Maximizing Simon’s Borrowing Power for a $700,000 Investment Property
Simon is 62 and has a combined annual income of $109,200: $52,000 from employment, $36,400 from income protection, and $20,800 from renting a granny flat. He owns a Mudgereeba home valued at $1.3 million with a $500,000 mortgage, leaving $800,000 in equity. With no other debts and zero savings, Simon can access up to $540,000 of that equity (80% LVR) or tap $140,000 from his superannuation for a 20% deposit.
Standard serviceability rules suggest a borrowing capacity of about $400,000–$420,000. However, including projected rental income from the new property (assumed 4.5% yield) lifts his capacity to approximately $560,000—enough to target a $700,000 purchase once the deposit is secured.
Repayments on a $560,000, 15-year variable-rate loan would be around $4,280 per month. Against that, rental income of $2,625 per month reduces his net out-of-pocket cost to about $1,655 monthly—a figure Simon can manage with disciplined budgeting.
Recommended Next Steps
- Consult a mortgage broker to compare investment loan products and interest rates.
- Use either available home equity or $140,000 from superannuation for a 20% deposit.
- Opt for a 15-year variable-rate investment loan with an offset account to minimise interest charges.
- Plan for the end of income protection cover at age 65 by building additional cash reserves.
- Maintain consistent rental income and set aside funds for potential vacancies or maintenance.
By leveraging his existing equity, accessing superannuation where appropriate, and structuring his loan smartly, Simon can confidently acquire a high-yield Queensland investment property and continue growing his wealth as he approaches retirement.
Explore opportunities and assess your borrowing potential here to develop a tailored plan for financial success.
Discover the #1 tax secret wealthy Australian property investors use to grow their portfolios faster — even in a high interest rate environment.
- Learn how to turn wear and tear into wealth
- See real examples of $15,000+ first-year deductions
- Understand how to structure your purchases for maximum after-tax ROI
Download Your Free Wealth Building Guide
This ebook reveals how to legally slash your tax bill while building long-term wealth through property. Learn the strategies savvy investors use to gain an edge — even before settlement.
- Maximise tax deductions and improve cash flow
- Understand Division 40 vs 43 and how to claim both
- Position yourself to reinvest and scale faster
