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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