- Low interest rates- interest rates worldwide are at record lows, which will help you as a first home buyer gain a foothold in the property market. In Australia the cash rate is currently held at a record low of only 1.5%.
- Equity- Owning a home is a form of equity which allows you to access a home equity loan. This means that you can borrow against the equity that you have built in your home for many different uses such as renovations, repairs, starting your own business, medical costs and much more. For example, if you owe $100,000 on a home that is worth $500,000 you can potentially borrow up to $400,000 (the amount of equity on your home).
- Buying a property forces you to save. As you will have to be putting a percentage of your salary towards an asset it forces you to invest in your future and avoid wasting money and procrastinating.
- More times than not, the value of your home will appreciate greater than all you’ve paid in mortgage repayments, interest, maintenance etc. This means that when you eventually own your home you can make a profit when you won’t have to be making payments.
- You can’t afford to rent when you’re retired. If you are eligible for a full age single pension which includes energy and pension supplements you will be receiving $888.30 per fortnight, which comes to roughly $23,000 per year. If you’re on a single pension of $23,000 and a one bedroom apartment is $18,000 that gives you $5,000 to live on. As a couple a full age pension comes to $669.60 each per fortnight or roughly $35,000 total for a year. That gives $17,000 a year to live on. Neither situation is a viable way to live. Although if you receive a pension, you may be able to access rent assistance for additional financial support.
- If you are renting you are paying off someone else’s mortgage.
- You can be a rentvestor. This means that if you live in an area like Sydney where it may be too expensive to buy a property, you can buy a property in a more affordable area and rent that property out, using those funds to continue to rent in Sydney. To find out more about rentvesting read our article here: http://www.achl.com.au/rentvesting.html