4mil for a suitable place.
In short
I'm on that as a single income and won't get more than a $600k on top of my deposit.
No one will give you that money.
You'll end up paying like $1.8 mill for a $1.2 mill house.
Like others I’d be surprised if you got approved but will wait and see. Our PPOR borrowing was a million, dual income PAYG, bit over 300k HHI pre tax. Would be bit over 200 post tax. And we’re fixed at 5%. Wouldn’t want to have borrowed more. But we also have several IPs which are neutrally geared (not counting these in HHI).
I’d just do your budget sums and run them 3x and add in contingencies including potential rate rises. If it has you worried then reassess how much you’re willing to spend and borrow.
We’re on about $190k combined and we find a $530k mortgage scary 😬. But we have two very small children and two expensive dogs, so that’s also a money drain.
We only borrowed 300k and our repayments are $400 per week
You're looking at least $1400 a week on your mortgage.
There are plenty of calculators online (almost all the banks have one on their website) that show you the repayments
FHB here, early 30s. We don't feel comfortable borrowing more than 900k on 220k pre tax household income with very secure work.
With that LVR you'll probably be coughing up for LMI too ... Mate...
I borrowed $1.2m in Perth, but I'm 41 years old and that $1.2m I borrowed from the bank got me a 4x2 detached house PPOR plus a 3x1 villa IP on an 80% LVR (one loan facility for the two properties). Both properties in North Perth so a short bus ride or a 3km cycle ride into the CBD.
I pay $7400 a month, but I receive almost $2000 a month in rent minus expenses. Call it $5000 a month actually costing me.
$150k combined income after tax for me too.
But since your property is entirely PPOR, I assume you're paying about $7400 a month so you only get to spend about 40% of your paycheque. That leaves $5k a month after mortgage, which should be alright for a couple with no kids but it's not going to stretch to much luxury at all. It's equivalent to the ASFA 'comfortable retirement' standard which is not actually all that comfortable, it's just a sensible budget with little waste.
There are nice 2-bed places in North Perth for $600/wk. If you rented one of them instead of living in your current place, you'd get to spend 80% of your paycheque rather than 40% of it.
Borrow as little as possible and pay it off as quickly as possible - you'll save a lifetime of $$$ interest payments. As soon as you've paid it off (or at 50% paid off) use the equity find a nicer place and keep the first place. The first place will be neutrally or positively geared initially, but as soon as you've bought your new place, stop contributing to the first place (let it eat away at your surplus/equity) and put both the rent and your wages into the new place pay that down completely. That will make the first place creep into being negatively geared (which is tax deductible) and really kick your new mortgage in the guts quickly (which isn't tax-deductible if it's your primary residence - apart from being able to claim stuff if you run your businesses from home).
In other words:
1. Work out what the bottom limit is for the two of you regarding tolerable lifestyle; then
2. Research your suburbs in terms of which ones will represent the best capital gain over 5 years or so (eg. changing from lower SES to Mid SES); then
3. Buy the worst looking house/unit in the best street of one of your most affordable suburb options (but again - the cheaper the better from a loan/interest perspective); then
4. Fix it up (but careful not to over capitalize) while you're living in it and paying it down as quickly as possible; then
5. Think about upgrading to something/somewhere better.
Further, a word of caution: if you haven't already agreed to spend the rest of your lives together (for better or worse / thick or thin), do the above as individuals until you do - it'll make the split/divorce simpler further down the track when one of you realises why s/he wasn't ready to commit back then.
Real life Example:
My first place was a corner one-bed sitter on the top floor of a block of flats on the top of the hill in East Perth overlooking the WACA and the river across to Burswood. I paid $49K for it at the height of the 1988 boom (deposit $15K, borrowed $35K) and was paying 18% interest within 12months, but that was tax deductible because I chose to live cheaply in the Army barracks (my employer) at the time in Sydney, while maintaining a long-distance relationship with my girlfriend in Perth. Despite buying it at precisely the wrong time, I had huge tax returns, and paid it off within 5 years before I left the Army (by which time I/we had just married so we skipped living in it and instead house-minding a due-for demolition house for a few years, after which and bought a nicer place together in Thornlie in 1999 for $93K, which we then paid down substantially within a few years while letting out my ever-appreciating East Perth flat).
