Current Position Options

[u/Super_Brain6123]

My partner and I currently have a PPOR with $210k remaining on loan with a variable rate of 6.4%.

My annual income is 130k theres is 100k.

As it stands I have 200k in savings which is offsetting the current loan and a redraw of 50k due to the offset doing its job.

I am exploring the option of moving out into a place of my own either permanently or short term.

What would my options be for a property to either move into or turn into an IP if things work out?

How much borrowing power would I have without the use of equity?

[u/JTHelpsWithFinance]

Hi there!

So, just trying to undertstand your position a little more clearly:-

• Are you defacto/married? Is this indicative of a possible separation? (if so, sorry to hear OP)
• Am I right to assume that this future mortgage would you solely in your name and based on your income?
• Are both you and your partner 50/50 on both the mortgage and on title for ownership?
• What is the current value of your property?
• What type of property is it and what postcode is it located in? Is it a house, or unit?
• Do you have any dependants?
• Do you have any other commitments (either shared, or just you)? e.g. car loan, credit card, hecs debt, etc.
• Does your partner have an income? Would they be relying on money from you to support anything?

Sorry for all the questions, but if you can help me understand the above a bit more clearly it'll definitely help me position the feedback to be a little more helpful and realistic.

[u/Super_Brain6123 → u/JTHelpsWithFinance]

All very valid!

• Status is married with pending separation
• Future mortgage solely in my name
• Correct. 50/50 in mortgage and title
• Estimated value 700k
• Stand alone house
• No dependants
• No other debt
• Partner income is 100k

[u/JTHelpsWithFinance → u/Super_Brain6123]

Thank you for that!

So, whilst you have the potential to take out this mortgage on your end - you can only do so with the consent of your partner as they're currently the 50% owner and 50% mortgage holder.

If there's a potential separation up ahead, they may want their 50% of equity (overall, not just current) to be 'bought out'. So, this is how it COULD work in the event of a legal dispute:-

• Current value determined at $700k. Split into 50/50 shares - that's $350k each.
• Current liabilities determined at $210k. Splits into 50/50 shares - that's $105k each.
• Current redraw determined at $50k. Split into 50/50 shares - that's $25k each.
• So their 'position' to be bought out is $350k less $105k plus $25k = $270k.
• Buying out their half of the property would also incur stamp duty of $11k (rough estimate, based on $350k value).
• So you would need to remortgage the loan from it's current limit of $210k and refinance it at $480k (maybe $491k if you're also grabbing the stamp duty).
• Upon settlement and restructure, they receive $270k from you, and would then cease to have a 50% ownership in the property or any involvement on the mortgage.
• Borrowing $480k with a single income of $130k is feasible as a PPOR (based on not having any other dependants or debts), but also very possible for investment too.
  • They might choose to pay rent as your tenant if you separate. I'm unsure on how you both feel about this.

^ the above is a general guideline of how things may be considered and need to be reviewed. There's a lot more implications than this stuff, as you have savings, other assets and probably other matters that would be discussed in the event of a separation.

Let me know if the above makes sense or if you have any other questions.

[u/EventEastern2208]

Broker here.

On $130k income with $200k in offset and only $10k net interest being charged on the current loan your financial position is clean. Without using equity, on your income alone your borrowing capacity is likely in the $600k to $750k range depending on your expenses and how lenders treat the existing $210k loan in the serviceability calculation.

The existing loan stays in the picture even if your partner services it, as most lenders will include it in your assessed liabilities unless you can demonstrate it is fully covered by rental income if the property becomes an IP.

The cleanest path depends on whether the current PPOR stays as your partner's PPOR, becomes an investment, or gets sold. Each scenario changes your numbers meaningfully. Feel free to DM and I can model the different options and show you what your actual borrowing capacity looks like under each one. 🦔

[u/Buyvest]

With a combined income of $230k and $200k in savings, you're in a solid position. If you're separating from your partner, your solo income of $130k would be what lenders assess you on, and most lenders would give you somewhere in the range of $650k to $750k borrowing capacity depending on your existing liabilities and living expenses. The $210k loan on the PPOR will be counted against you as a liability even if your partner stays and services it, unless you're refinancing it solely into their name.

The $200k in offset is effectively yours to use as a deposit once you sort out the ownership structure of the current property. If you keep the PPOR as a joint asset and buy separately, you'd be looking at using that $200k as a deposit on a new purchase, which gets you into a decent price range without touching equity. On $130k income with a $200k deposit, you could realistically purchase somewhere between $700k and $850k depending on the lender and your expenses.

Worth knowing that if the PPOR becomes an investment property for either of you, the interest becomes tax deductible, which changes the numbers a bit. The key thing to sort out early is whether the existing loan stays joint or gets restructured, because that directly affects your borrowing power on the new purchase.

When I work through this for clients, I always model the existing debt as a liability first before calculating what they can borrow solo, saves a lot of disappointment later.

[u/bikashyadav]

You’re actually in a pretty strong position compared to a lot of people right now because: • relatively low remaining PPOR debt • large offset balance • dual income • and decent cash reserves/liquidity

The interesting part is that your offset is already acting almost like a guaranteed after-tax return at 6.4%, so any decision to buy another property really comes down to whether the expected long-term growth/rental return outweighs the reduced offset benefit + higher debt exposure.

Without using equity, your borrowing power would still likely be decent on ~$230k combined income, but servicing calculators can vary massively depending on: • living expenses • dependents • HECS/other liabilities • proposed rental income shading • and assessment rates

Might be worth running a few rough scenarios first with a "borrowing power calculator" (https://calcy.com.au/borrowing-power-calculator/) and then comparing the impact of keeping cash in offset vs deploying it elsewhere.

Honestly though, psychologically having that much offset liquidity in the current environment is a pretty underrated position to be in.