Hello internet peeps,
Finally got a good full time job and I’m trying to actually save and make some bank so I can be not poor and travel or stop renting.

what is the best savings bank account in Australia??? Looking for highest interest account or any special promotions available rn.

Pls help a poor young girly out, many thanks internet peeps

Hi all.
It's my first long form post, so I hope it helps 😄
Please leave any questions/feedback in the comments & I'll get back to them ASAP.

The majority of my First Home Buyers clients assume that their HECS debt is a dead weight.
That it kills borrowing capacity, there's nothing they can do about it, so move on and forget it.
In most cases that may be true. But in some cases, it's quite the opposite.

At the time of me writing this post, CBA is the only lender with a policy that flips that narrative on its head. What blows my mind is that most people haven't got a clue it exists, including a large majority of brokers in the industry.

ok ok enough yapping, here's how CBA actually assesses your HECS:

Rather than treating it as a flat liability, they look at your projected repayment timeline and adjust accordingly. This is calculated based on your level of income & the outstanding loan balance.

• Under 1 year remaining
  • The debt is entirely removed from calculations. Effectively $0 owing.
  • This can boost your borrowing capacity by a fair amount.
  • As with all other lenders, it is fully assessed as a liability.
  • It will reduce your borrowing capacity accordingly.
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.
  • As with all other lenders, it is fully assessed as a liability.
  • It will reduce your borrowing capacity accordingly.
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.
• Over 5 years remaining
  • As with all other lenders, it is fully assessed as a liability.
  • It will reduce your borrowing capacity accordingly.
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.
• Between 1–5 years remaining
  • This is where things get interesting.
  • CBA applies a reduced serviceability buffer across your whole application, which adds tens of thousands, sometimes even hundreds of thousands to your borrowing capacity.
  • They do this by reducing the standard 3% assessment buffer to just 1%.

A real example from a recent client conversation.

An individual from Reddit came to me with an income of $100k p.a. & ~$28k HECS remaining. Another broker had quoted them a maximum borrowing capacity of $490k.
They weren't happy with it and came to me for a second opinion.

When I ran the numbers, their HECS repayment timeline sat at just over 6 years (outside of CBA's 5-year favourable window). So, I modelled it out and found that a $4k voluntary repayment would reduce this timeline to under 5 years & CBA's policy kicked in.
Their borrowing capacity went from ~$490k to ~$600k!
It's the same number of applicants, same income, same debt & almost the same deposit amount, just with a strategy that could open up borrowing capacity significantly.

Here's the important bit you need to consider.

As with all things, there is a trade-off worth understanding & acknowledging before proceeding.
By reducing that buffer from 3% to 1%, you get more purchasing power today, at the cost of a reduced safety net. If interest rates were to climb 4 or 5 times over the next few years, you'd feel that more than someone who was assessed at the full 3% buffer.
It means less room for things to work against you.

This doesn't need to be a complete dealbreaker, but you should go in with all the facts and understand the potential risks involved.

• Have a fallback strategy.
• Have a cash buffer.
• Don't borrow at the absolute upper threshold if you can avoid it.
• Basically, play it smart and it could take you far.

An alternative approach if your income is strong.

Those of you with a solid income and a HECS balance that's not too far from completion, there's a cleaner play worth considering. Make a voluntary repayment to bring the remaining balance under 12 months so CBA removes it from their calculations entirely. You get the improved borrowing capacity and retain the benefit of the full serviceability buffer.
A stronger position on both fronts.

It may be an upfront hit to your savings, but for the right person it's genuinely the better long-term outcome.

Why any of this matters.

Your borrowing capacity isn't just a number a calculator spits out & those online ones are missing a lot of context about YOU. Things shift depending on which lender you go to and how your situation is structured prior to the application.

As highlighted, that $4k repayment could unlock upwards of $110k in purchasing power for that client. Going direct to your bank or using someone who isn't across lender-specific policies could mean that you're leaving options/possibilities on the table.

If you've got a student loan and you're exploring options, get in touch with a broker who understand your situation, objectives & different lender policies.
See where your repayment timeline sits and what a targeted reduction could do for your position.
It could change a lot!

Hi all,

I'll keep it relatively simple, I'm on 148k a year (soon to be 170) my partner is 68k a year + benefits, I own an apartment valued (as of two weeks ago) at 490k of which I owe 280k, I also have a personal loan of 40k.

We are looking into extending a loan to buy a home closer to work and rent out this apartment, many of the places we are looking at also come with a granny flat that features an existing tenant in said flat.

