Ways To Reduce Your Home Loan
Reducing the Average Melbourne Home Loan Size
Currently, home loan mortgage rates are low. This may not be the case in the future. If possible the best idea is to pay off as much of your home as possible. Try and resist making large financial purchases if you can avoid this. Items such as cars, renovations and expensive holidays can be delayed if they are not a priority. There is a certain amount of relief and satisfaction once you own your castle.
Create a list that includes your spending. Break this list down to –
- Fixed payments such as car rego, internet access, phone
- Get your bills for electricity, gas, water rates and take an annual average
- Look at your credit card and see what expenses you have in relation to social activities
- Itemise all your costs and identify where you can save money
Creating a list will identify how you spend your money. It may surprise you on how much you spend unnecessarily. Once you have this list you can set about shaving off the expenses you can live without. It’s usually the small items that that collectively add up without you really noticing. The trap of the credit card is you don’t feel like you are paying. Instead of using your credit card give yourself a fixed amount of cash. Use this to make all your purchases.
With so many home loan products in the market, we suggest you contact an independent financial advisor. There is not one solution that fits all. A short consultation could save you a lot of money. Or demonstrate ways in which you can effectively channel your income.
Are you struggling to meet your home loan Repayments?
The latest mortgage analysis indicates approximately 920,000 Australian households were feeling the weight of their home loan. These numbers are climbing from the previous month’s data by over 10,000. This means that on average 29.7% of Australian households are under the stress of their mortgage.
There has been a significant rise in Australian households that are feeling the extreme impact of their mortgage repayments. The numbers show that there are 24,000 homes in the high-risk category which has risen from 3000. The majority of these are in Victoria and New South Wales. New South Wales is the leading state that has the most number of home lenders that are struggling.t
The rise in home loans that are under stress is a worry considering the low rates that are on offer. More than ever lenders are making the minimum repayments on their home loan.
Data that was compiled by one of Australia’s largest banks indicated that repayments in capital cities varied from $1,500 to over $3,000. The average monthly repayment in Sydney stands at $3,031 per month. The monthly repayments in Hobart are $1,587. On average the monthly repayments in Adelaide are $1,971. The average monthly mortgage payment made in these cities were 19.4% and 21.9% of household disposable income (HDI) respectively, whereas Sydney was close to 27%. In Melbourne, average monthly mortgage repayments are $2649. The percentage of household income is 28.2%.
Minimum Average Earnings Needed in Victoria to Cover Average Mortgage Costs.
Median Home Price
- $723,334 Required annual earnings $104,643*
Median Unit Price
- $575,204 Required annual earnings $86,436*
*These figures are based on an interest rate of 5.61% p.a. and a 20% deposit. Today, the average standard variable home loan rate for many lenders hovers around 4.00%.