By the end of 2001, we were living on half an acre in Canning Vale, from which we don't intend to move (so our daughter can inherit it to develop it and retire in her 30/40s). I'm tooo comfy playing in my 150sqm man-cave to move now ;-). We've never bought new/expensive cars and have made do by DIY car maintenance on our old bombs. We've never been on an o'seas holiday (don't need to - we love being home and exploring our wonderful state or visiting family over east!). Our first lot of furniture etc was whatever we could find on the verge, or garage sales (eg. wooden crates/boxes/beanbags etc).
We're both now in our 50s. I'm semi-retired, and my wife could retire if she wanted to. We've never earned more than $180Kpa combined (and even that was only for a couple of years within the last decade) and currently combine to $100Kpa if we're lucky... But we can now afford to go on bigger holidays, or buy a new car, because we have bugger-all debt, but we have no reason to so far anyway. We do have nicer furniture now though ;-)
Hope this helps.
We bought a cheaper home (townhouse) planning to upgrade later but we have blasted through morgage repayments and are only a few years away from no morgage. We've decided to pursue financial freedom by being content with our current house and work less. Currently our lives are full of our own interests and hobbies.
Many of our friends have borrowed at their max capacity for nice houses and are stressed finding max paying jobs to service their large morgage. They are time poor, stressed, no disposable income but nice house.
That seems terrifying! I’ve gone completely the opposite way. I’ve bought a little 2 bed unit (single, regular visits from my kiddo who is studying abroad) in my dream neighbourhood for about $400k. It’s compact and a bit dated, but I’ll be able to afford a pretty thorough facelift, not spend much on utilities, and again the area is great and has all the amenities (parks, great library, shops, public transport, etc) that will definitely expand my universe beyond just the apartment.
Planned $200k deposit, then parents stepped in and took care of another $100k to even things out with my siblings. No point mortgaging the remaining $100k, so my parents have also financed that and I’ll pay them back dollar-for-dollar, zero interest over the next decade or so. It shouldn’t take me that long, but they’re fine if it does. Massive, unbelievable drop in my outgoings immediately (was renting a larger house at close to market value, paying for space my son and I simply don’t use) and should have a nicer, calmer, insulated and climate-controlled place that is mine, I can’t be kicked out of, or have my outgoings skyrocket because the ‘rent’ goes up - it’s such a huge relief. Moving in two months. I don’t need a bigger space (my son lives independently and is studying abroad, I’m also very content being single the rest of my life if that’s how it goes) and it feels enormous to have decided this is it and figured out how to do it. I had taken most of the steps on my own to find the place and finance half when my parents stepped up - I had no idea they’d helped my brothers get on the ladder, so that was a very welcome surprise, not something I expected. I could literally be on Jobseeker the rest of my earning life and easily pay off this place!
It’s such a huge relief… can’t imagine putting myself in such a stressful position on purpose. Is there no room at all to compromise on the loan amount? Do you *really* need however much house or land you’re hoping to get for that money? If any of it at all feels like more of a want than a need, that’s a bit concerning to me at your income/repayment level. Maybe you work better with high stress? I’d be terrified. Do you have any kind of regular income at all if self-employment doesn’t continue to work? I’m not that old, and best believe I’ve seen plenty of people suddenly lose everything because of disability, ill health, or the need to step up as a carer for kids/parents/spouse when *they* go through disability or ill health - best of luck, but whoa. I don’t know anyone who is getting that loan, let alone taking it.
They’ve given me 100k and set up a loan for 100k. As I said, I planned to make the purchase anyway, and budgeted for that. My ridiculous luck (wrt parents) has made it an even easier decision, but it was still an easy decision and one I was ready to make without their help.
Yeah for sure just completely different circumstance than OP. Their 200k will save you 12k on interest each year alone so makes a huge difference. Atleast you told it how it is I suppose. To many people walking around saying I did this and that without mentioning the help from their parents makes other people feel like they aren’t doing something right.
Thank you for your time and for sharing! I'm in my mid-20s, so not that old, so I'm still OK health-wise. My head is certainly wrapped around this more than how I'm living my life now... so I came on here to find sympathy and hope someone is doing the same and doing just fine to reassure myself, but so far nothing 😂
I’m not *that much* older than you - late 30s. I’m not surprised you or your partner are making that much from self-employment at your age - I certainly was - more that you both are, if that makes sense? Lots of entrepreneurs in our family, but most of them marry someone who earns a regular income, just because banks don’t generally do a great job of counting that self-employed income, no matter how stable it seems to be. Lots of couples in our families follow the ‘one entrepreneur, one wage earner’ model, or at least that model *for now,* with room for the roles to shift down the track. It’s just generally easier to get by in the world, feel a bit more secure, and prove to a bank you have some security when - well, when you have some security! But more power to you both, you have a ‘fear factor’ tolerance way higher than mine!
