We have a calculator that uses your deposit saved, and how much you can afford for a mortgage repayment, to work out what you can bid for a house

We have a calculator that uses your deposit saved, and how much you can afford for a mortgage repayment, to work out what you can bid for a house

How do you know when you have saved enough for a deposit on a house?

You probably know the asking price of houses you have been looking at. And it is easy to assess your saved deposit as a percentage of that.

But the difference needs to be borrowed. Can you afford that?

We have a calculator that works out how much you can pay for a house. It figures out how large a mortgage your deposit and your payment capacity will support.

You should be conservative when inserting those two numbers into our calculator tool because you need to allow for some sensible headroom in case unexpected things happen.

And also don't forget the bank will apply a 'serviceability test' of their own, usually by checking you could still make the payments if the interest rate rose by a full +2%. You can do that in this calculator too. But when fixed mortgage rates are as low as they are now, the "+2%" can change the amounts involved a lot.

The 'be conservative' rule is important. Our economy isn't in great shape these days and it will be a while before it fully recovers. So risks are high everywhere, especially for family budgets.

That +2% extra for a serviceability test might affect what you can actually afford by as much as 15% of the maximum price you can realistically bid. That is a lot, so reaching too high in terms of neighbourhoods you target will likely only bring disappointment.

Best to be realistic.

Try the tool here.

*This calculator was developed by Calculate.co.nz and is in our calculator toolbox as part of our partnership with them.

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Wow. No matter how conservative I go (5% interest rate, with a weekly repayment I can easily afford) I can't get a number below $1,05 million. In reality, I'd be really stressed if I had a mortgage over $700k to pay back...

Who would want too pay that sort of money for a house , and get into that sort of debt. Jobs and incoming money are not often not guaranteed, especially during uncertain times.
But people are now able to buy very cheap money, and it will just inflate asset prices, and it is kicking the can down the road for future generations to solve.

Some advice.....if you cant come up with a 25% deposit don't buy. If you don't have the 25% live within your means and save. You will get there. Start with a zero cost budget and review all expenditure. It wont happen fast but you will be better off in the long run.

The problem is, you will get easily outbid by people who don't follow this advice. I mean, I completely agree with you and this is what I'm aiming for, I just feel like I'm the loser for not buying a house for 1.5 million with 10% deposit...

My advice is dont follow the crowd. If it doesn't make sense to you dont worry about what others are doing. But I know where you are coming from. Its always better to be conservative as you never want to be dependent on the kindness of friends let alone strangers to keep your house in a down turn. Strangers being the bank.