How Tanya Can Secure a $700,000 Investment Property in 2025

Tanya is a self-employed tutor and single mum in Torquay, VIC. She wants to buy a $700,000 investment property but currently faces a monthly shortfall under her lender-assessed figures. By boosting income, reducing debt and optimising her home loan, Tanya can expand her borrowing capacity and reach her goal.

1. Tanya’s Financial Snapshot

• Gross Income: $120,000 p.a. (projected 2025), $60,000 p.a. (2024)
• Lender-assessed Net Income: $66,000 p.a. (~$5,500/month)
• Dependents: 1 child (5 years old)
• Existing Mortgage: $420,000 (repayments ~$2,700/month)
• ATO Debt: $20,000 (repayments ~$607/month)
• HEM Expenses: ~$3,500/month
• Total Commitments: ~$6,807/month
• Equity in PPOR: $324,000 usable (home valued at $930,000)
• Savings: $15,000
• Total Debt Load: $440,000

2. Challenge: Negative Cash Surplus

With $5,500/month in assessed income and $6,807/month in commitments, Tanya’s current surplus is –$1,307/month. At this rate, she won’t qualify for a new investment loan.

3. Strategy to Boost Borrowing Power

3.1 Grow Gross Income to $200,000

By expanding her tutoring business or taking on part-time teaching, Tanya can lift her gross earnings to $200,000. This raises her net lender-assessed income to about $11,500/month, generating a surplus of ~$4,693/month and enabling a borrowing capacity of $610,000+.

3.2 Eliminate ATO Debt ($20,000)

Using savings and positive cash flow, she can clear the ATO balance. This saves $607/month and adds roughly $78,900 to her borrowing limit.

3.3 Switch PPOR Loan to Interest-Only

Changing her principal-and-interest home loan to interest-only cuts repayments from ~$2,700 to ~$1,925/month, freeing up another $775/month.

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

Free Instant Access

Get My Free Ebook

3.4 Combined Outcome

• Total Projected Surplus: ~$6,350/month
• Estimated Borrowing Capacity: $825,000+
• Meets the $560,000 loan needed for an 80% LVR on a $700,000 property.

4. Final Considerations

• Debt-to-Income Ratio: New total debt of ~$980,000 remains under the 6× income cap on $1.2 million.
• Use of Equity: Draw $140,000 from home equity for deposit, leaving $199,000 accessible.
• Future Rental Income: Estimated $700/week from the investment property will further boost borrowing power.

5. Recommendations

• Engage a mortgage broker who specialises in self-employed borrowers.
• Present strong 2025 financials to validate income growth.
• Consider lender’s mortgage insurance (LMI) if borrowing above 80% LVR to preserve cash.

Ready to Invest?

With a clear plan to grow income and manage debt, Tanya can secure the loan she needs in 2025—and so can you. For personalised advice on optimising your borrowing power, speak to an expert.