05 Nov 2022

How Much Income Is Needed for a 300k Mortgage?

300k Mortgage

Potential borrowers looking to take out a $300k mortgage in Australia will need to have a yearly income of between $50,000 to $75,000. With a salary between these price points, some individuals may want to apply for a more expensive home loan. However, this is not recommended by mortgage brokers and lending specialists. 

Lenders will generally recommend that potential borrowers only spend 30% of their income on housing expenses, including mortgage repayments. An individual who makes $50,000 a year will only have a monthly income of $4,100. 30% of $4,100 is $1,200 which is recommended to be spent monthly on housing costs. 

It is important to remember that monthly expenses can take up a large amount of an individual’s monthly budget. When shopping for houses and home loans, taking into account the amount of money you need every month to live comfortably is vital to your financial health. 

Mortgage brokers and lending specialists will calculate applicants’ borrowing capacity before approving them for a home loan. Borrowing capacity is calculated using your salary, debt-to-income ratio, credit score, and financial history. Unfortunately, there are a wide variety of factors that can impact a borrowing capacity, including the following examples:

  • The home loans terms, rates, and amount
  • The applicant’s credit cards, high-interest debt, and repayment history
  • The applicant’s dependents, assets, and monthly expenses

If you are interested in purchasing a home and applying for a home loan, reach out to the professional lending specialists at Mortgage House. We are prepared to answer any questions you have regarding borrowing capacity and assist you through the loan application process.

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