I bought my first property off the plan in 2015 for $550k (we paid zero stamp duty and also got a FHOG of $15k so effective purchase price of $535k). We paid a 10% depoist upfront and nothing else was required to handover of the property. Settlement happened in June 2017 which is when we borrowed $400k @ 3.98%. From then until we sold the property mid 2023 rates dropped progressively to 2.34%. By the time we sold for $830k we owned the property outright. The proceeds of sale was $815k taking into account legal fees and agents commission.
Over the life of the loan we would have paid less than $50k collectively in interest which still leaves us massively in front. Lets call purchase price plus interest $585k we still walked away $230k infront. When we first moved in our neighbours were paying ~$500/week in rent and by the time we left they were up to $650/week. Lets call it an average of $575/week for rent for them over the 6 years.
Rental costs for 6 years = $179,400 vs less than $50k in interest plus I walk away with an extra $230k in capital gains in my pocket.
We now have a bigger property and our monthly interest for the homeloan averages $550/week. To rent the same property it'd cost $1000/week. Again we're making accelerated repayment so we'll likely own it outright within 10 years even if interest rates stay where they are now.
