Tired of paying someone else’s mortgage?

Here’s how you can escape the rent trap.

Did you know that the rent you are currently paying can actually go towards making up your future mortgage repayments?

For example, if you’re paying $750 per week, that equates to nearly $40,000 per year in rental payments. So if you took that $750 per week and looked at what the equivalent would be in mortgage repayments, it would cover a mortgage of around $500,000.

But it doesn't stop there.

Not only do you take the rent that you are currently paying into account, but also the savings you have been making towards that house deposit.

So if you were saving another $300 per week on top of that $750 in rent, you have $1,050 per week to cover a mortgage repayment.

If you took that $1,050 per week and looked at what the equivalent would be in mortgage repayments, it would cover a mortgage of around $700,000. You can have a go yourself on any of the banks online mortgage repayment calculators.

From here you can add your deposit to that figure (take into account your savings, KiwiSaver and any gifts from family) and there you have a possible purchase price for your own home.

Now bear in mind this is very basic maths.

The second part to this whole equation is how much of a mortgage you can actually obtain, as well as your maximum borrowing potential based on the amount of deposit you have.

This is where teaming up with a Mortgage Adviser will help you work out what your actual borrowing capacity is.

Different banks will have different calculators for assessing how much they can lend you. A Mortgage Adviser knows how each lender assesses a loan application, which can help you to get the loan you need.

If you don't think that you could service a mortgage on your own, I can introduce you to other ways to get on to the property ladder.

For instance, if you have friends or family that are renting as well, you could consider a Co-Ownership home loan (ask me how).

Co-ownership offers an opportunity to make home ownership more affordable and attainable, especially for those who find saving for a deposit challenging. By pooling resources with friends or family you can share the costs and responsibilities of buying a property.

Making the leap from renter to homeowner is not just about paying a mortgage instead of rent.

The mortgage payment is not going to be your only expense. You’ll be responsible for council and water rates, house insurance and maintenance on the property.

To get an idea of these extra responsibilities, talk to other homeowners in your circle so you can compare the financial outcomes of owning versus renting. Think about how these extra costs weigh up against the potential capital gain you could make by owning your own home.

Remember, your first home probably won't be your forever home.

So if you’re ready to make the leap, or know someone that could benefit from this advice, feel free to get in touch and I can help navigate this exciting journey and turn your dream of homeownership into a reality.  Call Stephen Massey – Loan Market 021 711 444 or check out my website loanmarket.co.nz/stephen-massey

Check out my Tiktok account #mortgagedad4u for some other useful info.