If you are thinking of building your own home or an investment property, you will need to be familiar with the ins and outs of construction loans.
Construction loans are just not as straightforward as simple home loans. There are additional decisions to be made about the structure of the loan, additional documentation is required and the funding is released in an entirely different way.
The FAST Business Excellence conference rewards and recognises the Top 200 highest achieving Residential Brokers from around the country. 
Millionaires become millionaires because they follow a blueprint…they reach the heights they do because they have a targeted wealth creation strategy and they stick to it.
They follow seven principles for wealth creation. They are not complicated or difficult to master…all they require is an understanding and commitment to make them work.
Here are four to get you started on the path to financial freedom:
Principle #1: Pay Yourself First
Most people are brought up with the money belief of “study hard, get good grades and then get a job”. Deeply caught in the cycle of working for money; year after year simply matching expenses to income.
No one teaches us to pay ourselves first and how to accumulate assets.
Go and get a job, and the moment you have a dollar to put some of it to work immediately.
Principle #2: Who Is Looking After Your Pig?
As adults we give our kids piggy banks and say “Keep putting money in this until it’s full”.
Unfortunately, most adults forget to do the same thing.
We need to keep a track of our piggy bank and never be casual about it. Review your plan, always having a target because a deposit for an investment property will only happen once you decide it should happen!
Once your piggy bank is full, you can then use that money to build your investment portfolio.
So, are you looking after your pig? Know this: Millionaires do.
Principle #3: Your Money Must Work For You
We are often hypnotised to work for money, rather than having our money work for us.
The rich know you must also make your money work for you. The average person works hard to earn money, while the rich and financially literate understand to reach financial freedom…your money must be put to work for YOU!
It is a simple discipline (often hard to start) that pays big dividends when you start on the investing path.
Principle #4: Play The Game
Capitalism is the machine that drives our society. It drives growth and prices, and the wealthy understand this important fact and they use it. A house today for $500 000. What do you think it will be worth in 10 years? Let’s be conservative and say $800 000.
What if in the same time the debt against it was significantly reduced because the compounding impact of tax and debt minimisation strategies?
When you buy something today you are buying it at a discount in relation to its future value. This means if you buy sensible investments, they are going to increase in value, if you have strategy you will drive the debt down which means you are buying the investment at a discount price today and leveraging against it tomorrow to do it again.
These principles and more form part of a way to think about your financial situation. At Go Mortgage we think this way too and can help you build your portfolio over time and at the same time show you how to increase your safety, lower your tax payable and increase your wealth.
Borrowing capacity is simply how much a lender is willing to let you borrow based on their policy, your income, expenses and existing debts.
Lenders also test whether you could still afford the loan if interest rates were higher. In 2026, that means a home loan rate of around 6% to 6.5% may be assessed closer to 9% to 9.5%. That is why many buyers are finding that borrowing capacity in Australia in 2026 is lower than they expected.
The good news is that there are a few practical, no-cost ways to increase borrowing capacity before you apply.
There are several ways to increase borrowing power, namely:
Knowing how to increase borrowing capacity starts with understanding how it is calculated. Lenders take your gross income from every source (salary, overtime, bonuses, rental, self-employment). They then subtract living expenses assessed against the Household Expenditure Measure (HEM) or your living expenses and existing debts, including credit cards at their full limits, personal loans, car loans, HECS, and BNPL. Each dependent increases your assessed costs and reduces your surplus.
Then comes APRA’s 3% serviceability buffer: if your actual rate is 6.25%, you are tested as though it were 9.25%, regardless of which bank you use. In short, net surplus income, after expenses and debts at that buffered rate, sets your maximum monthly repayment, and that sets your borrowing capacity.
Run your own numbers through our borrowing power calculator before you dive into the strategies below.
Unsecured debts (credit cards or personal loans) require repayment within a short period, which forces you to reduce your debts quickly. The result is high monthly bills.
When a lender performs their servicing calculations, these debts will weigh heavily against you because they limit the amount of available funds that could be used to make payments on the proposed mortgage.
One possible solution to this dilemma is to combine your unsecured debt with your mortgage so that it won’t be reflected as a financial commitment (automatically increasing your serviceability).
