A tech store offers 10% off and we rush in.
A car dealership announces a Boxing Day sale and we start negotiating.
Yet when a property becomes available at a substantially lower price, many buyers decide to wait.
Higher interest rates understandably make buyers cautious. But the purchase price deserves just as much attention as the mortgage rate.
Consider this illustrative example:
A property previously worth $1 million becomes available for $900,000.
With a 20% deposit in each case:
🏡 Your purchase price falls by $100,000.
💰 Your deposit falls by $20,000.
📉 Your mortgage falls by $80,000.
That smaller mortgage can make a substantial difference over time.
At an illustrative constant rate of 6% over 30 years, borrowing $80,000 less reduces total repayments by approximately $173,000—including around $93,000 in interest.
Actual savings depend on future rates, loan terms and repayments. But the principle is clear:
A lower purchase price reduces the debt you start with—and the interest charged on that debt.
Interest rates can change. Your agreed purchase price is locked in when you buy.
If rates ease later, you could benefit from both a lower starting mortgage and lower repayments. However, your purchase needs to be affordable at today’s rates, with room for further increases.
A property correction can give prepared buyers more choice, stronger negotiating power and a better entry price. A genuine discount should be checked against comparable sales, the property’s condition and its location.
If the right property meets your needs, the price represents value and the repayments fit your budget, this could be the time to pull the trigger.
Get your finance ready. Know your limit. Negotiate confidently.
At Advanced Finance Group, I combine my perspective as a Chartered Accountant and Finance Broker to help you assess the purchase price, borrowing capacity and cash flow together.
Thinking about buying? Message me before you make an offer—let’s work through the numbers and get you ready to act.
#PropertyBuying #HomeLoans #MortgageBroker #FirstHomeBuyer #PropertyInvestment #AdvancedFinanceGroup
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