How Much More Can You Borrow than Your Salary?
As home prices continue to rise across Australia, many people are wondering how much they can borrow above their salary for a mortgage. Australia house prices grew 11.7% YoY in Jun 2022, following an increase of 19.6% YoY in the previous quarter.
So how much can you borrow above your salary for a mortgage?
Unfortunately, there is no easy answer as it depends on a number of factors, including your income, your current debts, your credit history, and the type of loan you are applying for.
That being said, most lenders will generally lend you up to four times your annual income. So, if you earn $75,000 per year, you could potentially borrow up to $300,000.
If you’re looking to borrow more than this, you’ll need to provide extra documentation to show that you can afford the repayments.
If you’re looking to borrow a large amount, you might need to provide evidence of your income and assets, as well as your spending habits. Lenders will also take into account your employment history and whether you have any dependents.
It’s important to remember that just because you can borrow a certain amount doesn’t mean you should. Make sure you only borrow what you can comfortably afford to repay, and consider all the other costs of owning a home before taking out a mortgage.
Of course, this is just a general guide and you may be able to borrow more – or less – depending on your individual circumstances. The best way to find out how much you can borrow is to speak to a mortgage provider or lender.