📐 Module 1 of 4 · Finance Strategy
Serviceability &
Borrowing Power
Banks do not assess what you earn — they assess what you can service at a rate 3% above what you will actually pay. Understanding this changes everything.
⏱ 10 min
📖 4 lessons
📝 Quiz after
What this module covers
Four things every investor must understand before applying for finance.
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How banks calculate serviceability
The assessment rate, HEM benchmarks, and why your income matters less than you think.
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Credit card limits and debt
Why a $20,000 unused credit limit costs you $80,000+ in borrowing capacity.
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Debt recycling strategy
Converting non-deductible home loan debt into tax-deductible investment debt.
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Maximising your capacity
Practical steps to clean up your position before your broker submits.
How banks actually assess you
One formula. Three inputs. Most applicants get it wrong.
Actual rate
6.5%
What you pay on your loan
+
APRA buffer
3%
Mandatory stress test
=
Assessment rate
9.5%
What the bank tests you on
💡 On a $700,000 loan at 6.5%, the bank tests whether you can afford $5,542/month — not the $3,792 you will actually pay. Plan your structure with this in mind.
The credit card trap
Banks assess your limit — not your balance. An unused $20K card costs $80K in buying power.
No cards
$900,000
$900K
$10K limit
$860,000
$860K
$20K limit
$820,000
$820K
$50K limit
$700,000
$700K
⚡ Fix: Cancel every credit card you do not actively use before your broker submits. It takes 30 days to clear from your credit file.
Before you apply — four actions
Do these before your broker runs the numbers and you will qualify for significantly more.
✂️
Cancel unused credit cards
Every $10,000 of unused limit reduces your borrowing capacity by approximately $40,000.
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Pay down personal loan balances
Existing repayments directly reduce your serviceable income calculation.
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Build genuine savings (3+ months)
Lenders want consistent savings history in one account — not cash gifts.
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See a broker before a bank
A broker compares 30+ lenders and structures your application for the best outcome.
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You are ready to begin
4 lessons, approximately 10 minutes. Pass the quiz to unlock Module 2.
Key things you will walk away with
✓How the 3% APRA buffer works
✓Credit card limit impact
✓What HEM benchmarks are
✓Debt recycling basics
✓How to maximise capacity
✓Rental income shading (80%)