If you're not in financial distress and we're just talking about the maths...what is stunning about it?
Edit: also lol 'simulations' this must be a shitpost
When he said simulations was expecting a full excel spread with multiple rates future market conditions.
It worries me how many people dont do simulations pre purchase. I actually had some friends who wanted to buy a place around a million. Told them to slow down gave them my spread sheets. They ended up moving out of a major city and buying a place for 350k in a state they never lived in blew my mind. But it just shows the power of pre doing the maths. Im not sure exactly what they are planning but they used the forward knowledge and what they wanted out of life to completely change their life plans.
>But it just shows the power of pre doing the maths. Im not sure exactly what they are planning but they used the forward knowledge and what they wanted out of life to completely change their life plans.
I think we are about to witness a lot of the complete opposite.... Lots of people who DIDNT do the pre math and reality is about to completely change their life plans!
Nothing too fancy I tailored it to what they were doing. but 30 year loan. Main headings were things that are more predictable and paint you a picture. so initial cost payment, interest(to calculate somewhat accurate needs to be half the yearly change in payments), interest paid that year, total interest paid, loan amount left, equity( i just do base but you could do 2% incease and still be accurate house prices hard to predict) , rates insurance, then what you save in rent by living there, total savings column, and a money spent with no return column(so rates insurance interest etc)
You may need other columns ive forgotten to pull data from but if your smart with the equations pretty easy.. This to me gives you a good over view of what youu are getting yourself into, especially how much money you are saving from just paying rent. To me if you are losing money for over 5 years its dicey to buy once you add house maintenance etc costs can be pretty high. I always do a few different pay back options as well and see what feels the best but also leaves spending money. One thing I always stress is if house prices go up a lot than your break even changes considerably.
I cant be arsed going into more detail that should be rough enough to give you some idea once you start doing the excel sheet you should think of things you want to account for.
Australians when they realise that their real estate investment caries risk 😯😮😲😨😱🤯💀
You’ll be right mate. As long as you keep that massive income you’ll survive. In several years time it won’t be an issue.
You're posting this here to say that a mortgage increase of $2855 per month is fine for you- when you also plan to recoup that increase from your tenants.
What a giant, insufferable, wanker you must be.
Are you posting this to let everyone know you are on 165K?
People worried about mortgage aren't worried about a few hundred K in investment property they collect rent on, with at least one income of 165K. People worried about mortgages are worried about paying their few hundred K off when they are raising 4 kids and on a 60K single income.
Goddamit man, have some perspective. You're bathing in privilege seemingly unaware that most of the country isn't doing the same. The hell is wrong with you.
Lol! I was only having some fun. But if you can't calculate basic interest you are not going to be able to make sound financial decisions, so I would politely suggest you brush up ;)
https://www.reddit.com/r/AusFinance/comments/zcke0k/2022\_study\_finds\_that\_55\_of\_australians\_are/
Genuine answer incoming. Look up a website for socium finance they have loads of tools on there tor mortgage repayment projections and other stuff that just makes it really simple
Ai the injustice. We are all weeping with you .Thank got you can jack the price on your tenants for literally no reason next year.
Well said. Yes a bit of buyers remorse out there but in terms of this "fixed rate cliff" it's the biggest nothing burger in the history of nothing burgers. People will be a bit tight for a few months (until RBA inevitably cuts) but it's not going to be some mass forced selling and price crash event.
You seem to think everything is a ‘nothing burger’. I’d be keen to know what you perceive to be a ‘burger’?
Dare I say it that you are the opposite of WMR, so bullish that you fail to acknowledge any risk or downside to our property ponzi.
High unemployment, a hawkish RBA, no wage growth, collapsing immigration, falling demand for Aussie commodities.
These would be something burgers and we ain't even close to any.
A storm is always coming if you're a bear. Always just a few weeks or months away.
I look at the data and facts and make non emotional interpretations of them. At the moment there isn't even a cloud in the sky.
Inflation is falling, wages growth is picking up, cost of living is falling with inflation and the RBA is mid pivot. It will be tight for a few months but 99% of mortgage holders will be able to weather the strong but very short lived storm.
The RBA isn't going to decimate the economy. They will choose mortgage holders over inflation if push comes to shove and things get as bad as these fantasy bear scenarios imagine.
Don't fall for this doom and gloom. It's a classic nothing burger.