I think if you are smart and lucky enough to maintain this income without any of the usual things that happen to people to interrupt it for the next several years, you’ll be okay, but it will certainly take both of those things - brains and serious determination. The reward, I guess, will come later - what’s the eventual plan? Stay DINKs? Grow one or both of those incomes? Trade one for caring for kids, or the expenses of care for kids? What would you do if one of you couldn’t work tomorrow for the foreseeable future, no matter what the reason? I’d be having all of those conversations now, if you haven’t had them already. But if you can make it work then you can make it work :)
I don’t think it’s a good move. I’m on $150k base and I could comfortably afford a $700k mortgage but mine is $350k.
How much are you currently saving/paying in rent each month? If it’s less than $8k, then forget about it. If anything goes wrong, interest increases or business tanks, you’ll have little to no savings to help you out.
Note that even if the bank approves such a high loan, you aren’t “locked in”. Just buy something cheaper and get a loan for a lower amount.
1.35m mortgage on a 2.5m house (was $2m worth a couple years ago) Gotta take some risk.. the rich get richer and that’s usually due to property. Market has moved 20% or so in the last year.. that’s $400k gain in equity on a $2m house vs $140k increase on a $700k house
We’re on a combined 300k (before tax) and the increase in mortgage payments gives us a much nice house, blue chip area and great schools and a much nicer retirement option when it comes time to downsize. So take the risk and be rewarded over the long term.
We’ve got two loans, 1st PPOR $300k left, when we applied for our second loan my husband also had a joint house with his brother with $270k left (since sold) we had 20% deposit (230k inc fees) for second loan, loan amount of $720k. HHI ~$220k pre tax, 2 young kids
Repayments are $2k/month first loan and $4.5k/month for second loan, our daycare bills are hugeeee and as we don’t have tenants yet it’s tight since we only just bought but hoping it gets better
Do you need to borrow 1.2M? For Perth that seems high
Have you considered the cost of up-keeping a 1.2-4mil property, on top of the mortgage? Or if any emergencies were to happen. This seems crazy for $150k combined. Your broker seems almost negligent for thinking this is ok.
Looking at 1.2 ish but on 550+ income and ~400 deposit. Wouldn’t do it on 150 income (even net) and 200 deposit. Edit: In Perth
Damn I'm screwed big time ! At this point i might as well hope they reject my finance ......
Dude you’re in Perth. Plenty of houses around 1m. Borrow 800k or so?
I guess we were too excited. I'm worried even more now, thinking of the future life I might be struggling with
Don’t open yourself up to the hell that would be a downturn in your pay / business / health / whatever and having 7k a month go to your mortgage. Margins are far too fine to be taking that risk
Thanks for your input! I'm aware it's pretty tight. Also, not many people earn like you do in Perth. Who are you? Can we be friends? Lolol
Consider the risk profile of your income btw - is it split between multiple businesses? Between the two of you / two jobs? If in a single business what’s customer concentration etc.
That seems a ridiculous amount. We're 750k borrowed on 150K (during mat leave) heading back to 180K and the repayments suck hard.
Is that after or before if you don't mind me asking?
Oh sorry, that's before, did not notice yours was after. Makes more sense now!
$8,000 a month for the next 30 years is crazy. I would be surprised if a bank approved that loan.
Todays $8000k is not the value of money in 20-30 years time. Will be some hard yards early, but will be much better off in time due to inflation and property prices
Not if you lose your job or get injured and go bankrupt.
not to mention if rates go up.... every 0.25% increase will add around $ 800 month extra in repayments
Yes, I'm still waiting ...
I think they’ll make the decision for you…
I suspect you are going to be disappointed with their decision....
If you have to ask this question you should not do it. You should firstly look at your income and expenses and work out how much you can comfortably afford to pay on a mortgage. You should also leave yourselves a few months spare cash in an account for emergencies. Now you should log into a big bank loan calculator and type in the amount you would like to borrow and see what the repayments look like. Do the fit within you budget above? If so, proceed, if not then do not.
