I’m currently looking for an apartment, and I’ve recently crunched some numbers as to what it would look like for me and my partner to live in debt.
This is purely hypothetical, and is the worst case scenario where we don’t have overtime or other sources of income outside our primary. This also assumes we never get a pay raise for the duration of the loan, no inflation and not bank interest increase as well.
After accounting for the essentials, the remainder for the 2 of us would be around €752, and I feel incredibly anxious and depressed knowing that this is all we’ll have left towards the end of the month.
I’m looking for some insight from people who already live with a mortgage.
- How do you get by in life?
- How do you manage to save up for a rainy day?
- Do you feel like you’re restricting yourself from enjoying life?
- How do you manage your anxiety surrounding the matter?
Thanks in advance.
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Posted by ShawnStrike
20 Comments
And here i am, thinking of what it would be like to still have 700 left till the end of the month.. i dont even have any debts or loans 🤣
Hey, at least i get a taxed government bonus every now and then…. viva malta u viva cola!
That looks pretty accurate (source 15 years with home loans).
The two things that appear out of norm.. Too much paid in insurance and 100eur clothing per month?
This is where I get stuck on how the base price for property is about 250k. I don’t get it. Even on a decent salary, it’s too heavy a payback, especially at a time when many people are buying solo (even though I suppose 30 years ago people also bought solo since many women still didn’t work).
But yes, 2 people on a regular salary (that’s for both of you right, so circa 25k each, which is normal and good) still need to be careful, which is annoying.
Having said that, in my opinion, you live once eh, so enjoy that 700 leftover.
No idea why this showed up in my feed. I’m in the US but the numbers are similar (except I got a giant ass house).
Basically, I’ve had to learn financial discipline. I can have 1000-2000 leftover per month, if I am financially disciplined.
Saving €750 a month after paying your investment and put money into a pension plan makes you anxious and uneasy? The rule of thumb is to not have your loan repayment exceed 30-35% of your gross income, so you are safe. Also, that is truly your worst case scenario as the loan repayments remain static while your pay will increase.
To reduce your anxiety further, set up an emergency fund and keep it liquid. An emergency fund is ideally 3-6 months expenses put aside for you to use on a rainy day.
is your net for 2 people i didnt understand
€ 300/month insurance? That looks wrong
Utilities for two people pm is 60-70 eur, Internet + mobile 60 eur, fuel 60 eur, food and expenses related to home 700 eur. These are my numbers for two people. Mortgage is 719.
Are you coming from renting or living with family? It might be a matter of perspective. Having rented for 17 years and now having a mortgage I’m probably about the same month to
month and the money is going into a property the equity of which will ultimately be mine, not in a landlords pocket. So it feels less anxiety inducing.
Emergency fund for fixes in the apartment is important though, prioritise that
That’s pretty accurate. We try to lessen the essentials by changing food brands and not buying too much freezer food. Also we try to limit fuel by taking public transport a bit more where possible.
What did you include in the essential costs of €800?
Saving 750 euros a month is good, this is normal. What’s making you feel so anxious?
If you are earning 25k and managing to save 20% of that after you are also paying a pension fund, then you’re doing pretty fine. It shouldn’t take you too long to build a “rainy day” fund with 6-12 months of salary.
I had a bit of anxiety when I took my loan initially but it settled after a few months. I coped by cutting back on anything which is extra.
The second my paycheck came in, I’d first decide how much of it I was going to save, and then start spending. There were periods where I saved nothing.
Don’t overthink it, Maltese banks will not give you a home loan you can’t afford. The underlying problem is that this only borderline affordable, and no you will not be living some luxurious lifestyle and yes you need to be careful.
Here is probably some of the best advice you can nearly ever get, a mortgage is the best loan you can ever get in your life and you actually should not really aim to pay off first. You are typically better off mentally to just save money at 0% than to just pay off the loan as soon as possible. You won’t get another loan again with such favourable rates.
You are doing very well, and I especially like the fact that you have a pension plan and are contributing a solid amount to it. Do not suffer from anxiety go ahead and buy The Property.. take as much as as you can from the bank of mom and dad if this is possible
Imagine spending 800 euro on groceries, saving up 750 euro and still being anxious 😂. You are in like top 10% financially.
A lot of these values seem quite a lot for normal living in malta
800 “essentials” but you have all your loans/bills separate, so im guessing these are just groceries? If so 800 for 2 people is quite a lot.
Also utilities and internet shouldn’t be 170 per month. In the summer with the AC on full time almost we pay 60, internet should nto be more than 30-40euros in malta. So that figure should go down to 100.
Insurance, im assuming you have some very expensive car or no no claim benefits?
We have the same loan so I’m assuming a similarpriced property we pay about 700 insurance for home and life. Our car insurance + license were 500 each. That brings us to 1700 for 2ppl which is less than half of what you pay, imho yours are quite high.
We are in a very similar situation but save about 500 more per month due to what i mentioned.
Also regarding your mortgage, it looks good. Normal advice is to try and soend less than 30% of your take home pay on rent/mortgage, which you are exactly at.
But remember that in time your mortgage will be less and less due to inflation, whereas the other things are likely to rise. So in 10/20/30years 1000 foe your mortgage will go down to 20%/10% ofy our pay as your income increases and 1000eur at, that time will be worth less.
What site/app did you use for this?
I currently earn less and pay more in monthly loans and still manage to save money. I just stay in and play video games to relax. I don’t go out often and when I do usually it’s to friends houses/my parents or I invite people to my house and we play board games. It’s incredibly cheap outing and still a ton of fun. I have enough savings to go out more or even travel abroad for vacation if I wanted to though.
I think going out to restaurants and stuff or vacations abroad is one of the biggest expenses people have and I guess not everyone likes the shut in life so I guess I’m lucky that I do.
Well if your looking to splash out on a 300k home one of you needs to get a small 400€ a month par time job. Or studdy more to up your jobs as 54k a year between 2 people is not much. Or lese find a 200K property and your loan repayment would be less.
What’s the alternative? Renting? Is that cheaper?
Welcome to being an adult.