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Paying the Bills!
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The party is well and truly over, as they say. This week the first mortgage payment went out, which certainly isn't a milestone to be celebrated, but it does mark the beginning of our new life down under. Unlike the last five years, we now have responsibilities again, and have to knuckle down and pay the bills. We have taken out a wealth package with The Commonwealth bank and offset all our savings, saving us a significant amount of money per year. We are also paying a much higher amount each month into our mortgage, but with our home loan, only accounting for 16 percent of our joint income, luckily we can afford to do it.
In order to pay off our loan quickly, we have had to take out a variable rate mortgage, which was initially a concern. Only this week, the Bank of Australia raised the base rate by another 0.25%, which will inevitably add more money to our outgoings each month. However, for us, it isn't a problem; we are both working in well paid jobs, so this will not cause us too many difficulties. Nevertheless, I am well aware, this isn't the same for everyone.
Yesterday I was watching The ABC News on television and there was a story about a 75-year-old woman, who is having to sell her home, because she can no longer afford to pay the mortgage. This poor woman was given a thirty year, $650,000 home loan, only a few months ago. Yes you heard that right, a thirty-year mortgage was given to a 75-year-old woman; this just would not occur in the UK and to be honest I was shocked that this had even happened.
It does seem, however, that this is common practice, and substantial sums are being leant to people who just can not afford to pay it back. Having only just moved to Australia, even I was taken aback at how quickly we bought a house, with the mortgage being approved within a matter of days. Thankfully, it worked well for us, and we were able to move home relatively quickly once we were working. I am however sceptical about a system that allows pensioners to get a 30-year loan, who will be 105, when it is finally paid off. As my Mother and Father always said, 'live within your means, and you'll be fine.' Well, I learnt the hard way, but today I buy only what I can afford and no more; it has worked out well for me.
The Commonwealth Bank Wealth Package, also allows me to put as much extra money into the mortgage as I like each month, with no penalties, and it also permits me to withdraw that extra money if I so choose, rather than get a personal loan. This is handy to know for the future; we may decide to upgrade the kitchen or buy a new car, and there will always be money there to pay for it. I have no idea if this kind of mortgage is available in the UK, but I personally think it is a fantastic deal and should encourage a culture of saving rather than spending!
Of course, owning a home is an expensive business, as most of you already know. When we arrived in Australia, we had absolutely nothing, so we have has to furnish a whole house, which isn't cheap. On top of that, we are also having to upgrade the electrics in each room before we refurbish. There are quite simply not enough plug sockets in the building, so we are paying to have more fitted each time we decorate. On Monday we have an electrician coming round to fit new plug points in the family room as well as change all the light switches, at the cost of $500, it isn't cheap, but it is necessary for peace of mind. The electrics haven't been changed since this house was built in 1995; with the amount of electrical equipment we have in 2023, it is absolutely mandatory to upgrade as and when we can,
Also on Monday, we finally have our NBN appointment with IPrimus. It has taken this long to actually start the process of installing broadband at the house; it is like living in Britain twenty years ago. Even then, we are not sure if they will be able to connect us on that day; it is all dependent on the infrastructure servicing the villa. I am flabbergasted that it is quicker to buy a house, than it is to have internet installed, but this is Australia and despite all its amazing qualities, it also has many faults. I just hope we will finally have some form of connection by the end of Monday afternoon.
Darrell has also bought a new car finally, after finding something suitable, and it has been a long time coming. Cars are particularly expensive over here at the moment, after the pandemic reduced the number of new vehicles coming into the country. He could have continued waiting and waiting before buying anything, but he needs one now, it is important he has one to get to and from work. We have done what we have to, taken money from our savings and bought a Honda Accord; not a new car, but a great first step, as we continue to establish our life in Australia.
With private health care, ambulance cover, life insurance and utilities, life isn't easily affordable in Australia. Like the UK, we are also suffering from a cost of living crisis and there is no end in sight to the mortgage interest rate rises, so even though we are comfortable for now, we are well aware of what could happen in the future. As we navigate our way through this difficult economic period, we are learning from the mistakes of the past and no longer spend like each day is our last; we save for a future and the life we believe we deserve. This is our time to succeed in the embattled world, but this is also a time to lose. Avoiding the stupidity of previous failures and channelling energy into rebuilding our life is our overriding goal; when I write about this period in the future, I want it to be full of colour, positivity and hope, not negativity, disillusionment and despair; only time will tell if we succeed or fail at the first hurdle.
