16 October 2019

Making the transition from rent to mortgage

Vic Lorusso
Share

Just under a third of Australians rent their home while just over a third own their own property with a mortgage. If you’re about to transition from renting to home ownership – congratulations! But before you pop the bubbly, you need to make sure you’re ready to make the change. Here’s what you can expect.

GET READY FOR FORCED SAVINGS
One of the best things about paying a mortgage is that you’re forced to save. Your repayment will come out of your account every month and a portion will go toward paying your loan’s principal, in turn increasing your net worth. It’s just like being forced to save and at the end of it you have an amazing asset!

When all that money’s flowing out of your account, it can be tough to save more, but it’s worth it. If you repay your mortgage just a year or two faster, you could save tens of thousands of dollars (all of which can go toward much better stuff than interest, like reno’s and holidays).

EXPECT EXTRA COSTS
Buying and owning a house costs more than just the deposit and the mortgage repayments. Don’t forget about:

  • Stamp duty: up to $20,000+ but may be free for some first home buyers.
  • Conveyancing fees: roughly $500 to $2,200.
  • Building inspection: $250 to $500+.
  • Moving costs: $0 to $3,000 within Australia (more if it’s a big move interstate).
  • Mortgage application fees: roughly $500.
  • Council rates: from $1,500 to $3,000 a year.
  • Home and contents insurance: $1,000 to $1,600.
  • Home maintenance: Rule of thumb says 1% of property value, so $5,000/year in a $500,00 house.

When you’re a homeowner, it’s always best to keep a cash buffer in a savings account, just in case an unexpected cost comes up. That way you’ll never miss a mortgage repayment, no matter what happens.

GET ON THE TOOLS
If anything breaks, there’s no landlord to fix it – just you. And unless you live in a brand-new property, there’s a good chance you’ll have to do a little work to repair and maintain it – making now the perfect time to learn a few DIY skills.

Do some Googling and watch YouTube how-to videos (there are thousands to choose from) before you call in a tradie. Unless it’s a huge job or it’s electrical or plumbing work, there’s a good chance you’ll be able to do it yourself with a little practice.

ENJOY THE CERTAINTY AND LOOK TO THE FUTURE
The best thing about owning your own home is the stability. Provided you can make the mortgage repayments, you can stay in your new home for as long as you like. There’s no landlord doing inspections every three months or putting up the rent every year. You have your own space and your mortgage repayments won’t increase unless interest rates go up (and even so, you’re protected if you’re on a fixed rate loan).

This stability and certainty makes it easier to plan for your future. Whether you want to advance in your career, travel the world, have kids and start a family or just adopt a puppy and a couple house plants – it’s up to you because it’s YOUR house!