Be advised, however, that should you do this, you will pay more in interest than if you had simply paid off your debt.
Did you know that for every $1000 limit you have on a credit card, your serviceability is reduced by $30.00 per month? So, for example, if you have a credit card with a $10,000 limit, the bank will reduce your unallocated funds by $300 per month!
Even if you have a zero balance on your $10,000 limit credit card most banks will count that $10,000 as a liability.
You can immediately increase your serviceability by closing all of your credit card accounts except for one. If you cannot close them all at once, then work on paying off those with balances until you’re left with a single credit card that suits your needs.
Perhaps the best way to borrow more for a home loan is to ensure your financial records are complete, current, and easy for a lender to verify. Lenders can only assess income they can actually see on paper. If it isn’t documented, it doesn’t count.
For example, if your base salary is low, but your employer gives you huge bonuses, this fact needs to be shared with your lender. Your lender also has an option to obtain a Payment Summary from the ATO to calculate your income for their purposes.
This is where a mortgage broker can be worth their weight in gold.
Each bank and lender has their own criteria and guidelines; therefore, it’s important to choose the right loan for your needs.
Different loan features can reduce or increase your borrowing capacity. Items like lines of credit, P&I or Interest Only loans, and discounts will impact the amount you’re able to borrow.
Each lender has different rules for how they treat income. Some may disregard certain types, such as government benefits, while others accept them.
Remember that the more income your lender is willing to accept, the greater your serviceability.
Furthermore, lenders have varying servicing policies, so some are more generous than others when it comes to borrowing capacity. Some lenders do not fall under the supervision of APRA’s 3% buffer requirements, and con offer larger borrowing capacity for the same situation.
Also, note that if you have more than one home loan with the one lender, they are likely to ‘sensitise’ the interest across all those loans, which will reduce your borrowing capacity. If on the other hand, you spread them around, you may stretch this borrowing capacity, especially if you know which lenders to use first (the less servicing-friendly ones) and which to use for later.
This is one of my favourite strategies because it’s easy to implement and requires nothing more than your effort. Save at least three to six months for the deposit on your loan or if you’re using equity, build up as much as possible before getting your loan.
Finally, careful planning and determination to pay down your debts (both secured and unsecured) is a foolproof way to increase your serviceability with little to no risk to your financial freedom.
A few habits can undo everything above. The three to six months before you apply matter just as much as the strategies themselves.
Go Mortgage compares more than 60 lenders and their serviceability calculators, so a free assessment shows your real maximum across the market, not just one bank’s view. We’ve spent 21+ years helping Gold Coast buyers get the most from their borrowing power.
Call 1300 855 244 to book a free assessment.
The maximum loan amount a lender will approve, based on income, living expenses, existing debts and the serviceability buffer. It varies between lenders.
Common causes include high credit card limits (even with $0 owing), active BNPL accounts, HECS debt, dependents, or a lender whose calculator does not suit your income type.
Yes. Lenders assess the full limit, not the balance owing, so closing a $10,000 limit card can add roughly $40,000 to $50,000.
Yes, though less than it used to. Under the 2025-26 marginal system, an $80,000 salary generates roughly $1,950 a year in repayments, still a reduction but smaller than under the old flat-rate system.
Yes. Most lenders treat active BNPL accounts as liabilities, and some decline outright if one is open when you apply.
Often $50,000 to $100,000 or more for the same borrower, since each lender uses a different calculator, HEM benchmark and income policy.
A rule requiring banks to assess repayments at your actual rate plus 3 percentage points, so a 6.25% rate is tested at 9.25%, reducing how much you can borrow.
A broker cannot change your financial position, but finding the lender whose calculator suits you best can be the difference between approval and decline.
We are pleased to announce that Xavier Quenon from Go Mortgage has been nominated for ‘Broker of the Year’ in the prestigious Australian Mortgage Awards 2014.
Do you consider yourself a struggling, comfortable or rich Australian? What is rich? What is comfortable? What is struggling?
Australian household incomes are once again under a spotlight with the federal Budget looming and the government calling for everyone to do their bit to stave off what they claim is an economic “cyclone”.
