How does buying a house become affordable?

biometrics said:
Just remember: your payments don't increase and they become worth less with time. I.e. it's tough at the beginning but becomes relatively cheaper.
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That's silly logic.

DO NOT link your debit orders to your installments.

Set them as high as you can afford and LEAVE them exactly like that and leave them alone. You'll pay it off in half the time.
 
SauRoNZA said:
That's silly logic.

DO NOT link your debit orders to your installments.

Set them as high as you can afford and LEAVE them exactly like that and leave them alone. You'll pay it off in half the time.
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I believe what he is saying is that a R10,000 a month today isn't going to be that much in 5 years time as inflation increases and prices go up and your salary increases. At first it nails you, but sooner or later you will be able to increase your payments quite comfortably.
 
SauRoNZA said:
That's silly logic.

DO NOT link your debit orders to your installments.

Set them as high as you can afford and LEAVE them exactly like that and leave them alone. You'll pay it off in half the time.
Click to expand...

He means that the installments do not increase year on year like rent does. Therefore taking into account inflation you are actually paying less and less each year and it becomes "easier"
 
I get that.

But at the same time every time the interest rate drops or installment go down as capital balance decreases people breathe a sigh of relief and spend that money elsewhere.

Keep it where it is every few hundred bucks extra makes a massive difference over 20 years.
 
I gotta agree...R30K joint earnings even is beyond most couples - and what if they have kids, car/furniture/clothing/insurance/med aid repayments....
Puts it beyond reach even further...
 
Agree with the paying it off as early as possible, you pay about double your house value in interest over 20 years so it's always best to chip away at that.

I'm not completely sure buying a house is always the right move, it does make sense to rather build equity than paying over rent but there is a lot more costs involved with buying a house i.e levy, rates and taxes, water etc not too mention maintainence.

Warren Buffet held off on buying a house for ages because he felt he got a better return from investing so not always the most sound logic to buy.
 
teamed209 said:
Agree with the paying it off as early as possible, you pay about double your house value in interest over 20 years so it's always best to chip away at that.

I'm not completely sure buying a house is always the right move, it does make sense to rather build equity than paying over rent but there is a lot more costs involved with buying a house i.e levy, rates and taxes, water etc not too mention maintainence.

Warren Buffet held off on buying a house for ages because he felt he got a better return from investing so not always the most sound logic to buy.
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Yes, but if your house price increases with inflation your house will be worth 8 times by the time you repay it over 20 years. That is using the doubling every 7 years (which isn't really true when inflation is low).
 
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