Should I buy a house before retiring or continue to rent?
I am very anguished where I will live and how I will pay the rent when I stop working. Do I have to buy a small unit at 59 with only eight or nine years of work left? Earnings $ 116,000, I contribute to $ 800 per month in Super (balance: $ 175,000), pay $ 2607 for rent and I have $ 5000 in savings. The bank says that I can borrow $ 500k with a $ 25,000 deposit. Should I reduce super contributions for 12 months to save for a deposit?
I’m sorry to know about the anguish you are feeling and can certainly understand the concern that it flows that you are not safe in your housing disposition.
Calculating what will leave you better from a mortgage and paying the rent is not as easy as it might seem for the first time.Credit: Simon Litch
At current interest rates, mortgage reimbursements with a loan of $ 500,000 are similar to the rent you are paying. However, while the rent is likely to increase over time, the reimbursements of mortgages would remain relatively stable, unless the interest rates do not increase significantly.
Potentially once withdrawn, you could make a flat -rate withdrawal from your superanuation to delete or at least reduce the mortgage, thus reducing the exits in the retirement phase of life.
Of course, the problem here is that then you do not have the superanuation to generate pension income, and therefore you would be strongly entrusted to the pension. However, alleviate your concern for the safety of homes.
A significant obstacle, however, is the requirement for a $ 25,000 deposit. You should explore the first Super Saver Home scheme, which allows you to withdraw the super voluntary contributions. It is possible to take up to $ 50,000 from your super in this way.
Aside, it could be argued that you are better to continue renting.
Since you added $ 800 per month to your super, you may have the $ 25,000 “bank” deposit so to speak, using this scheme. Note, to be suitable, has never been owned in Australia.
Other first residence owners patterns to help reduce the charge of stamp duty vary according to the state. There is also the first guarantee of home, which removes the need for the bank to charge a mortgage insurance of the lenders, then be sure to ask your bank. It is also worth exploring the aid program for purchase.