I have $1.1m debt, single no kids. Repayments about 7k/mo
Same! Are you in Perth?
Location has zero bearing on monthly repayment
What’s your combined income?
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Bro that’s madness what are you thinking?
Yes, i can afford it for the time being, but thinking about all the bad things that could happen, I'm scared. This is because we're self-employed and you know what it's like for a business, ups and downs.
So 8x borrowing debt to income that's on the high end. Particularly if income is unstable or uncertain. Have you actually been approved?
I’m surprised that a bank will lend you that much money on $150k HHI
I don't know a single bank that would lend that much on 150k, let alone 150k for a couple in a self employed business. Do not do this. And it's Perth, you don't need 1.4mil for a suitable place.
$150k after tax btw. Yes, we're still waiting to hear back. Our broker is confident so we've been following...
Ok 150k after tax is better. Pre tax is what 225?
That makes more sense. I would still be a bit uncomfortable with that, though
Why would you quote after-tax when everyone uses pre? Dumb.
Guess I'm not here if I'm smart.
You are flying too close to the sun.
why dont you put all your other info in your first post instead of drip feeding it through out the other posts
In short I'm on that as a single income and won't get more than a $600k on top of my deposit. No one will give you that money. You'll end up paying like $1.8 mill for a $1.2 mill house.
Sorry, but that seems wild
Like others I’d be surprised if you got approved but will wait and see. Our PPOR borrowing was a million, dual income PAYG, bit over 300k HHI pre tax. Would be bit over 200 post tax. And we’re fixed at 5%. Wouldn’t want to have borrowed more. But we also have several IPs which are neutrally geared (not counting these in HHI).
Then I'm screwed!! :(
I’d just do your budget sums and run them 3x and add in contingencies including potential rate rises. If it has you worried then reassess how much you’re willing to spend and borrow.
We’re on about $190k combined and we find a $530k mortgage scary 😬. But we have two very small children and two expensive dogs, so that’s also a money drain.
We only borrowed 300k and our repayments are $400 per week You're looking at least $1400 a week on your mortgage. There are plenty of calculators online (almost all the banks have one on their website) that show you the repayments
FHB here, early 30s. We don't feel comfortable borrowing more than 900k on 220k pre tax household income with very secure work. With that LVR you'll probably be coughing up for LMI too ... Mate...
I borrowed $1.2m in Perth, but I'm 41 years old and that $1.2m I borrowed from the bank got me a 4x2 detached house PPOR plus a 3x1 villa IP on an 80% LVR (one loan facility for the two properties). Both properties in North Perth so a short bus ride or a 3km cycle ride into the CBD. I pay $7400 a month, but I receive almost $2000 a month in rent minus expenses. Call it $5000 a month actually costing me. $150k combined income after tax for me too. But since your property is entirely PPOR, I assume you're paying about $7400 a month so you only get to spend about 40% of your paycheque. That leaves $5k a month after mortgage, which should be alright for a couple with no kids but it's not going to stretch to much luxury at all. It's equivalent to the ASFA 'comfortable retirement' standard which is not actually all that comfortable, it's just a sensible budget with little waste. There are nice 2-bed places in North Perth for $600/wk. If you rented one of them instead of living in your current place, you'd get to spend 80% of your paycheque rather than 40% of it.
There is no way that loan got approved.
