It is often tempting as we pay down debt or our incomes rise later in life to upgrade the family home. This may be for practical purposes such as accommodating a growing family or it could be to chase the lifestyle we wanted but couldn’t afford when we first entered the property market.

Whatever the reasons, the amount you pay for this upgrade should be considered carefully. There are a number of aspects to think about first:

  1. This upgrade happens later in life. At this stage, whilst your incomes may be higher along with your equity, you now have less time to repay this debt. Your thoughts will need to turn at some stage to saving for your retirement and this is difficult to achieve if you are concentrating on managing a large home loan.
  2. Your costs increase as your children get older so you have less funds to direct towards this loan. It is estimated that the average couple with two children between 14 and 24 spend $1900 per week compared to the average couple with children under five spending $1484 per week.
  3. In addition to this you may have become accustomed to a lifestyle adjusted around having a lower mortgage and interest repayments and it may be difficult to readjust to be able to make higher loan repayments at this stage in your life.
  4. The cost of maintaining an upgraded home often comes as a shock, for example there are likely to be increases in council rates, insurances, maintenance and utility bills, all of which need to be worked into the family budget.

When considering an additional loan for the new family home, we suggest that you take all these factors into account and mostly consider where your retirement savings are at – are they on par where they should be at your stage in life or does this balance need some work?

The expectation of downgrading the family home in the future to pay for retirement is a theory that often doesn’t make it to reality as the emotional impact of selling the place where your family grew up is greater than the financial one.

If you need assistance with determining whether you can afford to upgrade the family home, send me an email at or call 08 8409 4333.

Cassandra Macolino1


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Cassandra is the mother of two young boys and Senior Advisor at William Buck. She has been assisting clients achieve their financial goals for over 10 years with a focus on holistic strategic financial advice.