Alice & Jake’s Borrowing Power (Non-SMSF, 10% Deposit)
Financial Summary
- Income: $257,600 p.a. ($229,000 salaries + $28,600 rental)
- Expenses: $83,840 p.a. ($23,160 PPOR + $22,800 investment + $35,000 living + $2,880 credit card)
- Savings: $200,000
- Equity: $2,075,000 (PPOR $1,600,000 + investment $475,000)
- Borrowing Power: ~$650,000–$1,070,000 (max purchase ~$648,000 with LMI, DTI constrained)
$700,000 Property
- Deposit (10%): $70,000
- Costs (NSW): $41,000 (stamp duty $27,000 + conveyancing $2,000 + LMI $12,000)
- Total Needed: $111,000 (covered by $200,000 savings)
- Loan: $642,000 (serviceable)
Key Details
Borrowing Power Estimate
- After-tax income: ~$169,000 combined, plus ~$22,880 from rental
- Net usable income: ~$191,942 p.a.
- Annual expenses: ~$83,840
- Surplus for repayments: ~$108,000 or $9,000/month
- Loan Serviceability: At 9.5% assessment rate, capacity supports ~$1.07M loan, but DTI cap (~6× income) limits borrowing to ~$574,000–$650,000
LMI Adjustment
- At 90% LVR, expect ~$10,000–$12,000 LMI cost
- Including costs, max purchase power: ~$648,000 with a $584,000 loan (90% LVR)
Recommendations
- Verify Rental Income: Ensure $28,600 p.a. is accepted for full serviceability
- Engage a Broker: Secure pre-approval for up to $642,000 with 10% deposit and LMI
- Explore Equity Use: With $2M+ equity, access additional funds for future investments
- Consider Lender Policies: DTI caps and LMI rules vary—compare options
For tailored support in structuring your next property investment or upgrade, connect with our lending team today. Chat with us to discover your borrowing potential and financial success plan.
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