Cost of living simply means the amount of money that is needed to cover your basic expenses such as food, housing, utilities, healthcare, etc. for a certain time period in a certain place. You must have heard, “That city is comparatively cheaper to sustain” or “This city is quite expensive”. These sayings show the comparability of cost of living from one place to another. 

The cost of living in Australia has been increasing year by year. The most expensive cities in Australia are Sydney and Melbourne, followed by Perth and Canberra. Housing (i.e house prices and rents)  is one of the most expensive items in Australia. Higher interest rates and price hikes have led to decrease in the borrowing power of peoples. 

As per the realestate.com.au data’s, across the NSW locations, the repayments on a mortgage at median house prices would eat up more than a third of the average household income in the area,on the home loan  mortgage. This means, a person has to allot one third of his average income on the monthly repayments. The other two third must manage all other expenses of foods, bills, healthcare, credit repayments, fuel, savings and whatnot. This clearly indicates the country’s cost of living has been growing at an alarming speed. 

A per the reports, below is the approximation, which includes the cost of monthly mortgage repayments based on average Australian housing prices:

• Living cost in Australia for one person: $2,835 per month
• Average living expenses for a couple: $4,118 per month
• Average monthly living expenses for a family of 4: $5,378

The federal budget of Australia 2022-23 has focused majorly on reducing the cost of living to relieve pressure on the individual’s pockets. It is putting home ownership in reach for more Australians. Government has upgraded some of the following schemes:

Home Guarantee Scheme:

As per the budget, part of an eligible home loan will be guaranteed under the Scheme, enabling Australians to enter the property market sooner with smaller deposits. This will support many more aspiring homeowners to achieve their dreams sooner. 

First Home Super Saver Scheme (FHSSS):

As per the budget, this scheme will help Australians to boost their savings for a first home by allowing them to build a deposit inside superannuation, giving them a tax cut. From 1st July 2022, the maximum contribution under FHSSS will be increased from $30,000 to $50,000 boosting the savings of the individuals compared with saving through a standard deposit account. 

Many other schemes are also available such as “First Home Loan Deposit Scheme” , enabling people to purchase their first home sooner with as little as a 5% deposit with a waiver of LMI. 

As the cost of living is increasing, banks determine whether you will still be in a comfortable financial position at an increasing interest rate, by assessing your borrowing capacity at a higher rate. You can contact us, in case you also want to know, if you qualify for a home loan, and what schemes will you be eligible for. We will guide you through the lending policies and interest rates of major banks and lenders and help you maximise your borrowing power and get your home loans approved.