Borrowing
Small inputs, big swings
How a credit-card limit, novated lease or interest-only term can move borrowing capacity by hundreds of thousands.
Most buyers think borrowing capacity is set by income. It isn’t. Income is the ceiling — but four or five small line items decide where, under that ceiling, the bank actually lands. Move them, and the same household can shift its capacity by $200k–$400k without earning a cent more.
$5k
Credit limit costs ≈ $25k borrowing power
$1k/mo
Novated lease ≈ $130k less borrowing
+1y
Interest-only term shrinks capacity ~7%
The five levers — ranked by impact
Approximate impact on borrowing capacity (single PAYG, $180k income)
$ change in capacity
Why each one moves the needle
- Credit-card limits. Banks assess on the limit, not the balance. A $20k limit you never use still costs you ~$100k of borrowing capacity.
- Novated leases. Treated as a hard liability with no asset offset. The biggest silent killer of capacity in two-income households.
- Interest-only terms. Lenders reverse-engineer P&I repayments over the remaining term. The shorter the remaining P&I window, the higher the assessed payment.
- HELP/HECS. Treated as a percentage of gross income, before tax. A $90k balance can clip 5–8% of capacity.
- BNPL & “small” recurring debits. Captured by most major lenders’ statement scrapers and assessed as ongoing commitments.
You don’t need to earn more to buy better. You need to spend differently — for 90 days.
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