Budget Planner
Can you comfortably afford a mortgage on top of your current expenses?
Knowing your borrowing power is one thing. Knowing whether you can actually live comfortably with the repayments is another. Start here.
How does it work?
A budget planner maps your monthly income against your regular expenses to show you what is left over. When you add a potential mortgage repayment to your expense column, you can see immediately whether the numbers work comfortably, tightly, or not at all. Lenders do their own version of this when assessing your loan application. Understanding your own budget before you apply means no surprises.
The calculator has been provided in good faith as a guidance tool only. Results are not financial advice, are a guide only, and are not a guaranteed outcome or quote. Borrowers should always discuss their individual situation with an Australian Credit Licensee or authorised Credit Representative.
The expenses people commonly forget to include
Body corporate or strata fees
If buying an apartment or townhouse, these can be significant and are often overlooked in budget planning.
Council rates and water rates
As a homeowner you pay these directly rather than through your rent.
Home and contents insurance
Required by lenders as a condition of most home loans and often more expensive than renters insurance.
Maintenance and repairs
A rough guide is to budget around 1% of the property value per year for maintenance, though this varies significantly.
Buffer
A mortgage is a long-term commitment. Budget with enough breathing room that you could manage if your income reduced or an unexpected expense arrived.
Building a budget that actually works
• Use your real spending, not what you think you spend. Check your bank statements for the last 3 months to get accurate figures.
• Add the mortgage repayment to your current expenses and see what remains. If it is very tight, consider whether a smaller loan or a longer saving period makes sense.
• Remember that some expenses will change when you move. You may save on rent but gain rates, insurance, and maintenance costs.
• Lenders assess your expenses as part of your loan application. Having a realistic budget helps you present an accurate picture.
Budget related questions we get asked a lot
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Yes. Lenders assess your declared living expenses as part of the serviceability calculation. They compare your declared expenses against benchmark figures and use the higher of the two. Being honest and accurate about your expenses is important.
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There is no single right answer. As a rough guide, most financial advisers suggest being able to cover 3 months of expenses from savings and having meaningful room in your monthly budget beyond your repayments. A lender's stress test also checks you could manage repayments at a higher rate than today's.
Want to make sure your budget makes sense before you apply?
Book a discovery call and we will help you determine if you are in a position to enter the property market.