Buying a property at different life stages: What to consider
So you’ve made the decision to purchase your own little piece of earth. No matter what stage of life you are at, there are two things to figure out:
a) what kind of property you want to buy
b) what you can actually afford
Figure out your borrowing power
One of the first big wads of cash you’ll hand over for a home loan is the deposit. Ideally, you will want to have at least 20% to put down. Any less than that and you will generally have to pay lenders mortgage insurance, unless you have a guarantor.
This brings us to our next point, which is that what life stage you are at will most likely have some bearing on how much of a deposit you can muster up and what you can afford.
Buying in your 20s or 30s
There are both pros and cons to buying a home in your 20s or 30s. Buying at a young age means you should be able to get a longer loan term (between 25 and 30 years). This will make your repayments smaller and more manageable. However, simply saving enough money for a deposit in the first place can be a tough hurdle to get over.
If you’re at the beginning of your career, then you probably won’t be earning the big bucks just yet. Having someone to share the financial burden with, whether that be a family member, your partner or a friend usually helps. This isn’t always possible, so if you are buying by yourself then you’ll want to keep a strict budget and have a clear idea of what you can afford.
You might even be able to take advantage of the government’s First Home Loan Deposit Scheme if you are a first time buyer. Read our First Home Loan Deposit Scheme guide to learn more about what criteria you need to meet, to be eligible for the scheme.
Buying a home with children
If you have children, then the goal posts for buying your own property move once again.
You may still be able to get a longer loan term, even into your mid-40s, but you will obviously have other expenses to consider. Plus, as Mozo’s Property Expert Steve Jovcevski says, lenders take into account a whole lot more when working out your home loan serviceability these days (that’s a calculation to work out your ability to pay back the loan).
“The new serviceability criteria takes into account stuff like tuition costs. So you’ll need to show your lender how much you’re spending on private school fees and that could have some effect on how much you can borrow,” says Jovcevski.
Of course that’s just one cost to consider. Simply having children comes with different expenses, whether that be the basics like food and clothing or more luxury expenses like paying for streaming services.
The best thing to do is to sit down and work out what all your expenses are. Then you can look at your savings and get a rough idea of what type of property you can afford to buy. As Jovcevski says, it may be a matter of thinking about what is more important to you right now. If you want to send your children to a pricey school then you may have to settle on a smaller home and mortgage and vice versa.
Buying in your 50s
Once you get into your 50s, you will have fewer options available to you when it comes to home loans. This is because most lenders do not want mortgage repayments to carry on into retirement. In fact, the closer you are to retirement age, the less likely lenders are to approve you for a longer loan term.
“The thing with the loan term is, the shorter it is, the higher the repayments will be,” says Jovcevski. “If your lender won’t approve you for a longer loan term, then you will have to think about how high the loan repayments will be.”
Jovcevski added that when buying a home in your 50s or even late 40s, it is important to know what your savings are and how much superannuation you have. This is because your lender will take all this into account when deciding whether or not to approve you for a loan.
For instance, let’s say you want to borrow $500,000 to buy a house. Your lender will take your current superannuation balance into account and any other savings you might have. The expectation is that you will be able to have paid off the loan in about 15 years time.
Of course, whether you want to use your superannuation to buy a house is another question. If you have high loan repayments to offload throughout your 50s and early 60s then this may affect your quality of life. So, you may not be able to take as many holidays as you would like, you might not be able to afford a new car, that sort of thing.
Ultimately you really need to weigh up your options and decide what is more important to you.
Check your credit
Lastly at any life stage, you will need to know what your credit history is. You can get a free credit check at least once a year to find out your credit score. Then, if it’s not so great, you can work on improving it.
Head to Mozo’s home loans guides section for more information on taking out a mortgage. Or, if you’re ready to dive in and start looking for a loan, check out the home loans on offer below.
Compare home loans - rates updated daily
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment
1.99% p.a.variable for 12 months and then 2.48% p.a. variable2.47% p.a.Smart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
- interest rate
- 1.99% p.a.variable for 12 months and then 2.48% p.a. variable
- comparison rate
- 2.47% p.a.
- Upfront fees
- $520
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - with 0.10% additional interest
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Smart Booster Home Loan
UHomeLoan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.75% p.a.
fixed 3 years2.22% p.a.UHomeLoan
$0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.
- interest rate
- 1.75% p.a.
fixed 3 years
- comparison rate
- 2.22% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free up to $20,000 p.a.
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $395 Establishment fee waived for fixed rate loans that settle by 30 September 2022. Receive 1.75% 3 year fixed rate when you apply by 29 April 2021 and settle within 90 days.
Read our Mozo Review to learn more about the UHomeLoan
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
interest rate
comparison rate
Initial monthly repayment
2.09% p.a.
fixed 3 years2.43% p.a.Basic Home Loan
Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.
- interest rate
- 2.09% p.a.
fixed 3 years
- comparison rate
- 2.43% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 70.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $750,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Basic Home Loan
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.19% p.a. variable2.19% p.a.Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
- interest rate
- 2.19% p.a. variable
- comparison rate
- 2.19% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Fixed Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
1.89% p.a.
fixed 2 years2.15% p.a.Fixed Home Loan
Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^
- interest rate
- 1.89% p.a.
fixed 2 years
- comparison rate
- 2.15% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $325.00
- Extra repayments
- yes - free, up to $20,000 p.a.
- Redraw facility
- yes - free
- Offset account
- Optional - $10 per month
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Fixed Home Loan
^See information about the Mozo Experts Choice Home Loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.