Estimating Borrowing Power and Investment Pathways for High Earners
Jeremy earns a gross annual salary of $270,000 and, under current Australian lending criteria (as of August 2025), could borrow around $890,000 on a new home loan. This calculation assumes a 30-year amortisation and an assessment rate of 9.15% (which applies the APRA-mandated 3% buffer over an average variable rate of 6.15%).
After tax and Medicare contributions, his net take-home pay is about $14,370 each month. Against monthly financial commitments of $7,100—including existing loans and credit card assessments—Jeremy has roughly $7,270 remaining to service any additional borrowing. That surplus supports a loan size in the vicinity of $890,000.
Purchase Power and Deposit Requirements
At a 90% loan-to-value ratio (LVR), Jeremy’s borrowing capacity unlocks home listings up to approximately $990,000. He would need to source a 10% deposit plus stamp duty and other acquisition costs. Without current cash savings, he might tap equity in his existing land holding (valued at $180,000 with a $100,000 mortgage) or contemplate selling that asset to raise the necessary deposit.
Leveraging Super via SMSF
For a long-term investment approach, Jeremy could use his $400,000 superannuation balance within a Self-Managed Super Fund (SMSF) and employ a Limited Recourse Borrowing Arrangement (LRBA). SMSF lenders typically allow 60–70% LVR, potentially funding a property purchase around $1 million. It’s important to note that SMSF loans usually carry higher interest rates (around 7–8%) and stringent compliance requirements.
Strategic Considerations
- Positive cash-flow opportunities: Consider co-living or multi-unit strategies in high-yield regions such as Queensland or Western Australia to align with SMSF objectives.
- Tax and structuring benefits: SMSF investments offer concessional tax treatment, but involve complexity, setup fees, and liquidity constraints.
- Professional advice: Given the regulatory and financial intricacies, obtaining tailored guidance from a financial adviser or mortgage broker is highly recommended.
In summary, while Jeremy’s income supports nearly $890,000 of new borrowing and unlocks properties close to $1 million with a 10% deposit, using an SMSF for property investment introduces additional costs and compliance obligations. He should weigh debt reduction, liquidity needs, and seek professional advice before finalising any strategy.
Discover the #1 tax secret wealthy Australian property investors use to grow their portfolios faster — even in a high interest rate environment.
- Learn how to turn wear and tear into wealth
- See real examples of $15,000+ first-year deductions
- Understand how to structure your purchases for maximum after-tax ROI
Download Your Free Wealth Building Guide
This ebook reveals how to legally slash your tax bill while building long-term wealth through property. Learn the strategies savvy investors use to gain an edge — even before settlement.
- Maximise tax deductions and improve cash flow
- Understand Division 40 vs 43 and how to claim both
- Position yourself to reinvest and scale faster
