![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/home_sold.png?resize=1024%2C437&ssl=1)
Buying your first home is exciting and feels like a rite of passage to adulting. Sadly though, too many Australians overspend, leading to years of persistent stress.
In fact, over half of ‘young growing families’ are experiencing mortgage stress – and that was before COVID-19. (Source: Digital Finance Analytics, February 2020).
It is essential to get your affordability calculations right because it is a costly decision to correct by downgrading.
Use this checklist to be a money-savvy home buyer and avoid mortgage stress.
Sensible
I have:
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
20% deposit saved (so I can avoid lender’s mortgage insurance)
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Extra 5% saved for transaction and set-up costs (stamp duty, moving, furniture)
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Proven I can afford the repayments by saving at the same rate as my loan repayment may be.
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Home building insurance budgeted for
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Extra emergency savings (at least three months’ living costs)
Smart
I have budgeted for:
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
(Couples) Affording repayments on a lower income while raising a family
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Ongoing building maintenance to keep my house fresh, inside and outside. (Allow at least 2.5% of the building cost per year. )
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Income protection insurance to cover my living costs if I am seriously ill or injured.
Savvy
The hidden cause of housing-related stress is not being able to afford important life experiences because you overspent on your home. Be a money-savvy home buyer and cater for these items.
I have budgeted for:
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Predictable expenses like replacing my lifestyle items without borrowing. e.g. Contents and vehicles
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
My other life ambitions (e.g. wedding, holidays, family, education, and self-employment).
![](https://i0.wp.com/matthern.com.au/wp-content/uploads/2020/06/checkbox-40px.png?resize=30%2C30&ssl=1)
Affording repayments if interest rates increase up to 2% during my loan term
You may be thinking, how many people actually do that? Not enough – that’s why one-third of all homeowners are in mortgage stress. (Source: DFA)
If you want your financial situation to be strong, not stressed then be savvy!
Save More While Still Enjoying Life
To help you be a savvy home buyer in a strong financial position check out my free course.