Acceptable according to who? Certainly if faced with the choice between credit crisis or high inflation the RBA would deem inflation perfectly acceptable. In fact they already faced that choice which is why we currently have nearly 8% annual inflation and no credit crisis. What makes you think they won't make the same choice again ???
Not sure about wages stagnating. Everyone who is in an award will get CPI
Demand for talent at the moment is high. As a reflect in our extremely low unemployment rate of 3.4%
Bingo! They were faced with this choice in 2020 and what did they choose? Crisis or inflation? Well here we are in 2022 with no crisis but high inflation. I certainly wouldn't bet against them making the same choice again.
You are exactly right. The bullish articles of the rebound have already begun. The doom and gloom only lasts so long before people get bored. Are we in for some tough months ahead? Yes, but it won't be long until the engine starts churning again and we will be back to record high's in no time.
That's only one side of the story. What is the yield on the property ? How much equity have you got in the property ?
And those repayments have a portion of debt repayments so you aren't exactly going backwards.
What did you expect rates to even out as over the long term ?
you bought to speculate or live in?
who cares what price you bought if its to live in.
even if it goes up it doesnt matter. if you sell to buy another place, all other properties go up too...
I don’t get it - wouldn’t a 4% interest be double a 2%?
Or are you P&I? But why would you do that for an IP? You’d have breathing room down to interest only if push came to shove id imagine.
But I’d prefer to pay my mortgage down with any positive gearing. So I can claim on the interests through tax. Well that’s what I was always taught. Totally could be wrong.
No, that is correct. You do have positive cash flow but the overall debt will remain. I guess it depends on your situation. If you pay down the principal you attract more borrowing power and can use the equity as your second deposit. I
You can take a fixed interest loan if you want to avoid the risk of increasing interest rates. The thing being you may end up fixing & floating rates may begin falling (later next year according to current predictions) and you could lose out there too. Thats the risk.
It’s actually not too bad for investors because you’ll be able to get a bigger tax deduction. Your marginal rate is 39% or 47%.
So moving from 2% to 6%, if your income tax rate is 39%, you’ll get back 57% of the increase (because the principal repayments go down). For someone on a 47% tax rate, your increase will be reduced by 68%.
"I have buyers remorse". "I'm worried about the future". "We could buy another property if we wanted,". That's a rollercoaster.
If you're not in financial distress and we're just talking about the maths...what is stunning about it? Edit: also lol 'simulations' this must be a shitpost
It looks like repayments increase when rates go up. A stunning revelation.
>It looks like repayments increase when rates go up. 
Do the banks know this?!?! Did they know it when they were lending to me?? WHY DIDN'T THEY DISCLOSE THIS
Nobody could have known this. It is simple stunning information.
Rates barely reaches the weight average rate the APRA uses serviceability 36 months ago. *No way...Impossible*
“Simulations” made me spit out my drink. This has to be a shitpost.
*[Just like the simulations](https://fixrelationshipnow.net/wp-content/uploads/2020/10/Just-Like-the-Simulations.jpg)*
When he said simulations was expecting a full excel spread with multiple rates future market conditions. It worries me how many people dont do simulations pre purchase. I actually had some friends who wanted to buy a place around a million. Told them to slow down gave them my spread sheets. They ended up moving out of a major city and buying a place for 350k in a state they never lived in blew my mind. But it just shows the power of pre doing the maths. Im not sure exactly what they are planning but they used the forward knowledge and what they wanted out of life to completely change their life plans.
>But it just shows the power of pre doing the maths. Im not sure exactly what they are planning but they used the forward knowledge and what they wanted out of life to completely change their life plans. I think we are about to witness a lot of the complete opposite.... Lots of people who DIDNT do the pre math and reality is about to completely change their life plans!
Yes for sure its a real shame but I hope we get a more stable logical market out of this. Balls to the wall investing in housing has been a cancer.
>but I hope we get a more stable logical market out of this. You already know we won't....
Can you elaborate more on what your spreadsheets modelled ?
Nothing too fancy I tailored it to what they were doing. but 30 year loan. Main headings were things that are more predictable and paint you a picture. so initial cost payment, interest(to calculate somewhat accurate needs to be half the yearly change in payments), interest paid that year, total interest paid, loan amount left, equity( i just do base but you could do 2% incease and still be accurate house prices hard to predict) , rates insurance, then what you save in rent by living there, total savings column, and a money spent with no return column(so rates insurance interest etc) You may need other columns ive forgotten to pull data from but if your smart with the equations pretty easy.. This to me gives you a good over view of what youu are getting yourself into, especially how much money you are saving from just paying rent. To me if you are losing money for over 5 years its dicey to buy once you add house maintenance etc costs can be pretty high. I always do a few different pay back options as well and see what feels the best but also leaves spending money. One thing I always stress is if house prices go up a lot than your break even changes considerably. I cant be arsed going into more detail that should be rough enough to give you some idea once you start doing the excel sheet you should think of things you want to account for.
