Links Property Finance · Home loans for first home buyers: How Much Can I Borrow on $100k?

An illustrative couple of teachers, each on $100,000 with no debts, can borrow about $900,000 on our calculator assumptions. They buy a three-bedroom house in an outer western suburb for $900,000 under the 5% Deposit Scheme: a $45,000 deposit, an $855,000 loan and no lenders mortgage insurance.

Their deposit is savings plus a $20,000 gift from parents, backed by a signed gift letter. Above $800,000 the first home buyer exemption becomes a concession: duty is about $19,590 instead of the standard $34,687.

Between $800,000 and $1 million, each extra dollar of price adds about 20 cents of duty on top of the 5 cent deposit.

The repayment is about $5,130 a month, and the lender tests it at about $6,880. This is an illustrative example, not a Links client: figures are rounded, at the 6% example rate over 30 years.

About $425,000 as a single applicant with no debts on our calculator assumptions. Different lenders apply different expense benchmarks and buffers, so the real range is wider. A partner’s income is the biggest upward lever; debts and HECS are the usual downward ones.

Roughly $900,000 on the same assumptions. Each income is taxed separately and the living cost benchmark for two adults is less than double a single adult’s, so the combined figure is more than twice the single figure.

Often, depending on what you buy: for a single buyer with a solid deposit, it reaches an apartment in many middle and outer suburbs and a house in the outer ring. In the inner ring it usually takes two incomes or a guarantor.

Under the 5% Deposit Scheme, about $22,000 plus purchase costs. Outside the scheme, 20% of the price avoids LMI, which is about $106,000 on a $530,000 purchase. In between, LMI applies unless a guarantor covers the gap.

Gross. Lenders start with gross income, apply their own tax calculation to reach net income, then deduct living expenses and commitments. Overtime, bonuses and allowances are counted at a discount by most lenders.

The actual rate plus a 3 percentage point buffer, so about 9% in this example. Some lenders also apply a minimum floor rate, which can be higher than rate plus buffer when rates are low.