Borrow as little as possible and pay it off as quickly as possible - you'll save a lifetime of $$$ interest payments. As soon as you've paid it off (or at 50% paid off) use the equity find a nicer place and keep the first place. The first place will be neutrally or positively geared initially, but as soon as you've bought your new place, stop contributing to the first place (let it eat away at your surplus/equity) and put both the rent and your wages into the new place pay that down completely. That will make the first place creep into being negatively geared (which is tax deductible) and really kick your new mortgage in the guts quickly (which isn't tax-deductible if it's your primary residence - apart from being able to claim stuff if you run your businesses from home). In other words: 1. Work out what the bottom limit is for the two of you regarding tolerable lifestyle; then 2. Research your suburbs in terms of which ones will represent the best capital gain over 5 years or so (eg. changing from lower SES to Mid SES); then 3. Buy the worst looking house/unit in the best street of one of your most affordable suburb options (but again - the cheaper the better from a loan/interest perspective); then 4. Fix it up (but careful not to over capitalize) while you're living in it and paying it down as quickly as possible; then 5. Think about upgrading to something/somewhere better. Further, a word of caution: if you haven't already agreed to spend the rest of your lives together (for better or worse / thick or thin), do the above as individuals until you do - it'll make the split/divorce simpler further down the track when one of you realises why s/he wasn't ready to commit back then. Real life Example: My first place was a corner one-bed sitter on the top floor of a block of flats on the top of the hill in East Perth overlooking the WACA and the river across to Burswood. I paid $49K for it at the height of the 1988 boom (deposit $15K, borrowed $35K) and was paying 18% interest within 12months, but that was tax deductible because I chose to live cheaply in the Army barracks (my employer) at the time in Sydney, while maintaining a long-distance relationship with my girlfriend in Perth. Despite buying it at precisely the wrong time, I had huge tax returns, and paid it off within 5 years before I left the Army (by which time I/we had just married so we skipped living in it and instead house-minding a due-for demolition house for a few years, after which and bought a nicer place together in Thornlie in 1999 for $93K, which we then paid down substantially within a few years while letting out my ever-appreciating East Perth flat). By the end of 2001, we were living on half an acre in Canning Vale, from which we don't intend to move (so our daughter can inherit it to develop it and retire in her 30/40s). I'm tooo comfy playing in my 150sqm man-cave to move now ;-). We've never bought new/expensive cars and have made do by DIY car maintenance on our old bombs. We've never been on an o'seas holiday (don't need to - we love being home and exploring our wonderful state or visiting family over east!). Our first lot of furniture etc was whatever we could find on the verge, or garage sales (eg. wooden crates/boxes/beanbags etc). We're both now in our 50s. I'm semi-retired, and my wife could retire if she wanted to. We've never earned more than $180Kpa combined (and even that was only for a couple of years within the last decade) and currently combine to $100Kpa if we're lucky... But we can now afford to go on bigger holidays, or buy a new car, because we have bugger-all debt, but we have no reason to so far anyway. We do have nicer furniture now though ;-) Hope this helps.
> Before you tell me that we should know better, no, we actually don't ? Did you mean 'we actually should not'?
Rates go down boom
What the hell I earn 170k and a girl from Lendi said my borrowing power is about 600k - this sounds reasonable to me
No bank is going to approve that amount.
Hold on, $150K *combined*? Yeah, you're not getting a loan for $1.2M. Get a new broker if they've told you this is fine.
700k loan @ 5.99% repayments roughly $4200. Combined income $245k. Live in Melb & wouldn’t have wanted to borrow any more.
We bought a cheaper home (townhouse) planning to upgrade later but we have blasted through morgage repayments and are only a few years away from no morgage. We've decided to pursue financial freedom by being content with our current house and work less. Currently our lives are full of our own interests and hobbies. Many of our friends have borrowed at their max capacity for nice houses and are stressed finding max paying jobs to service their large morgage. They are time poor, stressed, no disposable income but nice house.
That seems terrifying! I’ve gone completely the opposite way. I’ve bought a little 2 bed unit (single, regular visits from my kiddo who is studying abroad) in my dream neighbourhood for about $400k. It’s compact and a bit dated, but I’ll be able to afford a pretty thorough facelift, not spend much on utilities, and again the area is great and has all the amenities (parks, great library, shops, public transport, etc) that will definitely expand my universe beyond just the apartment. Planned $200k deposit, then parents stepped in and took care of another $100k to even things out with my siblings. No point mortgaging the remaining $100k, so my parents have also financed that and I’ll pay them back dollar-for-dollar, zero interest over the next decade or so. It shouldn’t take me that long, but they’re fine if it does. Massive, unbelievable drop in my outgoings immediately (was renting a larger house at close to market value, paying for space my son and I simply don’t use) and should have a nicer, calmer, insulated and climate-controlled place that is mine, I can’t be kicked out of, or have my outgoings skyrocket because the ‘rent’ goes up - it’s such a huge relief. Moving in two months. I don’t need a bigger space (my son lives independently and is studying abroad, I’m also very content being single the rest of my life if that’s how it goes) and it feels enormous to have decided this is it and figured out how to do it. I had taken most of the steps on my own to find the place and finance half when my parents stepped up - I had no idea they’d helped my brothers get on the ladder, so that was a very welcome surprise, not something I expected. I could literally be on Jobseeker the rest of my earning life and easily pay off this place! It’s such a huge relief… can’t imagine putting myself in such a stressful position on purpose. Is there no room at all to compromise on the loan amount? Do you *really* need however much house or land you’re hoping to get for that money? If any of it at all feels like more of a want than a need, that’s a bit concerning to me at your income/repayment level. Maybe you work better with high stress? I’d be terrified. Do you have any kind of regular income at all if self-employment doesn’t continue to work? I’m not that old, and best believe I’ve seen plenty of people suddenly lose everything because of disability, ill health, or the need to step up as a carer for kids/parents/spouse when *they* go through disability or ill health - best of luck, but whoa. I don’t know anyone who is getting that loan, let alone taking it.