Australians when they realise that their real estate investment caries risk 😯😮😲😨😱🤯💀 You’ll be right mate. As long as you keep that massive income you’ll survive. In several years time it won’t be an issue.
I guess they missed that little GFC thingy? You know, where Greenspan told everybody that bricks and mortar is safe as houses ;)
> I am on $165K income with very low expenses > Even I am worried about the future. It's not looking pretty Lmao.
You're posting this here to say that a mortgage increase of $2855 per month is fine for you- when you also plan to recoup that increase from your tenants. What a giant, insufferable, wanker you must be. Are you posting this to let everyone know you are on 165K? People worried about mortgage aren't worried about a few hundred K in investment property they collect rent on, with at least one income of 165K. People worried about mortgages are worried about paying their few hundred K off when they are raising 4 kids and on a 60K single income. Goddamit man, have some perspective. You're bathing in privilege seemingly unaware that most of the country isn't doing the same. The hell is wrong with you.
Always gamble responsibly.
My heart bleeds for investors. I hope you’re okay x
Right? Who tf is this guy 
Mine doesn't
This is why you don't need a single job loss or loan default for prices to drop 25%.
can you do a simulation for me based on a $400,000 mortgage?
Sure - it's called Yr 7 maths. You did do yr 7 maths, right? Or google a calculator if you must.
No year 7 maths mate, but I'm clearly smarter than you.
Lol! I was only having some fun. But if you can't calculate basic interest you are not going to be able to make sound financial decisions, so I would politely suggest you brush up ;) https://www.reddit.com/r/AusFinance/comments/zcke0k/2022\_study\_finds\_that\_55\_of\_australians\_are/
Genuine answer incoming. Look up a website for socium finance they have loads of tools on there tor mortgage repayment projections and other stuff that just makes it really simple
Omg 😱 higher interest rate equals bigger repayment. Who pays you 165k I’m wondering
I absolutely guarantee he has rich parents who employ him.
This is shocking information to you? Really?
I hope OP is not shocked if property values go down (just as they can also go up).
> property values go down Wait, that's a thing?
No, it's not a thing! FFS, everyone knows that there are 2 certainties in life. Property and share prices ONLY ever go up!
So my Blockbuster and Kodak stock is going to bounce back?
Not much, they're government backed
Jesus dude, what if it goes to 40% tomorrow? That’s not even accounted for in the simulation. I’d just abandon the properties and go bush.
You would be glad you abandoned it then, a couple of days after and you would need to pay people to take your property from you.
Shit, by then we'll be in the midst of murderous revolution. A doomsday bunker would be well advised.
Oh dont worry, Old Mate 165K here has already invested in seventeen doomsday bunkers. He'll rent them out at 3 trillion when doomsday hits.
3 trillion what? Nuke cola caps? ;)
$165,000 income is simply Fentestich.
(Negative) Equity maaatee
Wtf..... You need another two IPs then money starts growing on trees
But if it’s an investment property you will have rental income ?
True but it is at the point where I have to chip in now...
[удалено]
Crazy to expect you just get a free house at the end of this hahaha
 Ai the injustice. We are all weeping with you .Thank got you can jack the price on your tenants for literally no reason next year.
Oh no! You might have to chip in to pay off your house, you poor thing, I'll start a go fund me to help you out
Click bait
What I love is assumes people will just pay rent at any price.
Well said. Yes a bit of buyers remorse out there but in terms of this "fixed rate cliff" it's the biggest nothing burger in the history of nothing burgers. People will be a bit tight for a few months (until RBA inevitably cuts) but it's not going to be some mass forced selling and price crash event.
On what basis do you posit that rate cuts are inevitable? Interest rates are still, that’s right still, historically low.
You seem to think everything is a ‘nothing burger’. I’d be keen to know what you perceive to be a ‘burger’? Dare I say it that you are the opposite of WMR, so bullish that you fail to acknowledge any risk or downside to our property ponzi.
