Today I realised where I went wrong with my mortgage - This is probably going to seem like a “duh” to most of you, but my journey of being a financially responsible adult hasn’t been a long one. Hopefully with this post, I can give other people in a similar position to my partner and I 3 years ago some insight that will prevent them from making some mistakes.

My partner and I purchased a property almost 3 years ago now. The incentive was given to me by my parents, who told me I “have to get into the market” as prices of home sky rocketed. Our broker gave us our borrowing power, and we were off, looking for a house 1.5 hours out from the city where we live. Where most of my family live. Our objective wasn’t very clear. We wanted to move in eventually, but we also wanted something that had financial prospect.

We eventually found a house that was affordable, and by affordable, I mean, we can buy it with all our savings, and make repayments with our income. RBA mentioned that the rates wouldn’t change till later years, so we went with a variable loan. You probably know by now where this is going.

Today, our repayments have gone up something like 60%, and we’ve been splitting hairs trying to find where to save money. My partner and I both had leave recently, and we couldn’t go anywhere, because it was simply too expensive.

So my realisation was basically that we didn’t consider the lifestyle that we wanted to have whilst we had this mortgage. We could have got a much smaller loan, at the expense of a more prospective house, and had the money to be able to do a lot more things that we wanted to do even with the rate changes.

We’re fortunate to have been able to increase our incomes during this time, but that hasn’t come without it’s sacrifices as well.

So my advice to those who are looking to buy a house who don’t have strict requirements is to consider the lifestyle sacrifices you will have to make in order to service your loan. Very obvious in hindsight yep, but we got too fixated on the far future. My heart goes out to those who do not have this luxury.