Guide / Borrowing Capacity
Around $315,000 for a single buyer, or $295,000 between a couple. Here's where those figures come from, why a couple needs less than one earner, and how much cash you need to settle.
A single applicant with no children needs about $315,000 a year. A couple with no children needs about $295,000 between them, and a couple with two children about $310,000.
The repayment is $9,236 a month, which is about $111,000 a year. You need roughly three times that in income, because lenders don't assess you at the rate you'll pay. They add three percentage points first.
Start with the repayment. On $1.5 million over 30 years at 6.25%, principal and interest, you'd pay $9,236 a month. That's just under $111,000 a year.
Nearly every lender adds three percentage points to the rate before assessing your application, so it gets tested at 9.25%. At that rate the repayment is $12,340 a month.
That's $3,104 a month more than you'll actually pay, and $37,248 a year. The buffer is there so the loan still works if rates rise. It's also why the bank's answer comes out lower than the one you'd reach yourself, because you'd naturally start from the repayment you were quoted.
Your after-tax income has to cover that $12,340, plus your household's living expenses, with something left over. A single earner on $315,000 takes home $16,757 a month, so once the $12,340 is covered there's $4,417 left for everything else.
A couple needs $295,000 between them, which is $20,000 less than a single buyer, even with two people's living costs to cover instead of one. The reason is tax, not anything to do with the loan.
A single earner on $315,000 pays $113,920 including the Medicare levy and takes home $201,080. Split $295,000 evenly and each partner earns $147,500, pays $38,595, and the household keeps $217,810.
So the couple earns $20,000 less and has $1,394 a month more to spend. The top slice of a single $315,000 income is taxed at 45%, while two incomes of $147,500 each stop $42,500 short of that bracket. Lenders work from take-home pay rather than gross, so the couple's tax saving counts towards what they can borrow.
How evenly you split it matters. The same $295,000 earned as $255,000 and $40,000 takes home $17,101 a month. That's about $1,050 a month less than an even split, because the larger income runs into the top bracket. The more lopsided the split, the closer the household sits to the $315,000 a single earner needs.
A couple with two children needs around $310,000, which is $15,000 more than the same couple without them. After tax, that $15,000 is about $762 a month.
It comes from the living expense benchmark. Every lender compares the expenses you declare against a benchmark figure for your household and income, then uses whichever is higher. The benchmark goes up with the number of people in the house, and two children add roughly $750 a month to it.
School fees are counted on top of the benchmark, as their own line. The rule of thumb Shane uses is that every $1,000 a month of fees needs about $20,000 more gross income to cover it. So $60,000 a year across two children needs roughly $100,000 of income on its own, which dwarfs the $15,000 the children themselves add.
A $1.5 million loan usually means a purchase around $1.875 million. The deposit is $375,000, which is 20%, and at 20% there's no mortgage insurance to pay.
Stamp duty in New South Wales adds $84,412 at that price. Registration and conveyancing add a few thousand more.
If 20% is more than you want to put in, the deposit can be smaller. Mortgage insurance then applies, unless you're in one of the professions that qualifies for a waiver.
Those figures assume a clean slate. No car loan, no credit card, no study debt, no other property. Each one changes the income you need by an amount you can work out in advance.
Treat these as benchmark figures rather than a verdict. The same income produces very different answers at different lenders.
The living expense benchmark, how bonus income gets treated, whether an almost-repaid study debt counts at all. Each of those varies, and on a loan this size the spread between the most and least generous lender is often more than $100,000 of borrowing power.
So one bank's answer isn't the market's answer. If the first one doesn't get you where you want to be, the useful next step is to see what another lender's policy does with the same income. That part Shane can do quickly.
Send Shane your income and any commitments and he'll run it across the panel. You can also try the borrowing power calculator first for a rough sense of the range.
Yes, on around $315,000 a year with no other debts. That's a common income for a specialist, a partner in a firm or a senior executive, so it comes up regularly. A single applicant covers the whole assessed repayment on one income and pays more tax on it, which is why $315,000 alone buys what $295,000 does between two people.
$375,000 if you're buying at $1.875 million. That's 20% of the price, and 20% is the point where mortgage insurance stops applying. The deposit follows the purchase price rather than the loan, so the same $1.5 million against a $1.7 million property needs only $200,000 down. Mortgage insurance applies at that level, unless your profession qualifies for a waiver.
Yes. Most lenders count 80% of it and want two years of history, then average the two. Others take the most recent year on its own, which helps if last year was your strongest. On a package weighted towards bonus, that one choice can move what you can borrow by more than $100,000.
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Assumptions and sources. Income figures are modelled on a $1,500,000 owner-occupied loan over 30 years, principal and interest, with no other liabilities, clean credit and living expenses at benchmark. Repayments are calculated at a constant 6.25% p.a. and at an assessment rate of 9.25%, being the loan rate plus the three percentage point serviceability buffer required of lenders. Tax is calculated on the resident individual rates for the 2026-27 year, being nil to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000 and 45% above, plus the 2% Medicare levy, with no offsets or deductions. Couple figures assume an even split of household income unless stated. Transfer duty of $84,412 is calculated under the Revenue NSW schedule for 2026-27, being $52,237 plus $5.50 for every $100 above $1,290,000. Registration fees are the NSW Land Registry Services transfer and mortgage fees of $182.73 each from 1 July 2026. Conveyancing is an estimate and varies. Credit card assessment at 3.8% of limit a month is typical and varies by lender. Rates, policies and benchmarks change, and every lender assesses differently, so treat these as a guide rather than a quote. General information only, and not a recommendation about any credit product.
Send Shane your income and commitments and he'll tell you what each lender on the panel would approve, and which one gets you furthest. $0 brokerage fee.
Shane specialises in helping clients across Coogee, Clovelly, Bronte, Bondi, and all surrounding Eastern Suburbs.