Things to consider, when budgeting to repay your new home loan

Make sure your monthly budget includes provision for council rates, body corporate fees, water and sewerage charges, and home maintenance and repairs.

Ask your broker, or homeowner friends how much to allow for these expenses. These costs that your landlord paid when you rented can cause stress if you don't allow for them in your budget!

It is also vitally important to budget for interest rate fluctuations if you have a variable rate loan. Ask your mortgage broker how much a relatively small interest rate increase might add to your repayments.

Many homeowners face financial hardship and often devastating loss because they fail to realise that interest rates can rise. It is easy to overlook allowing for rises in your budget when interest rates are falling or have been stable for some time.

It is also important to consider the likelihood that, for example, your partner might take time off work to have a baby, or to spend time with young children. Consider likely big expenses such as replacing your car, buying furniture and major appliances. Be sure you have adequate life insurance so your family still has a home in the event of your accidental death.

Consider insuring against accident or serious illnesses. Also consider income protection insurance. A financial adviser can help you put in place a financial plan, part of which will help make sure you are prepared for any eventuality.

(comments need to be approved before they will be displayed)