One of the first questions almost every home buyer asks is:
Whether you’re buying your first home, upgrading to a larger home, refinancing or purchasing an investment property, understanding your borrowing capacity is one of the most important steps before you start inspecting properties.
Many buyers make the mistake of searching for homes first and only speaking with a lender once they’ve found (the one). Unfortunately, this can lead to disappointment if the property is outside their borrowing capacity.
Knowing your budget before you buy allows you to:
- Search with confidence.
- Make stronger offers.
- Avoid wasting time on unsuitable properties.
- Understand your repayment commitments.
- Improve your negotiating position with sellers and real estate agents.
One of the biggest myths about home loans is that banks simply multiply your salary by a certain number to determine how much they’ll lend.
In reality, that’s not how lenders assess a home loan application.
Two people earning exactly the same income can receive completely different borrowing limits because lenders assess your entire financial position not just your salary.
As a mortgage broker with access to 40+ lenders, I compare lender policies every day to help clients understand their borrowing power and find loan options that suit their financial goals.
In this guide, you’ll learn:
- Typical borrowing ranges for salaries of $100,000, $120,000 and $150,000.
- What lenders actually look at.
- Why two people on the same income can borrow different amounts.
- Simple ways to improve your borrowing capacity.
- Why comparing lenders can make a significant difference.
What Determines How Much You Can Borrow?
Your salary is important, but it is only one part of the assessment.
Every lender has its own servicing calculator and lending policy.
Before approving your loan, they generally consider:
- Annual income
- Employment type
- Length of employment
- Existing mortgage repayments
- Personal loans
- Car finance
- Credit card limits
- Buy Now Pay Later accounts
- HECS/HELP debt
- Living expenses
- Number of dependants
- Savings history
- Deposit amount
- Credit history
- Loan term
Because every lender assesses these factors differently, your borrowing capacity may vary significantly from one lender to another.
This is one of the main reasons many buyers work with a mortgage broker rather than applying directly with a single bank.
Typical Indicative Borrowing Capacity (2026)
The figures below are designed as a general guide only.
They assume a typical borrower with:
- Single PAYG income
- Full-time employment
- Owner-occupied property
- Principal & Interest repayments
- Minimal existing debts
- No dependants
- Standard living expenses
- Good credit history
| Gross Annual Salary | Typical Indicative Borrowing Capacity* |
|---|---|
| $100,000 | $480,000–$570,000 |
| $120,000 | $580,000–$690,000 |
| $150,000 | $720,000–$860,000 |
Disclaimer: These figures are indicative only and are not a loan approval or guarantee. Your borrowing capacity may be higher or lower depending on your financial situation and the lender’s assessment criteria.
How Much Can I Borrow on a $100,000 Salary?
If you’re earning $100,000 per year, you’re already in a good position to enter the property market.
Based on the assumptions outlined above, a borrower earning $100,000 may have a estimated borrowing capacity of approximately $480,000 to $570,000.
However, that doesn’t automatically mean every borrower earning $100,000 will qualify for the same amount.
Let’s look at two examples.
Example 1 – Strong Borrowing Position
Sarah earns:
- Salary: $100,000
- Full-time PAYG employment
- No personal loans
- No credit cards
- No dependants
- Good credit history
- 20% deposit
Because Sarah has minimal financial commitments, she may qualify towards the higher end of the indicative borrowing range.
Example 2 – Reduced Borrowing Capacity
Michael also earns:
- Salary: $100,000
- Car loan
- Two credit cards
- HECS debt
- One dependant
Although Michael earns exactly the same salary, his borrowing capacity is likely to be lower because lenders take his existing financial commitments into account.
This highlights why online borrowing calculators often provide only a rough estimate.
What Could You Buy on a $100,000 Salary?
The answer depends on:
- Your deposit.
- Your location.
- Your borrowing capacity.
- The type of property you’re looking to buy.
Depending on your financial situation, buyers earning $100,000 may consider:
- Apartments
- Units
- Townhouses
- Villas
- Entry-level homes in more affordable suburbs
- Interstate investment properties
If you’re buying in Sydney, your borrowing capacity may be enough for an apartment or townhouse in selected areas, while freestanding homes may require a larger deposit, a higher household income or looking in more affordable suburbs.
Rather than guessing your budget, it’s always better to obtain a personalised borrowing assessment before beginning your property search.
How Much Can I Borrow on a $120,000 Salary?
A salary of $120,000 generally provides greater borrowing power and expands the range of properties you may be able to consider.
Using the same assumptions as above, a borrower earning $120,000 may have a estimated borrowing capacity of approximately $580,000 to $690,000.
