A mortgage can feel like the grown-up move, but it is still just a tool. The right loan supports your day-to-day life without squeezing out savings, rest, or choices. These checks can help you decide if buying now fits your budget and your plans.
Clarify Your Timeline And Your Non-Negotiables
A mortgage tends to work best when you plan to stay put for a long stretch, often 5+ years. Short stays can mean paying selling costs before you have built much equity. Renting can look “wasted” on paper, but flexibility has real value.
Make a short list of what must be true for buying to feel worth it. Think commute time, school zones, space needs, and how steady your income feels. If the list leans heavily on flexibility, renting longer may match your life better.
Build A Budget That Matches Real Life
Start from your cash flow, not a maximum loan figure. A quick chat with the Borro finance team or other local experts can help you line up your numbers with a few loan shapes and repayment options. A mortgage is “right” only if the payment fits in an average month, not just a good month.
Track spending for 8-12 weeks and group it into needs, wants, and goals. Give savings its own line item, not a leftover.
If the budget has no room for repairs, bills, or a weekend away, the loan may be too tight. Some people pay bills from one account and keep spending money in another, so the totals stay clear.
Add Up Front Costs And Keep A Cash Buffer
Buying comes with one-off costs that do not show in the monthly repayment. Depending on where you live, you may face stamp duty, inspections, conveyancing, lender fees, and moving costs. If you plan to pay lenders’ mortgage insurance, add that into the price tag too.
Aim to keep a cash buffer after settlement, not just before it. Many buyers feel “house rich, cash poor” in the first year, when furniture, small fixes, and new bills hit at once.
A simple target is 3-6 months of key expenses in a separate emergency fund. Add ongoing costs like council rates, strata, and home insurance into your monthly plan.
Test Your Numbers Against Rate Buffers
Your repayment today is not the whole story, since rates can change across a long loan term. Regulators watch this risk as well: APRA said the mortgage serviceability buffer would remain at 3 percentage points in its November 2024 update.
Run your own stress test with a higher repayment than the one quoted now. If an extra $200-$500 per month breaks the plan, step back and rework the deposit, the price range, or the timeline. A buffer is not pessimism – it is a way to keep options open.
Compare The Mortgage To Your Other Commitments
A mortgage sits on top of all the other bills you already carry. The Reserve Bank of Australia has noted that scheduled mortgage and consumer credit payments remain high as a share of household disposable income.
List every recurring payment: credit cards, HECS-HELP, car loans, childcare, subscriptions, and insurance. Then check what is left after the mortgage clears, not before it comes out. If debt already does most of the work in your budget, adding a home loan can raise stress fast.
Watch For Signs Of Housing Stress
Affordability is not only about getting approved. The Australian Institute of Health and Welfare reported that in 2024-25, about 1.26 million low-income households were in financial housing stress, meaning housing costs were over 30% of disposable income.
Use a simple set of warning signs to judge your own risk:
- Savings drop to $0 most months
- You rely on credit cards for basics
- A single bill leads to late fees
- You skip insurance to cut costs
- Any income dip breaks the budget
If 2+ of these feel familiar, a smaller loan or a longer runway can be safer. Keep room for the boring things that protect you, like insurance, maintenance, and savings. A calm budget beats a stretched one, and the place may not be perfect.
Decide If Buying Now Beats Waiting
Buying can work when your job is steady, your deposit is solid, and your budget holds up under a stress test.
Waiting can work when you need time to build savings, pay down debt, or learn what location fits you. Renting can work when flexibility keeps your life moving, though it may not be the “forever” plan.
Try a simple rule: pick the option that gives you the most stable month with the fewest fragile assumptions. If buying only works by cutting every comfort and pausing savings, the timing may be off. If you can buy and still save, rest, and handle surprises, a mortgage may fit.
A mortgage decision is rarely one-and-done. Re-check the numbers after pay rises, job changes, or big life shifts. If the numbers feel tight, time and savings can turn a hard no into an easy yes later.
A dad of 3 kids and a keen writer covering a range of topics such as Internet marketing, SEO and more! When not writing, he’s found behind a drum kit.
