How to buy a $705,000 house in Australia
In this article, we’ll look at all the factors that go into buying a $705,000 property in Australia. We’ll look at the deposit you’ll need to save, LMI considerations, the average fees & stamp duty on a $705,000 house, the estimated FHOG, how much interest you’ll pay on the mortgage and the amount you need to earn to buy a $705,000 home.
We’ve provided this information to give rough estimates. Need specific information that suits your financial situation? Speak to a local mortgage broker.
Note: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.
Minimum deposit to buy a $705,000 property (no LMI)
In Australia, to avoid Lenders Mortgage Insurance (LMI), you typically need a deposit of at least 20% of the property’s purchase price. For a house priced at $705,000, the minimum deposit required would be 20% of $705,000. Calculating this, 20% of $705,000 is $141,000. Therefore, you would need a minimum deposit of $141,000 to buy a house priced at $705,000 without incurring LMI.
Minimum deposit to buy a $705,000 property (with LMI)
To buy a house priced at $705,000 in Australia with Lenders Mortgage Insurance (LMI), you typically need a minimum deposit of 5% of the purchase price. This equates to $35,250. However, with a 5% deposit, LMI is required. The cost of LMI varies but is generally around 2% of the loan amount. For a $669,750 loan ($705,000 – $35,250), the LMI could be approximately $13,395. Therefore, the total minimum deposit needed, including the estimated LMI cost, would be around $48,645.
Mortgage fees for a $705,000 house
When purchasing a house in Australia for $705,000, you can expect additional fees such as stamp duty, legal fees, and inspection costs. Stamp duty varies by state but can be approximately $27,000. Legal fees for conveyancing typically range from $1,000 to $2,000. Building and pest inspections may cost around $500 to $1,000. Additionally, if you are taking out a mortgage, lender fees and mortgage insurance could add another $1,000 to $5,000. Therefore, the estimated additional fees could range from $29,500 to $35,000, depending on specific circumstances and location.
Estimated FHOG for $705,000 purchase
The First Home Owner Grant (FHOG) in Australia varies by state and territory, and eligibility criteria must be met. Generally, the grant is available for new homes, not established properties. For example, in New South Wales, the FHOG provides $10,000 for new homes valued up to $750,000. If you are purchasing a new home in NSW for $705,000, you may be eligible for the $10,000 grant. However, it’s essential to check the specific requirements and grant amounts for your state or territory, as they can differ significantly.
Estimated mortgage interest on a $705,000 home purchase
To estimate the total interest paid on a $705,000 house in Australia over a 30-year mortgage, we can use the average interest rate of approximately 7% over the last 50 years. Using a standard mortgage calculator, the monthly payment for a 30-year loan at 7% interest would be around $4,690. Over 30 years, this totals approximately $1,688,400. Subtracting the principal amount of $705,000, the estimated total interest paid would be around $983,400. This is a rough estimate and actual interest paid can vary based on the specific terms of the loan and changes in interest rates.
How much do you need to earn to buy a $705,000 house?
To afford a mortgage on a house priced at $705,000 in Australia, with a 20% deposit, you would need to borrow $564,000. Over the last 50 years, the average interest rate in Australia has been around 7%. Assuming a 30-year loan term, the monthly repayment would be approximately $3,750. Financial experts recommend that mortgage repayments should not exceed 30% of your gross monthly income. Therefore, to comfortably afford these repayments, you would need to earn at least $12,500 per month, or $150,000 annually.
Mortgage advice
The above information is to be used as rough estimates – we’d recommend you speak to a mortgage broker to give you specific information about your unique circumstances.