At this income level, many buyers begin looking at:
- Larger apartments
- Modern townhouses
- Family homes in selected suburbs
- Investment properties
- House and land packages in growth areas
However, your borrowing capacity is still influenced by much more than your income.
Lender Policies Matter
Many buyers don’t realise that lenders assess income differently.
Some lenders are more favourable when assessing:
- Overtime
- Bonuses
- Shift allowances
- Commission income
- Casual employment
- Secondary employment
Choosing the right lender can sometimes increase your borrowing capacity without increasing your salary.
This is one of the biggest advantages of working with a mortgage broker who compares multiple lenders rather than relying on a single bank.
What Could You Buy on a $120,000 Salary?
Your options will depend on your deposit and financial commitments, but buyers in this income bracket may consider:
- Premium apartments
- Townhouses
- Family homes in selected suburbs
- New developments
- Investment properties across Australia
The right property isn’t determined by salary alone.
A personalised borrowing assessment gives you a much clearer picture of what’s achievable before you start making offers.
Why Two People on the Same Salary Can Borrow Different Amounts
This is one of the most common questions I receive.
Many buyers assume earning the same salary means they’ll receive the same loan approval.
In reality, lenders look at your entire financial position.
Factors that commonly reduce borrowing capacity include:
Credit Card Limits
Even if your balance is zero, lenders assess the available credit limit because you could access those funds at any time.
Reducing unnecessary limits before applying may improve your borrowing capacity.
Car Loans
Monthly repayments reduce the amount of income available for mortgage repayments.
HECS/HELP Debt
HECS isn’t considered “bad debt,” but compulsory repayments reduce your disposable income and can affect serviceability.
Dependants
Having children generally increases the living expenses used in lender servicing calculators.
Living Expenses
Lenders compare your declared expenses against benchmark figures.
Higher ongoing expenses may reduce your borrowing power.
Existing Mortgages
If you already own property, your current home loan repayments will also be included when assessing your application.
How Much Can I Borrow on a $150,000 Salary?
If you’re earning $150,000 per year, you’re in a strong financial position to access a wider range of property opportunities. However, it’s important to remember that your salary alone doesn’t determine how much you can borrow.
Using the same assumptions outlined earlier in this guide, a borrower earning $150,000 per year with minimal existing debts and no dependants may have a typical indicative borrowing capacity of approximately $720,000 to $860,000.
While this income level generally provides greater flexibility, lenders will still assess your overall financial position before approving your home loan.
Example 1 – Strong Borrowing Position
Emma earns:
- Salary: $150,000
- Full-time PAYG employment
- No personal loans
- No credit cards
- No HECS debt
- No dependants
- Excellent credit history
- 20% deposit
Emma may qualify towards the upper end of the indicative borrowing range because she has very few ongoing financial commitments.
Example 2 – Reduced Borrowing Capacity
David also earns:
- Salary: $150,000
- Two car loans
- Three credit cards
- HECS debt
- Two dependants
- Personal loan
Although David earns exactly the same income, his borrowing capacity may be significantly lower due to his existing liabilities and higher household expenses.
This demonstrates why it’s impossible to determine borrowing capacity based on salary alone.
What Could You Buy on a $150,000 Salary?
Depending on your deposit, location and financial commitments, buyers earning $150,000 may consider:
- Larger family homes
- Premium townhouses
- Higher-value apartments
- New house and land packages
- Investment properties
- Dual occupancy or duplex opportunities in selected locations
If you’re buying in Sydney, this income may provide access to a wider range of suburbs. However, in many premium locations, buyers may still require a larger deposit or a combined household income.
Before beginning your property search, it’s worth understanding exactly what your borrowing capacity is. This allows you to focus on properties within your budget and avoid the disappointment of finding a home that isn’t financially achievable.
How Can You Increase Your Borrowing Capacity?
Many buyers don’t realise there are practical steps they can take to improve their borrowing power before applying for a home loan.
Here are some of the most effective ways to maximise your borrowing capacity.
Reduce Your Credit Card Limits
Even if you never use your credit cards, lenders generally assess your available credit limit rather than your outstanding balance.
Reducing unnecessary credit card limits or closing unused accounts may improve your borrowing capacity.
Pay Off Personal Loans
Monthly repayments on personal loans reduce your available income for mortgage repayments.
Paying off these debts before applying may improve your serviceability.
Avoid Taking on New Debt
Buying a new car or financing expensive purchases just before applying for a home loan can reduce your borrowing power.
If you’re planning to buy a property, consider delaying major purchases until after settlement.
