As interest rates reach record lows, Consumer Affairs Victoria has urged home buyers to consider more than just rates when calculating costs, advice which applies to all buyers throughout the country.
Analysis of the last Census showed that five of the top 10 most mortgaged municipalities in the country were in suburban Melbourne.
The analysis, carried out by CommSec, found that municipalities on Melbourne’s growing suburban fringe – the cities of Melton, Casey and Wyndham and the shires of Nillumbik and Cardinia – were among local government areas with the highest number of mortgaged properties in Australia.
Director of Consumer Affairs Victoria Claire Noone urged home buyers to carefully calculate how much they could afford over the long term, before making one of life’s biggest financial commitments.
“There’s more to calculating how much you can afford than just looking at current interest rates,” Dr Noone said.
“Carefully assess your financial situation and desired standard of living, including any likely future changes, such as starting a family and interest rate rises.
“You should also take into account costs such as conveyancing fees, loan establishment fees, stamp duty, GST and building inspection fees.”
Dr Noone said home buyers should also factor in the costs of moving, including utilities changes, and insurance.
“Using online tools such as loan simulators and getting independent financial advice could help avoid any nasty surprises,” she said.
Consumer Affairs Victoria has released seven videos to help home buyers and sellers prepare for an anticipated stronger property market this season.
For buyers, the 30-second videos cover knowing how much you can afford, pest and building inspections, the auction process and understanding private sales.
For sellers, there are videos on shopping around for agents, marketing your home and understanding fees and commissions.