In order to pay off our loan quickly, we have had to take out a variable rate mortgage, which was initially a concern. Only this week, the Bank of Australia raised the base rate by another 0.25%, which will inevitably add more money to our outgoings each month. However, for us, it isn't a problem; we are both working in well paid jobs, so this will not cause us too many difficulties. Nevertheless, I am well aware, this isn't the same for everyone.
Yesterday I was watching The ABC News on television and there was a story about a 75-year-old woman, who is having to sell her home, because she can no longer afford to pay the mortgage. This poor woman was given a thirty year, $650,000 home loan, only a few months ago. Yes you heard that right, a thirty-year mortgage was given to a 75-year-old woman; this just would not occur in the UK and to be honest I was shocked that this had even happened.
It does seem, however, that this is common practice, and substantial sums are being leant to people who just can not afford to pay it back. Having only just moved to Australia, even I was taken aback at how quickly we bought a house, with the mortgage being approved within a matter of days. Thankfully, it worked well for us, and we were able to move home relatively quickly once we were working. I am however sceptical about a system that allows pensioners to get a 30-year loan, who will be 105, when it is finally paid off. As my Mother and Father always said, 'live within your means, and you'll be fine.' Well, I learnt the hard way, but today I buy only what I can afford and no more; it has worked out well for me.
The Commonwealth Bank Wealth Package, also allows me to put as much extra money into the mortgage as I like each month, with no penalties, and it also permits me to withdraw that extra money if I so choose, rather than get a personal loan. This is handy to know for the future; we may decide to upgrade the kitchen or buy a new car, and there will always be money there to pay for it. I have no idea if this kind of mortgage is available in the UK, but I personally think it is a fantastic deal and should encourage a culture of saving rather than spending!
Of course, owning a home is an expensive business, as most of you already know. When we arrived in Australia, we had absolutely nothing, so we have has to furnish a whole house, which isn't cheap. On top of that, we are also having to upgrade the electrics in each room before we refurbish. There are quite simply not enough plug sockets in the building, so we are paying to have more fitted each time we decorate. On Monday we have an electrician coming round to fit new plug points in the family room as well as change all the light switches, at the cost of $500, it isn't cheap, but it is necessary for peace of mind. The electrics haven't been changed since this house was built in 1995; with the amount of electrical equipment we have in 2023, it is absolutely mandatory to upgrade as and when we can,
Also on Monday, we finally have our NBN appointment with IPrimus. It has taken this long to actually start the process of installing broadband at the house; it is like living in Britain twenty years ago. Even then, we are not sure if they will be able to connect us on that day; it is all dependent on the infrastructure servicing the villa. I am flabbergasted that it is quicker to buy a house, than it is to have internet installed, but this is Australia and despite all its amazing qualities, it also has many faults. I just hope we will finally have some form of connection by the end of Monday afternoon.
Darrell has also bought a new car finally, after finding something suitable, and it has been a long time coming. Cars are particularly expensive over here at the moment, after the pandemic reduced the number of new vehicles coming into the country. He could have continued waiting and waiting before buying anything, but he needs one now, it is important he has one to get to and from work. We have done what we have to, taken money from our savings and bought a Honda Accord; not a new car, but a great first step, as we continue to establish our life in Australia.
With private health care, ambulance cover, life insurance and utilities, life isn't easily affordable in Australia. Like the UK, we are also suffering from a cost of living crisis and there is no end in sight to the mortgage interest rate rises, so even though we are comfortable for now, we are well aware of what could happen in the future. As we navigate our way through this difficult economic period, we are learning from the mistakes of the past and no longer spend like each day is our last; we save for a future and the life we believe we deserve. This is our time to succeed in the embattled world, but this is also a time to lose. Avoiding the stupidity of previous failures and channelling energy into rebuilding our life is our overriding goal; when I write about this period in the future, I want it to be full of colour, positivity and hope, not negativity, disillusionment and despair; only time will tell if we succeed or fail at the first hurdle.
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