To­day’s home­own­ers less bur­dened by debt

The Weekend Post - Real Estate - - Front Page - BIANCA KEEGAN AND SO­PHIE FOS­TER

“The RBA’s of­fi­cial cash rate in Au­gust 2016 of 1.5 per cent is only one quar­ter of the 6 per cent rate in Au­gust 2006 and an even smaller frac­tion of the 7 per cent cash rate of Au­gust, 1996.”

Cairns Post reader Sarah Cum­mings re­mem­bers the days of sky­rock­et­ing rates.

“We suf­fered on 17.5 per cent rates years ago and man­aged on one wage and one child,” she wrote on the Cairns Post Face­book page this week.

Tak­ing out a loan of 80 per cent of the cost of the av­er­age house in 1991 meant a mort­gage of $96,000 at an in­ter­est rate of 18 per cent.

The an­nual in­ter­est ex­pense would have been j ust over $17,000.

To­day, the an­nual in­ter­est

We bought and love the low in­ter­est rates.

There are cheap houses out there, es­pe­cially if it’s your first home. You don’t have to pay a high price.

We have had to go out­side of Cairns to buy, far too ex­pen­sive. It’s the re­pay­ments that scared us away! cost on the av­er­age house, bor­row­ing 80 per cent of the cost at 3.85 per cent, comes in at just over $15,000.

The HIA data found that de-

We moved to and bought a place in Cairns be­cause it’s way cheaper than Perth. The house we bought was last sold for $80k ... in 2003! It is well above that now! But there are still bar­gains out there, we stuck to a bud­get we were com­fort­able with. High prices are a huge put off. spite re­cent price gains, the mort­gage re­pay­ment bur­den is lower than its 15-year av­er­age across the ma­jor­ity of Aus­tralian cities, ex­cept Syd­ney.

Cairns res­i­dent Rhonda Doyle said she moved to Cairns from Western Aus­tralia for more af­ford­able hous­ing, while lo­cal Jade O’Reilly said she is mak­ing the most of low in­ter­est rates to pay off her prop­erty.

“We bought a four-bed­room house for un­der 300,000 three years ago. Bar­gain. Cheap houses are out there,” Ms Doyle wrote.

Ms O’Reilly said she and her hus­band pur­chased their first home two years ago.

“We pur­chased within our means,” Ms O’Reilly said.

“Low in­ter­est rates have been amaz­ing for us, we’ve thrown ev­ery cent we have onto our mort­gage and will have it paid off ex­actly three years to the day of when we bought it.”

KICKER HERE: Record-low in­ter­est rates mean it’s eas­ier to pay off a home to­day com­pared to 25 years ago.

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