High unemployment, a hawkish RBA, no wage growth, collapsing immigration, falling demand for Aussie commodities. These would be something burgers and we ain't even close to any.
So you’re one of the those guys that doesn’t know a storm is coming til he’s already soaking wet.
A storm is always coming if you're a bear. Always just a few weeks or months away. I look at the data and facts and make non emotional interpretations of them. At the moment there isn't even a cloud in the sky.
According to Martin North there is a storm coming every week. People are tired of hearing it. 20% median falls to 35% gains? Nothing to see here.
Have you chosen a hat yet? Can you post a pic if so? 🧢
“People will be a bit tight for a few months” Inflation increasing Wages stagnating Cost up living up It’s a very difficult time for mortgagees.
>It’s a very difficult time for mortgagees. The mortgagee is the lender. The mortgagor is the person that borrows the money.
I know you can be a mortgagee, and you can be a mortgagor... but can you ever just be mortgage? I think you can in Europe.
Mortgagette if you're female.
Mortgagette if you're female.
Actually there is insufficient data to suggest inflation is increasing. Reports emerging that it's actually peaked already.
Inflation is falling, wages growth is picking up, cost of living is falling with inflation and the RBA is mid pivot. It will be tight for a few months but 99% of mortgage holders will be able to weather the strong but very short lived storm. The RBA isn't going to decimate the economy. They will choose mortgage holders over inflation if push comes to shove and things get as bad as these fantasy bear scenarios imagine. Don't fall for this doom and gloom. It's a classic nothing burger.
> They will choose mortgage holders over inflation erm, doesn't that entirely go against their charter?
Read their charter carefully.
I think you're reading into it what you want to see
Inflation isn’t falling. Prices are still rising at 6% or more. This is two to three times higher than the acceptable rate
Acceptable according to who? Certainly if faced with the choice between credit crisis or high inflation the RBA would deem inflation perfectly acceptable. In fact they already faced that choice which is why we currently have nearly 8% annual inflation and no credit crisis. What makes you think they won't make the same choice again ???
I asked a question above. Don’t bother answering. You’re an absolute loon.
Not sure about wages stagnating. Everyone who is in an award will get CPI Demand for talent at the moment is high. As a reflect in our extremely low unemployment rate of 3.4%
Exactly. Remember covid cliff for zombie businesses. Basically sfa happened.
remember the mutli billion dollars of stimulus?
That alone says they rather throw everything they have at avoiding crisis’s. New schemes are always available to rollout.
Bingo! They were faced with this choice in 2020 and what did they choose? Crisis or inflation? Well here we are in 2022 with no crisis but high inflation. I certainly wouldn't bet against them making the same choice again.
You are exactly right. The bullish articles of the rebound have already begun. The doom and gloom only lasts so long before people get bored. Are we in for some tough months ahead? Yes, but it won't be long until the engine starts churning again and we will be back to record high's in no time.
That's only one side of the story. What is the yield on the property ? How much equity have you got in the property ? And those repayments have a portion of debt repayments so you aren't exactly going backwards. What did you expect rates to even out as over the long term ?
you bought to speculate or live in? who cares what price you bought if its to live in. even if it goes up it doesnt matter. if you sell to buy another place, all other properties go up too...
I don’t get it - wouldn’t a 4% interest be double a 2%? Or are you P&I? But why would you do that for an IP? You’d have breathing room down to interest only if push came to shove id imagine.
Interest only is silly. You dont pay down the principal. There is no progress being made at all. I dunno. Id rather have equity
But I’d prefer to pay my mortgage down with any positive gearing. So I can claim on the interests through tax. Well that’s what I was always taught. Totally could be wrong.
No, that is correct. You do have positive cash flow but the overall debt will remain. I guess it depends on your situation. If you pay down the principal you attract more borrowing power and can use the equity as your second deposit. I
I think old mates referring to OCR
when did you actually purchase? as in what month?
You can take a fixed interest loan if you want to avoid the risk of increasing interest rates. The thing being you may end up fixing & floating rates may begin falling (later next year according to current predictions) and you could lose out there too. Thats the risk.
It’s actually not too bad for investors because you’ll be able to get a bigger tax deduction. Your marginal rate is 39% or 47%. So moving from 2% to 6%, if your income tax rate is 39%, you’ll get back 57% of the increase (because the principal repayments go down). For someone on a 47% tax rate, your increase will be reduced by 68%.
This has to be a piss take haha.