First Home Buyers
Our team have been working with a number of first home buyers this year. So we thought we would take a look at buying vs leasing real estate in Sutherland in the current market. For those of you that have been tuning in to our Quarterly Market Round Up you will be familiar with the current government incentives. These are the Federal First Home Loan Deposit Scheme and the State First Home Buyers Assistance Scheme. If you’d like to know a more, watch our April 2020 update below or click here.
Hill & Viteri Property Agent Calculating buying vs leasing
In Focus 22/538 President Ave, Sutherland
Hill & Viteri Property Listing in Sutherland
Case Study for Buying vs Leasing
For this case study we will be using our recently sold property, 22/538 President Avenue Sutherland. Daniella Wild from our team has put together the following comparison for those contemplating buying their first home as opposed to leasing.
This comparison takes on the assumption that the buyer has a 5% deposit in this instance, being $27,750. Using the First Home Buyer Deposit Scheme the government would guarantee the remaining 15% of the deposit. This would allow a first home buyer to purchase with a 95% LVR (loan to value ratio). Post the banking royal commission this had been taken off the table but that is a topic for a different post.
So, having a total of $527,251 remaining, weekly repayments on this loan at 2.9% would be $506 weekly or $2,195 per month.
As part of the First Home Buyers Deposit Scheme LMI (loan mortgage insurance) is not applicable which based of these figures is a saving of approximately $20,000. This purchase is also below $650,000 meaning first home buyers would not have to pay any stamp duty providing a further $20,694 in savings.
The Conclusion
Taking all the above into consideration it would cost you just $61 more in mortgage repayments than the current rent being $445 per week.
Now there are other costs involved in owning property like rates and levies which will likely cost you another $100 per week. But you can see from this example that home ownership is very much in reach with the government incentives and low interest rates.
Putting that little bit more of your income into mortgage repayments is one way to force you to save money. In addition, there are several potential advantages to owning your home. Security, the ability to make the space your own, and the possibility that it could help build your wealth through capital growth.
Market Update April 2020
Looking For An Agent
Are you looking for an agent to assist you with your next property move? Then stop searching and give us a call now at Hill & Viteri Property on (02) 9545-2220. Our agents are looking forward to assisting you buy, sell or lease property in the Sutherland Shire. If you are looking for a particular team member click here to meet the team.
Hill & Viteri Property
Our real estate agency is located in the heart of the Sutherland Shire at 1/29 East Parade, Sutherland NSW, 2232.
We service the entire Sutherland Shire and the surrounding regions. Not many Sutherland Real Estate Agents have the equivalent of success and history as Hill & Viteri Property.
Formally known as Century 21 Sutherland, Hill & Viteri Property is now an independent agency. We continue to make an impact by sticking to our motto “Helping People Through Real Estate”.