We are often told to avoid mortgage stress, but how do you know if you are even in it?
Everyone has a different level of debt that they are comfortable with.
Whilst there is no real set terms for what the definition of mortgage stress is, it is widely accepted that spending 30% or more of your pre-tax income on your mortgage would be stressful.
For example, if your combined household income is $100,000 (before tax), then mortgage payments more than $30,000 for the year (or $577 per week) would be considered mortgage stress.
So if you are feeling stressed about your level of debt – no matter what level of debt it is – it’s important to talk to someone about it, and see what help is available, or what you can do about the situation.
Some helpful tips:
Sounds simple, but watch what you are spending!
Reduce the amount of times you eat out or get takeaway
Buy groceries in bulk if it provides a discount
‘Cheap’ isn’t always the best option. Buying quality products can help you reduce costs over the longer term.
If you can, pay more than the minimum off your mortgage. If you get into the habit of doing this right from the start, you will pay your loan off quicker, save a lot of money in interest payments, and also have a bit of a buffer if interest rates increase.
If you would like to chat about where you are with your cashflow and budgeting to avoid mortgage stress, you can arrange a complimentaty 15 minute phone chat via our website.