First time home buyer in NSW’s Blue Mountains - any advice?

I’m looking to buy my first home in the coming months and have $100k for a deposit.

Am I better to look for a house around $650k (no stamp duty and at most $6800 LMI although St George offers $1 LMI for 15% down) or go up to $750k for a nicer house ($20k stamp duty and $16k LMI)?

I have a high income ($170-200k annually and no debt) but keen to keep repayments manageable.

 

Why? You have a high income and no assets. Isnt this the time to go harder?

 

I max out my super contributions and I’d rather balance my future investments in shares and property.

 

Not a finance related reply but, check the Bushfire Attack Level on any property you are looking at. I am a Town Planner who does a lot of work in that area and a high BAL may mean any future development (extensions, KDR, holiday letting etc etc) may be restricted.

 

Most definitely! Thank you for the reminder. Most properties don’t have the BAL listed so I’ve been calling agents to ask. I’m mostly liking in the lower mountains but keeping my options open.

 

Which is a great thing unless you want the option of stopping work before your preservation age. Also share investments in super generally have little or no gearing.

 

To clarify, my employer contributes 17% to super which actually takes me over the 25k cap. I’m investing in shares outside of super with the aim to retire early. I’m keen to buy my first property then in 3-5 years keep it as a rental and buy a bigger house. Just trying to figure out now if $650k or $750k makes more financial sense.

 

How much better are the houses priced at $750K compared to $650K?
Obviously you'll pay stamps of approx. $21K at $750K purchase price so there's that.
Therefore your LMI will be higher too and potentially slightly higher interest rate (not always the case depending on lender)
In my opinion it's pretty clear that $650K purchase price makes more financial sense.
Especially if it's just a stepping stone to buy a bigger property in 3-5 years.