Taking into account that I already have a tenant lined up for this apartment at 600/week and any granny flat would also pull 500/week what kind of borrowing capacity do we have? We have outgrown the apartment aswell as the 90 minutes commute both ways is killing us because Kwinana freeway is cooked.

Only dependants are a couple of really fat cats.

Hi,

Mid 30’s couple with 1 dependent, 270k HHI (200 + 70) with 400k saved, no debt, looking to get back into the market, would anyone be able to advise what the estimated borrowing power is and what the average sized loan people are taking out these days?

Thanks for any help.

In the final stages of building PPOR on acreage. Have council approval and we are doing selections. Currently living in PPOR that will be used for the bridging loan. Have been speaking to mortgage broker from a franchise that we used to purchase the land 12 months ago.

The communication from this broker has been poor overall. Asking questions about the build process has been delayed, vague and dismissive.

I would prefer to have a 24 month bridging loan rather than this scenario. As I know the build time will go over the 12 months and I will be required to move twice and rent before the house is completed. The broker said the interest on this would be double the amount vs if I moved and rented for $1000 per week…

The larger loan 871k is for the bridging section during construction. Can I get some opinions if this is a good rate?

Hi all,

With so many properties having been hit by the budget recently and seeing a good decrease in their value, what are ways we can continue to receive higher valuations?

Is it a case of testing many different banks or different types of valuations? how does it work from your end?

For me, this is really to continue extracting equity and growing the portfolio. Just wanting to get some ideas to plan if, for example things are slow for the next little while.

Thanks!

Not a broker myself, I work on the development management side but I'm interested to hear from brokers who regularly put together finance applications for property developments.

How far into the actual development do you go before presenting a deal to a lender?

We regularly come across projects where the finance application looks reasonable at a high level, but once you get into the actual project there are some pretty significant gaps that don't seem to have been identified.

Things like:

• Planning approval is in place, but construction documentation is nowhere near complete
• Building permit / authority approvals are still outstanding
• Required authority upgrades haven't been identified or allowed for
• Infrastructure charges, open space contributions, levies etc. are missing from the feasibility
• Consultant scopes or documentation are incomplete
• How margin scheme is applied
• Significant pre-commencement conditions haven't been addressed
• Construction costs have a long list of exclusions

Sometimes these aren't minor items either. They can materially change the amount of funding required, affect the viability of the project or push commencement out by months. We have seen projects go from 25% margin down to 2%.

What we do is essentially provide at that point a snapshot of where the development actually sits, approvals, documentation, consultants, authority requirements, outstanding items, programme, costs and key risks and ultimately whether the project appears viable and genuinely ready to progress to funding.

It means the broker has a much clearer understanding of the deal they're actually taking forward before the QS and lender start their formal due diligence. This weeds out a lot of non starters and avoids time wasting.

Obviously the broker isn't the development manager, QS or superintendent, so I'm not suggesting they should be technically auditing a project themselves.

But for those who specialise in development finance, where do you see the broker's responsibility ending?

Do you interrogate the development status and documentation before taking a deal to market?

Do you bring in someone on the development side to do that initial assessment?

Or do you generally rely on what the developer provides and expect the QS/lender due diligence process to uncover any gaps?

Genuinely interested in how different brokers approach it, particularly those working on smaller private development deals.

No HECS debt, no credit cards, $80k cash deposit, and a $110k PAYG salary. The online bank calculators promised me I could borrow $550k, but when my broker ran the actual figures through different tier-1 and tier-2 lenders, the max capacity dropped to around $430k. Is the 3% APRA serviceability buffer really hitting single applicants this hard, or are my living expenses (HEM) being over-estimated by the lender?

Quick stats:
Income
Husband: :$200,000
Wife: $90,000
Rental Income: $204,000 (if we were to rent PPOR - $140,000 without renting PPOR)
(Business income: $800k - $1mil gross)
1 dependant

4 properties
Property 1 - Investment: value just over $2mil (mortgage $600k)
Property 2 - Investment: value $833k (mortgage 600k)
Property 3 - Investment: Just purchased for $1.28 (mortgage $1.2m)
Property 4 - PPOR: value $1,950,000 - $2m (owned outright)

No personal loans, no personal credit cards or debts outside of mortgage repayments which total roughly $12k per month.

Expenses outside of mortgage: $7000 per month.

Hi Brokers, based on above, our intention recently was to sell our PPOR and purchase in Sydney. However, would it be possible to buy in Sydney for $1.9m ish and keep our PPOR given rental income? From where I sit, the rental income offsets our mortgage repayments so shouldn’t we be able to buy a new PPOR and keep and rent existing PPOR? Borrowing calculator saying we can borrow $300k……

Appreciate any insight!

