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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FAQ
Frequently asked
- Which input matters most for property returns?
- Capital growth rate has the largest long-term impact, followed by holding period, then interest rate. Yield matters mostly for serviceability and cashflow, not total return.
- How much does a 0.5% rate cut actually save me?
- Roughly $5,000/yr per $1M of debt, or ~$125k over a 25-year loan. Refinancing every 2–3 years to stay competitive often beats fixing for 5 years.
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Written & reviewed by
The NOVAQ founders
Every NOVAQ article is written or reviewed by our founders — both Chartered Accountants who actively invest in Australian property. Not journalists, not interns.
Shreyas Doshi
Co-Founder · Chartered Accountant
15+ yrs in international tax, compliance, structuring and advisory across Deloitte, PwC and a large multinational mining company. Multi-state personal portfolio under different structures.
Yuvraj Kapadia
Co-Founder · CA, CPA, SMSF Specialist
ASIC-registered SMSF Auditor, Tax Agent, licensed Finance & Mortgage Broker and Buyer's Agent. Multi-state personal portfolio under different structures.
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