Ok, let’s take a step back to how much you can repay. How much can you repay per week, fortnight or month?

Thinking again about how much you can repay, and thinking about your income and expenses, choose a statement that is true for you (and be honest):

• I can repay this amount comfortably;
• I will be pushing myself to repay this amount, but I’ll be able to manage; or
• I will be able to repay this amount some weeks but I won’t be able to keep this up regularly or for very long.

If you chose 1 or 2—great, let’s move on.

If you chose 3, lower your repayment amount. Choose an amount such as $50 or $100 to lower it by and then choose an answer again. If you chose 3 again, lower it by the same amount again. And repeat until you can choose either answers 1 or 2.

Our repayment amount was $1,200 per week that on average we could pay back every week. It was on the number 2 scale for us—“I will be pushing myself to repay this amount, but I’ll be able to manage”. Some weeks we couldn’t make the full $1,200, but other weeks we could pay a little more, and on average it worked out to be about $1,200 per week.

Now comes the big test!

While you are still house-hunting, put this repayment amount into a savings or other account that you can’t touch over the next three months—minus any rent you have to pay.

This amount is an amount you can’t dip back into.

This will give you an idea if that repayment amount was a good choice for your situation.

In the next three months if you find that it is quite easy for you to put this money aside, then you could potentially increase it slightly. If you find it is a little challenging but manageable then keep it the same. And if you find it to be too challenging (e.g., you are dipping frequently back into that money) then consider reducing your repayment amount.

Working out how much you can repay involves a little trial and error. Test yourself to see if you can make your repayments while you are searching for a property, then adjust this amount to what you feel you can manage. If you feel at all like “I will be able to repay this amount some weeks but I won’t be able to keep this up regularly or for very long”, this is a sign to decrease your expected repayment amount to what you can manage.

Only you know how much you can repay.

Now it’s time to start understanding what you will really be repaying.