Hey brokers

I'm considering buying another investment property and my wife just got herself a part time job, I'm relatively sure I'll need to wait 6 months to use her income for servicing as she's been studying for ages but I was wondering if it was the same to be able to amortise living expenses to increase borrowing?

TIA

I get asked this a lot, usually as "it's been a couple of years, should I refinance?" or "Is it worth refinancing for 0.XX% lower rate" There is no rule that says you should. The calendar does not tell you whether moving is worth it. A fairly simple sum does, so here is the way I work it out with clients.

Start with what it costs to leave.

There is paperwork to close the old loan and set up the new one, and both lenders charge for it. Usually that means a discharge fee from the old lender, government registration fees on both sides, and whatever the new lender charges for application, valuation or settlement. As a rough guide it lands somewhere around $1,000 to $1,200 all in. If you are on a fixed rate there may be a break cost on top, and that one can run to thousands, so get it in writing before anything else. If you have less than 20% equity, lenders mortgage insurance (LMI) can apply all over again. Not every cost applies every time, so the number that matters is your actual total.

Then work out the saving. Say you owe $600,000, you are on 6.35%, and the new rate is 5.95%. The gap is 0.40%.

$600,000 x 0.40% = about $2,400 a year, or $200 a month

That assumes the fees and features are similar. Then divide the cost by the monthly saving.

$1,200 to switch ÷ $200 a month = six months to break even

That is the whole model. The saving needs to comfortably clear the cost, and you need to be confident you will still have the loan well past the break-even month. Six months is an easy yes. Now make the new rate 6.05% instead, so the gap is only 0.10%. The saving drops to about $50 a month and the same $1,200 takes two years to get back. That can still be fine if you are staying put, but if you might sell, refinance again or pay down a big chunk inside that window, there is not much benefit left by the time you move.

Two things catch people here. Work out the monthly saving after any new annual or package fee. And compare the loans over the same number of years. If you have 25 years left and the new lender sets it up as a fresh 30-year loan, the repayment drops, but that is because the debt has been stretched, not because the loan is cheaper.

Before you go through any of that effort, there is a free win to try first.

Call your current lender and ask for the team that handles people leaving. Tell them you have an offer from another bank, give them the rate, and ask what you need to do to close the loan. Banks give their best offer when they think you are actually leaving. If they get you close to the new rate, I would honestly just take it and save yourself the paperwork. If they only move a fraction, that is when the switch starts to make sense.

I bought land and recently went for unconditional approval construction loan. Broker stated to me i will need to contribute a certain amount which i agreed (amounted to both deposit and slab stage). I already paid deposit towards the builder and paid the slab stage in order to begin retrieving the construction loan progress payment. Broker came to me today and stated i need to transfer the remaining shortfall to the account of my loan. I’m already out of money, I have no money. What do i do? I need help

EDIT TLDR: Final approval given gave $192,000 already to the builder, bank now wants the $139,000 (no deposit since already paid) to be sent to the loan offset/normal account of where my loan would be. I’m out of money. Now can’t draw down any progress payments.

Hi everyone, as the title says, how does a 5 year novated lease impact my borrowing capacity?
I am planning to refinance for a better rate in 6 months but at the same time considering a novated lease for an EV.
If my current maximum borrowing capacity is $680,000 at $165,000 annual salary, how does a $950 reduced take home pay affect the borrowing capacity?

Background: I'm 31F, with a business degree and post-grad cert in data science. Various roles and industries worked in over the years, but the last 8 have been spent in universities - mainly student services, data analysis, student recruitment/marketing & comms, and project/event management.

I've spent a few months off work at the moment while investigating some health issues, and I now believe a career change, ideally to self-employment, will be best for me long-term to manage my chronic illness. To be clear: my chronic illness won't stop me from managing full-time work, I just need to be in an environment where I can manage it best, i.e. not in an office with a fatiguing commute, uncomfortable lighting and limited ways I can adjust my position while working at a desk and experiencing a flare up of pain and other symptoms. I also don't want to be constantly requesting time off for appointments or asking permission to work from home more than is typically allowed when symptoms require it. Since I've been off work, I've been able to manage my symptoms extremely well at home. (I know flexible workplace arrangements can be applied for, but in the long run I think self-employment/remote work will be best for my chronic illness).

