Yahoo Finance Brutal reality of buying first home at 25: 'Boomers don't get it'
Danielle and her partner aren't able to save much money and dedicate a lot of their wages to their mortgage.
A young Aussie worker has opened up about the difficulties and sacrifices she has endured after buying her first home in her mid-20s. So many people around the country are desperate to get their foot onto the property ladder and Danielle Anstey managed to achieve that feat last year.
She and her partner bought a property in Melbourne that was too good to pass up and while she doesn't regret their decision, she admits it's been "pretty intense" since they got the keys. The 26-year-old told Yahoo Finance homeownership is fantastic because it's an appreciating asset, but that doesn't mean it doesn't come with tough downsides.
"The first six months were extremely hard," she said.
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"We were used to renting and having a bit more of our income that we could play around with. Now, pretty much the majority of our wage goes to the mortgage, so we've really had to sacrifice a lot."
She said if it wasn't for her partner's parents living close by and the odd free dinner here and there thanks to her side hustle of content creation, there wouldn't be "any joy in life".
Since the beginning of last year, the Reserve Bank of Australia has increased interest rates by a whole percentage point from 3.35 per cent to the current 4.35 per cent. The rate has been on hold since November 2023 and it's pushed many mortgage holders to the edge.
Mortgage stress kicks in when a household spends more than 30 per cent of their wage on their mortgage. A poll of Yahoo Finance readers revealed 78 per cent were forking out at least a third of their wage to service their home loan.
Comparison is the thief of all joy
The 26-year-old, who works in marketing, told Yahoo Finance it's difficult watching her friends and loved ones around the same age enjoy their 20s.
It's particularly frustrating at the moment as Aussies head over to Europe to enjoy a few weeks or months off, while Anstey and her partner endure a Melbourne winter and are forced to save every cent.
"Seeing everyone be able to jet off and kind of escape reality for a couple of months of the year is extremely hard," she said. "Especially when you work all year long.
"And you know that every step you make is just going to the house you don't really get a chance to enjoy the money that you've made."
'Boomers don't get it'
Anstey said there was a lot of pressure, particularly from older people in her life, to get onto the property ladder.
When she and her partner saw how expensive homes were getting, they knew they needed to hop on the bandwagon before they were priced out.
But she's sick of hearing from older Aussies about how to get through the difficult financial aspects of owning a home.
"People don't understand how hard it is right now and the Boomers are still saying, 'You need to stop complaining, stop whinging, make some sacrifices'," she said.
"But the sacrifice is our entire wage.
"Back then, they were still able to support a family. They were still able to squirrel away a heap of money and buy a home. That's not feasible at the moment."
Sacrifices have been a painful part of the process
The 26-year-old said they have had to say "no" a lot in the past few months.
Sometimes it's been fun things that would have allowed them to make memories forever and other times it was small things that hurt more.
"I couldn't buy my little brother a present for his birthday because I didn't have enough money," she revealed. "You know what I mean? It's sentimental things.
"It's like, not being able to travel to a friend's wedding because they had a destination wedding and I didn't have five grand for flights.
"I don't think [Boomers] understand the true meaning of sacrifices and what that actually means for a young person."
Anstey said they already spend as little money as possible on groceries and virtually never buy themselves anything as a treat.
Their payments are barely making a dent: 'It's the worst'
Danielle and her partner have been putting a significant amount of their pay into their mortgage since they purchased their property. But, she said you wouldn't know it if you looked at their home loan.
"The worst thing is, at the moment, we're only paying off interest," she explained to Yahoo Finance.
"Our home loan in the last year has only gone down I think maybe like $3,000 out of the tens of thousands of dollars that have been paid towards it.
"Our home loan is essentially the same as what we paid for it. It hasn't gone down."
She said it's near impossible to save much money and they're constantly worried about a new bill or charge or fee that will push them back down to zero.
"I finally got $1,000 in my bank account, which I hadn't had since I purchased the home," she recalled. "I was like, 'Yes, that's amazing'. And then our rates came in and the money was gone again."
But it's not all doom and gloom
Reading this might make anyone rip up their home loan application and run for the hills. But Anstey said in the year that she's owned her property, it's already gone up $100,000 in value from the purchase price.
"I really want to travel but the equity on our house already has just spoken major volumes to me that I've made the right decision," she said. "And in a couple of years, I could potentially use the equity to buy an investment property.
"I would have loved to have been able to not use every single cent of my savings or not use up every single cent that the bank had given me.
"But like that's just the reality of it. If I didn't do that, I would never be able to purchase a home."
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