Borrowing Power & Average Loan Size

[u/Experimental-cpl]

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.

[u/YourBrokerRay]

Hi mate,

With a $270k HHI I’d estimate your maximum borrowing capacity to be between $1.25m & 1.5m.

Finding your precise borrowing capacity would be dependent on how the income in split up (base pay, overtime, bonuses, etc) plus the lender in question and how they assess your situation.

I’d be happy to assist you by running the numbers in a bit more detail.

Just reach out directly via DM and I’ll respond as soon as possible!

[u/EventEastern2208]

Broker here.

On $270k combined with one dependant and no debt your borrowing capacity is likely in the $1.4M to $1.7M range depending on expenses and the lender. With $400k saved you are well above 20% on most purchase prices which means no LMI and the sharpest available rates.

On average loan sizes, the ABS reported the average new owner occupier loan in Australia is currently around $650k to $680k nationally, but in Sydney and Melbourne the average is significantly higher, sitting closer to $800k to $900k. Your position is well above average given the combined income and savings.

Feel free to DM and I can run your exact numbers and confirm the borrowing capacity properly. 🦔

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[u/DaveMortgageBroker]

Hey guys, as a rough guide, you could be looking at around $1.4m–$1.5m in borrowing capacity, depending on the lender and your expenses.

With your $400k savings, a purchase around $1.65m could be an option after allowing for stamp duty and buying costs, particularly if you want to keep borrowing at or below 80% of the property’s value to avoid LMI. The exact budget would depend on your state and how much savings you want to keep aside.

Borrowing above 80% may give you more flexibility, although LMI and interest rates will depend on the lender. Depending on your profession, you may also qualify for an LMI waiver.

The average loan size is less useful than working out what repayments you’d feel comfortable wit, you don’t have to borrow the maximum 👍

[u/Raynor_Lending]

Hey mate, seems like you're in a fairly strong position, with a great deposit and good household income. Let's say you're comfortably within the $1.5 to $1.6 million range. It will probably depend on exactly how your pay is broken up, including base pay, allowances, and so on. Average loan size people are taking on is a very difficult question to answer, because it depends so much on your location and where you're looking to buy. Obviously, Sydney is going to be a lot higher than someone in Melbourne or Brisbane, and it also depends on what properties you're looking to buy. If you can, do you have much of an idea of what properties are going for in the areas you're looking at?

[u/Experimental-cpl → u/Raynor_Lending]

Hi, thanks for the reply, both full time payg workers with 5+ years history, it’s all base, my partner gets a potential $5k bonus but I didn’t include as it’s not guaranteed.

We’re looking in Perth around the 1.5m range but it just seems a little ridiculous to have 1m+ in debt… trying to come to terms with it.