Housing
The costs of buying a home that never appear in the asking price
The purchase price is the number everyone negotiates. The running costs are the number that decides whether the purchase works.
Wen Zhao
Planning writer, Finance Ridge
Wen writes about retirement arithmetic, insurance and decisions that only pay off decades later.
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16 articles
Debt & Credit
Zero per cent is a rate, and the price can be somewhere else
Interest-free offers are real, and the cost is usually relocated rather than removed.
Housing
Loan-to-value bands are where mortgage pricing actually jumps
The relationship between deposit size and interest rate is not smooth. It steps, and the steps are worth aiming at.
Housing
Service charges rise on somebody else's decisions
Buying an apartment means buying into a cost you do not control, and the arithmetic of that is rarely done before completion.
Housing
Lenders calculate what you can borrow, not what you can afford
An affordability assessment is a risk model run for the lender's benefit, and its output is a maximum rather than a recommendation.
Housing
Housing costs above a third of income squeeze everything else
The ratio is a rough convention rather than a law, and the reason it keeps appearing is that the arithmetic downstream is…
Housing
Sharing a home cuts the largest cost by the largest amount
No spending change available to most households comes close to splitting the housing bill, and the arithmetic is worth stating…
Debt & Credit
Clearing a loan early competes with everything else the money could do
Repaying debt produces a certain return equal to the interest rate. Comparing it with anything else starts there.
Debt & Credit
Daily interest and monthly interest are not the same debt
Two agreements quoting the same rate can cost different amounts. The difference is how often the interest is calculated.
Debt & Credit
When the payment is smaller than the interest, the balance grows
A debt can increase while you pay it every month. The condition is simple and easy to miss on a statement.
Housing
Negative equity is a timing problem until you have to move
Owing more than the property is worth changes nothing month to month. It changes everything the moment you need to sell.
Housing
A deposit is saved in one market and spent in another
Saving for a home means running against a moving target. Whether you gain ground depends on two rates at once.
Housing
Interest-only borrowing needs a repayment plan that is not the house
Paying only the interest keeps the balance intact for the whole term. Something else has to clear it at the end.
Housing
Two incomes on one mortgage is a decision about the worse case
Borrowing against combined earnings raises what a lender will advance. It also ties the commitment to both incomes continuing.
Housing
Most home improvements return less than they cost
Spending on a property is not the same as investing in it. The relationship between outlay and value is weaker than assumed.
Housing
A longer commute is a cost paid every working day
Cheaper housing further out is a trade, not a saving. The other side of the trade is money and time, both recurring.