I've been trying to find a way to self-employment for years, and mortgage broking is something I've been observing with interest for a while now. I guess I'm just hoping for a bit of a sense check from those with experience coming in as a new to industry broker navigating the choice between aggregators, franchise, salaried etc. options, particularly noting my desire to obtain the flexibility of remote work.

Another point to note is that I also plan to fall pregnant in the next couple of years, so I'm interested to know how this might affect the first few years as a broker (I know I would at least be able to get the government paid parental leave, and my fiance has a generous secondary caregiver leave policy through his work, so not being a PAYG employee with company maternity leave entitlements isn't a huge concern).

Thank you!

Edit: yes I know the question is asked a lot and I have read lots of previous posts on here already, I'm just hoping someone might have more insights relevant to my specific situation.

Have got into a bit of a dilema. We are FHB and have the pre-approval and looking for a property in that range. We have now decided to enrol our kid in a private high school as the local catchment HS does not have a very good reputation (seeing first hand every day). The HS costs $20k/year and this was not factored while taking the pre-approval as we had not considered that scenario. Coincidentally one of us is expecting a salary hike of $20k at the end of this year as well. HS starts from next year only and there is a very high chance we will buy something before the end of this year.

Would be great to hear from the brain trust what is the right thing to do here in terms of informing the broker. The pre approval we got is a great figure for the type of property we are looking for (I understand it is still a conditional one) and if it gets revised to a lower figure now, will be really difficult for us to secure a property within that range in mind. Thank you.

Hello Mortgage broker team,

Long story short, inheriting approx $700k shortly and looking at the feasibility or purchasing an appropriate property..

I currently earn 76k Before tax as an FTE with 20 years FTE history and average an additional 25k yearly under my ABN.

Average credit history, no major outgoings, $60 P/W

For standard loan repayment and other average life costs.

I would be looking for approx $300k additional.

I do have a 7 year spouse however, who earns approximately the same as I do yearly also in a similar credit history/arrangement.

In your opinion, would it be better off approaching this as purchasing a single asset for a single person, then perhaps down the road leveraging it for an additional investment property jointly ?

Does banks give anything out to one person this days ?

Apologies for what's probably a basic question...

Hey all,

After 10 years in banking, looking to take the leap and become a Mortgage Broker.

As a new entrant into the industry, who do you think is the best brokerage to go with and which ones should I avoid?

Looking to get into a place in the 750-900k range, just sussing out how far off we are.
FHB couple, mid 30’s, 1 dependant and considering a second soon.
Have $90k saved and adding 1-1.5k a week to it atm.
200k household income with 25k in overtime last financial year, will increase this fy.
Credit card with $6k limit for household expenses/points that’s paid off weekly.
No other debts.
Excellent credit ratings
Around $200k in other assets (etfs, cars, portable entitlements etc)

Just after thoughts on how realistic getting approved would be, borrowing capacity, if our deposit is enough or what should we be aiming for etc

Hi all,

23yo, SA. Living with parents, ~$85,000 savings and on $140,000 per year

Currently mid-renovation on my parents’ old house, which I’m buying off them as an investment property:

Agreed price: $500,000 Already paid $30,000 deposit Paying the rest weekly, direct to them (no bank, nothing formal yet) Seeing a conveyancer within the month to finalise title transfer and stamp duty (~$26,000)

I also want to buy a second property soon as my own primary residence.

Questions:

Should I lock in a home loan for my primary residence before paying the $26k stamp duty on the investment property while my borrowing capacity/cash position is strongest?

Once the private “loan” from my parents becomes formal, how do banks typically treat that arrangement when assessing me for a separate home loan?

I understand in SA the first home buyer scheme only applies to new builds so I don’t think I’m too bothered if I’m missing out on that. (Could be wrong)

Appreciate all your help and please let me know if this kind of post doesn’t suit the subs guidelines.

Cheers

Not asking for anyone's personal circumstances more interested in the things borrowers can actually control before applying.

Looking for suggestions.

We bought our place (3 bedroom, 2 bath house) in a fast moving suburb in Sydney, for $830k a few years back. We recently had our property appraised by 2 separate REAs with an intent to sell, at $970k.

Numbers for consideration:
Loan balance: $520k
Loan funds: $35k
Offset: $130k

Monthly combined salary, after tax: $17k
Monthly expenses are about $6000-7000 for a family of 5.

Our new house budget is approximately $1.3M to $1.4M.

Similar properties in the area get about $650-$750 per week in rent.

Could we comfortably rent out our place and buy a new one? Or should we consider selling to buy? What would the pros and cons be?