I know this is going to sound crazy to many people, but I am looking forward to moving into our new house because the mortgage will set me ‘free’. For a bit of background here, after I came back from Darwin in late 2013, Frankie and I discussed that we should start looking for a home - No rush - just start looking. Frankie found a new development online that allowed a 5% down and pay on completion. Sure it was small - roughly 50sq mts total for a two bedroom townhouse with small court yard and balcony. But for me it was the financial costs that really did it for me. We decided just going for a look -just a look. Within 5 mins talking to the sales agent and seeing the documents we had signed a document promising to pay the 5% by the end of the week… we just brought a house within 15 mins.. Scary.
Coming back to the question of finance. We had the 5% to put down immediately and were required to pay the remaining 95% on completion (Nov 2014, roughly 11-12 Months away at the time). Speaking to the bank and running the figures works out cheaper than the rent for our 2 br apartment with orange lament bench tops, laundry in our bathroom type. The new house is less than 6 mins from our old house. Unlike many first home buyers we are looking increasingly likely to being able to beat the 20% total deposit requirement on the ‘Lenders Mortgagee Insurance (LMI). Which is essentially a higher risk fee payable to the bank due to not having a huge deposit. The difference is about $200 fortnight. This is huge. The key here is that our home is cheap comparatively. You get what you pay for, I know this. despite being a 2 bedroom townhouse, it would be squishy with 2 couples - Frankie and I plus spare room sounds much better.
Coming back to being ‘free’ with a mortgage - the freedom to me is the stability budget wise. I know what my repayments are going to be for the next 3-5 years, even leaving some wiggle room for a few rate raises too.