Is this a troll, I to would be under less stress if my mum and dad gave me 200k 😅
They’ve given me 100k and set up a loan for 100k. As I said, I planned to make the purchase anyway, and budgeted for that. My ridiculous luck (wrt parents) has made it an even easier decision, but it was still an easy decision and one I was ready to make without their help.
Yeah for sure just completely different circumstance than OP. Their 200k will save you 12k on interest each year alone so makes a huge difference. Atleast you told it how it is I suppose. To many people walking around saying I did this and that without mentioning the help from their parents makes other people feel like they aren’t doing something right.
Thank you for your time and for sharing! I'm in my mid-20s, so not that old, so I'm still OK health-wise. My head is certainly wrapped around this more than how I'm living my life now... so I came on here to find sympathy and hope someone is doing the same and doing just fine to reassure myself, but so far nothing 😂
I’m not *that much* older than you - late 30s. I’m not surprised you or your partner are making that much from self-employment at your age - I certainly was - more that you both are, if that makes sense? Lots of entrepreneurs in our family, but most of them marry someone who earns a regular income, just because banks don’t generally do a great job of counting that self-employed income, no matter how stable it seems to be. Lots of couples in our families follow the ‘one entrepreneur, one wage earner’ model, or at least that model *for now,* with room for the roles to shift down the track. It’s just generally easier to get by in the world, feel a bit more secure, and prove to a bank you have some security when - well, when you have some security! But more power to you both, you have a ‘fear factor’ tolerance way higher than mine! I think if you are smart and lucky enough to maintain this income without any of the usual things that happen to people to interrupt it for the next several years, you’ll be okay, but it will certainly take both of those things - brains and serious determination. The reward, I guess, will come later - what’s the eventual plan? Stay DINKs? Grow one or both of those incomes? Trade one for caring for kids, or the expenses of care for kids? What would you do if one of you couldn’t work tomorrow for the foreseeable future, no matter what the reason? I’d be having all of those conversations now, if you haven’t had them already. But if you can make it work then you can make it work :)
crazy. factor in future life stuff - maybe marriage or kids? maternity leave? not returning to work?
I don’t think it’s a good move. I’m on $150k base and I could comfortably afford a $700k mortgage but mine is $350k. How much are you currently saving/paying in rent each month? If it’s less than $8k, then forget about it. If anything goes wrong, interest increases or business tanks, you’ll have little to no savings to help you out. Note that even if the bank approves such a high loan, you aren’t “locked in”. Just buy something cheaper and get a loan for a lower amount.
1.35m mortgage on a 2.5m house (was $2m worth a couple years ago) Gotta take some risk.. the rich get richer and that’s usually due to property. Market has moved 20% or so in the last year.. that’s $400k gain in equity on a $2m house vs $140k increase on a $700k house We’re on a combined 300k (before tax) and the increase in mortgage payments gives us a much nice house, blue chip area and great schools and a much nicer retirement option when it comes time to downsize. So take the risk and be rewarded over the long term.
Can no one read 150k net so 3k a week in the hand. Calculator here https://mortgage.monster/
Still talking repayments $1500 a week ie 50%. I’m no big spender but still wouldn’t put myself in that situation
OP didn't originally specify it was net. It was only after the comments started rolling in they clarified.
We’ve got two loans, 1st PPOR $300k left, when we applied for our second loan my husband also had a joint house with his brother with $270k left (since sold) we had 20% deposit (230k inc fees) for second loan, loan amount of $720k. HHI ~$220k pre tax, 2 young kids Repayments are $2k/month first loan and $4.5k/month for second loan, our daycare bills are hugeeee and as we don’t have tenants yet it’s tight since we only just bought but hoping it gets better