Increase Your Deposit
A larger deposit may:
- Reduce your Loan-to-Value Ratio (LVR)
- Reduce or eliminate Lenders Mortgage Insurance (LMI) in some circumstances
- Improve your loan options
- Reduce your monthly repayments
Review Your Living Expenses
Lenders compare your declared living expenses against benchmark figures.
Reducing unnecessary spending before applying can strengthen your financial position and improve your serviceability.
Choose the Right Lender
Every lender has different servicing policies.
Some lenders are more generous when assessing:
- Overtime income
- Bonuses
- Commission income
- Shift allowances
- Casual employment
- Self-employed income
Choosing the right lender can sometimes increase your borrowing capacity without increasing your salary.
Why Comparing More Than One Lender Matters
Many buyers simply apply with the bank they already use.
While this may seem convenient, it doesn’t necessarily mean it’s the right lender for your circumstances.
Every lender has different policies regarding:
- Borrowing capacity
- Income assessment
- Acceptable living expenses
- Self-employed applicants
- First home buyers
- Investors
- Family guarantees
- Construction loans
As a mortgage broker with access to 40+ lenders, I compare multiple loan options to help clients find a solution that suits their financial goals rather than relying on the policies of a single bank.
Even if two lenders offer similar interest rates, one may allow you to borrow considerably more than the other.
Should You Get Pre-Approval Before Looking at Properties?
Absolutely.
One of the biggest mistakes buyers make is attending inspections without knowing their borrowing capacity.
Pre-approval helps you:
- Understand your realistic budget.
- Search with confidence.
- Make stronger offers.
- Avoid disappointment.
- Act quickly when the right property becomes available.
Although pre-approval is not a guarantee of formal finance approval, it provides a valuable indication of your borrowing capacity before you commit to a purchase.
Frequently Asked Questions
Is salary the only thing lenders look at?
No.
Your salary is only one part of the assessment.
Lenders also consider your existing debts, credit card limits, HECS/HELP debt, living expenses, deposit, employment stability, dependants and credit history.
Does HECS affect borrowing capacity?
Yes.
Depending on lender HECS/HELP repayments reduce your disposable income, which can lower your borrowing capacity.
Do credit cards reduce borrowing power?
Yes.
Even if your balance is zero, lenders generally assess the available credit limit because you could access those funds at any time.
Can a mortgage broker help me borrow more?
Potentially.
Every lender has different servicing calculators and lending policies.
Comparing multiple lenders may help identify options that better suit your financial circumstances.
Are online borrowing calculators accurate?
Online borrowing calculators are a useful starting point, but they don’t assess your complete financial situation.
A personalised borrowing assessment provides a much clearer indication of what you may be able to borrow.
What if I’m self-employed?
Many lenders offer specialist policies for self-employed borrowers.
Depending on your business structure and financial documents, you may still qualify for competitive home loan options.
Related Guides You May Find Helpful
If you’re planning to buy a property, these guides can help you better understand the home-buying process:
- Borrowing Capacity Calculator – Estimate your borrowing power before speaking with a lender.
- Mortgage Broker Sydney – Learn how working with a mortgage broker can help you compare over 40 lenders.
- First Home Buyer Guide – Everything you need to know before buying your first property.
- Home Loan Pre-Approval Guide – Understand how pre-approval works and why it’s important.
- Mortgage Repayment Calculator – Estimate your repayments based on different loan amounts and interest rates.
- Buyers Agent Sydney – Discover how a buyers agent can help you find, negotiate and secure the right property.
- What Can You Buy in Sydney With $800,000? – Explore realistic property options within this budget.
- What Can You Buy in Sydney With $900,000? – See what’s currently achievable across different Sydney suburbs.
- How Much Deposit Do You Really Need to Buy a Home? – Learn how much you’ll need for your deposit and purchase costs.
- What Happens After Your Offer Is Accepted? – Understand the next steps from accepted offer through to settlement.
These resources are designed to help you make informed decisions and prepare confidently for your property journey.
Ready to Find Out What You Could Borrow?
Online borrowing calculators provide useful estimates, but they can’t assess your complete financial situation or compare lender policies.
That’s where personalised advice makes all the difference.
As a mortgage broker with access to 40+ lenders, I’ll assess your income, expenses, liabilities and financial goals to determine your borrowing capacity and compare suitable loan options on your behalf.
Whether you’re buying your first home, upgrading, refinancing or investing, I’ll help you understand your borrowing power before you start making offers on property.
Book Your FREE Borrowing Capacity & Property Strategy Assessment Today
Know what you can borrow before you buy.
Get expert guidance, compare over 40 lenders and receive a personalised borrowing assessment tailored to your financial situation.
Contact Truth Group today and take the first step towards buying with confidence.
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