Other Articles

  • 10 October 2019 - Adrian Atelj
    4 things first home buyers need to know
  • 9 October 2019 - Adrian Atelj
    4 tips for planning success when selling
  • 18 December 2019 - Vic Lorusso
    4 Tips to Consider When Selecting a Builder
  • 19 April 2022 - Danielle Redford
    Key questions to ask before buying a home
  • 15 December 2019 - Adrian Atelj
    8 Must Haves When Choosing A Rental Property
  • 19 April 2022 - Danielle Redford
    How to make a winning rental application
  • 16 October 2019 - Adrian Atelj
    8 tips for negotiating with selling agents
  • 7 October 2019 - Adrian Atelj
    A guide to buying at auction
  • 5 October 2019 - Vic Lorusso
    Adding a pool: will it add value?
  • 4 October 2019 - Adrian Atelj
    Are property managers worth the cost?
  • 24 November 2019 - Adrian Atelj
    Beginner’s Guide to Starting a Veggie Garden
  • 25 March 2022 - Danielle Redford
    Breaking a Lease with your Landlord Early
  • 18 April 2022 - Emma McLaren
    Understanding your home’s useable equity
  • 9 May 2022 - Danielle Redford
    How to flip property in Australia
  • 15 October 2019 - Adrian Atelj
    Gaining the mindset of a successful investor
  • 5 April 2022 - Danielle Redford
    Homeownership in 2022: Costs of Buying a House
  • 9 October 2019 - Vic Lorusso
    Hot interior styling trends for 2020
  • 12 March 2022 - Danielle Redford
    Your guide to different house types
  • 12 March 2022 - Danielle Redford
    Conveyancing: a cheat-sheet guide
  • 19 April 2022 - Emma McLaren
    How long does it take to build a new home?
  • 12 March 2022 - Danielle Redford
    How much deposit do you need to buy a home?
  • 9 May 2022 - Emma McLaren
    How much does a new kitchen cost?
  • 12 March 2022 - Danielle Redford
    What's the average cost to build a home in 2022?
  • 9 May 2022 - Danielle Redford
    The value of building an extra bedroom
  • 5 April 2022 - Danielle Redford
    How to make the most of negative gearing
  • 19 April 2022 - Emma McLaren
    How to buy property through private sale
  • 2 October 2019 - Adrian Atelj
    How to choose an investment property
  • 9 May 2022 - Danielle Redford
    How to determine the value of a home
  • 6 October 2019 - Adrian Atelj
    How to get your property ready for sale
  • 2 October 2019 - Adrian Atelj
    How to increase your return on investment
  • 5 April 2022 - Emma McLaren
    Stress-free interstate migration
  • 4 January 2020 - Adrian Atelj
    How to Negotiate a Lower Rent and Save Big
  • 24 December 2019 - Vic Lorusso
    How To Use Plants for Shade and Privacy
  • 28 November 2019 - Vic Lorusso
    Is a Low Deposit Loan Right for You?
  • 12 March 2022 - Danielle Redford
    Is It Worth Hiring a Buyer's Agent?
  • 7 October 2019 - Adrian Atelj
    How to style your home and wow your buyers!
  • 12 March 2022 - Danielle Redford
    Making an offer on a house in 2022
  • 16 October 2019 - Vic Lorusso
    Making the transition from rent to mortgage
  • 9 October 2019 - Adrian Atelj
    Market falling? Here’s what to do
  • 4 November 2019 - Vic Lorusso
    Mortgage Cashback: What’s the Catch?
  • 19 April 2022 - Emma McLaren
    How to negotiate a home purchase price
  • 15 October 2019 - Vic Lorusso
    Nine top tips for buying off the plan
  • 1 November 2019 - Adrian Atelj
    November Monthly Market Overview
  • 18 April 2022 - Emma McLaren
    Your Complete Pre-Settlement Checklist
  • 19 April 2022 - Danielle Redford
    How to prepare your home for the rental market
  • 24 December 2019 - Adrian Atelj
    Propagating Indoor House Plants with Water
  • 12 March 2022 - Danielle Redford
    Rent-to-own your own home schemes
  • 9 May 2022 - Danielle Redford
    Checklist for a rental inspection
  • 10 November 2019 - Adrian Atelj
    Storage Hacks for Babies and Toddlers
  • 25 March 2022 - Emma McLaren
    Using Super to Buy a Property
  • 19 April 2022 - Danielle Redford
    Essential tools for DIY home renovations
  • 16 October 2019 - Adrian Atelj
    The attraction of apartment living
  • 5 October 2019 - Pat Carbone
    The home buyer’s guide to stamp duty
  • 9 May 2022 - Danielle Redford
    How to carry out an end of lease cleaning
  • 14 October 2019 - Adrian Atelj
    Tips for keeping pets safe outside your home
  • 26 December 2019 - Adrian Atelj
    Top 10 Indoor House Plants
  • 3 October 2019 - Adrian Atelj
    Top tips for picking your ideal suburb
  • 19 April 2022 - Emma McLaren
    Which Property Type Should You Buy?
  • 9 May 2022 - Danielle Redford
    What you need to know about stamp duty
  • 19 April 2022 - Danielle Redford
    What’s the purpose of a sunset clause?
  • 10 October 2019 - Adrian Atelj
    Understanding supply and demand
  • 25 March 2022 - Emma McLaren
    What is a Granny Flat?
  • 9 May 2022 - Emma McLaren
    What is a private rental?
  • 19 April 2022 - Danielle Redford
    Buying a Property Under a Private Treaty Sale
  • 12 March 2022 - Danielle Redford
    Property Valuations and How They are Calculated
  • 14 October 2019 - Adrian Atelj
    What to look for when inspecting a property
  • 9 May 2022 - Emma McLaren
    A Guide to building a granny flat
  • 27 November 2019 - Pat Carbone
    When is the Best Time of Year to Sell?
  • 9 May 2022 - Danielle Redford
    I want to sell my home; where do I start?
  • 6 October 2019 - Vic Lorusso
    Which property costs are tax-deductible?
  • 10 October 2019 - Adrian Atelj
    Why selling your home is taking longer
  • 183 of 183 articles
    Copyright © 2021 Homes.com.au Limited. All rights reserved.