https://au.finance.yahoo.com/news/buy-property-now-wait-two-years-heres-verdict-221044612.html
Should you buy property now or wait two years? Here’s the verdict
Scenario #1: Buy nowBuy today with a 10 per cent deposit and pay lenders’ mortgage insurance (LMI) on smaller 10 per cent deposit.
Purchase price: $530,999 (Based on median national unit price, Domain data)
Deposit of 10 per cent: $53,100
Loan amount: $487,075 (average first home buyer loan size)
Estimated LMI: $9,176
Monthly repayments: $2,531 over 30 years
Interest over the term of the loan: $424,100
Total repayments over the term of the loan: $911,175
Scenario #2:Delay by two years, 10 per cent price increase
Buy in two years with a 20 per cent deposit and no LMI. The market increases by 10 per cent.
Purchase price: $584,099
Deposit of 20 per cent: $116,820
Loan amount: $467,279
Estimated LMI: $0
Monthly repayments: $2,372 over 30 years
Interest over the term of the loan: $386,733
Total repayments over the term of the loan: $854,013
Scenario #3:Delay by two years, 10 per cent price reduction
Buy in two years with a 20 per cent deposit and no LMI. The market drops by 10 per cent.
Purchase price: $477,899
Deposit of 20 per cent: $95,580
Loan amount: $382,319
Estimated LMI: $0
Monthly repayments: $1,942 over 30 years
Interest over the term of the loan: $316, 791
Total repayments over the term of the loan: $699,110
It means that even if buyers wait two years and prices go up by 10 per cent, buyers are still better off than if they’d jumped in today and paid lenders’ mortgage insurance.
“When prices were going through the roof, it was easier to justify a $9,000 insurance premium. It gave buyers peace of mind that they were in the market and didn’t have to continue to chase prices further up,” Mickenbecker explained.
“But it also meant a bigger loan, which meant higher monthly repayments and interest over the life of the loan.”
These days, the fear of missing out isn’t as strong, he continued, and it means buyers can breathe out and take their time.