The government is also looking at those on “high incomes” to contribute to the national coffers, including proposals for a deficit tax and compulsory private health insurance with access to Medicare cut off. Taxing people who can afford to pay a little extra is always a tad contentious, partly because people can’t agree on the definition of wealthy or rich.
Social researcher and director of Ipsos Mackay Dr Rebecca Huntley said it’s not hard to define high incomes if you’re a statistician or an economist, but it is tricky for everyday people because of how they feel about their personal circumstance.
She told news.com.au: “It’s rare to get people who are on $150,000 or $200,000 to call themselves rich. They’ll say they’re middle class or better off. Often the people on those incomes see multi-millionaires as the ones that are rich.”
The ABS says the average individual wage in Australia in November 2013 was $57,980 before tax. The average full-time wage is $74,724 before tax. Those figures may seem high but keep in mind it doesn’t include people whose only income source is government payments or pensions, which would drag the average down significantly.
The most recent ABS household income and income distribution report (for 2011 to 2012) classified households on high incomes as one with an average equivalised income of $94,328 after tax and the Medicare levy. It roughly equates to a single pre-tax income of $140,000 not taking into account any deductions, HELP repayments and tax benefits or offsets.
An equivalised income represents what a one-person household would need to earn to enjoy the same living conditions as those in a bigger household. But it’s not a matter of doubling, tripling or quadrupling that figure for a bigger household because there are cost savings from being in a multi-person household. For example, a family of four is likely be to paying one mortgage rather than four, so they won’t need $380,000 a year.
A middle income household is one with $41,236 after tax and levies while a low income household is defined as $24,700 a year. Household incomes in capital cities were 21 per cent higher.
And there is no doubt there is inequality in income distribution in Australia. The wealthiest 20 per cent of households account for 61 per cent of total household net worth while the bottom 20 per cent control only 1 per cent.
But while those statistics seem clear cut about who is rich and who isn’t, it doesn’t factor in various personal circumstances of each Australian family, their lifestyle expectations or where they live.
Earning $94,328 a year could see a single guy living incredibly well in Iron Knob, South Australia, population 199, where you can buy a three-bedroom house for $135,000. But a family of three in the inner or middle rings of Sydney or Melbourne would need a whole lot more money to have the same lifestyle.
Dr Huntley said: “We’ve had a long period of affluence and with that is the growing expectation of what the middle class looks like.
“People feel that the middle class should be able to afford private school, maintain reasonably new cars, have family holidays every year and have updated pieces of technology.”
Dr Huntley said definitions of who is rich and who is comfortable is highly contextual and emotional.
The political and social debate after the budget will likely centre around who will feel hard done by the federal government’s proposals.
Dr Huntley said: “I think [the budget] will provoke a discussion about what income level is right for the government to say you’re not entitled to government support.”
Of course, given the relative experiences and perspectives of each individual, what makes someone struggling, comfortable or rich is hugely different depending on who you talk to.
We asked news.com.au readers what their financial situations are and if they considered themselves struggling, comfortable or rich.
STRUGGLING
Warren Wingrove, regional Victoria
Warren Wingrove is a casual factory worker earning approximately $25,000 a year before tax, but would prefer to be a full-time or part-time position for the sake of job security.
He boards at home with his mother and pays her $150 a week and contributes to all the household bills.
Mr Wingrove said one of his biggest costs is the weekly fuel for his 14-year-old car for the 35-minute drive to work. He tries to save as much as possible as he’s unable to cover unexpected costs without budgeting for it in advance.
He said: “I try to put away as much as I can. If I need to go to the dentist, I have to save for a month. I can’t afford a lot of things.”
His one treat for himself every week is he will splurge and get a take-out meal.
Samantha Miels, Townsville
Samantha Miels and her husband live in Townsville with their three children (two in primary school, one in high school) and eight pets. Her husband earns $52,000 a year while she receives $17,000 in government support from family tax A and B and rent assistance. Ms Miels said her family now rents a nice place because of the National Rental Assistance Scheme.
Ms Miels said her family lives pay cheque to pay cheque but she budgets in advance and tries to pre-empt expenses. She said they don’t go out to dinner, to the movies or do anything that costs money but they have memberships to the local museum and aquarium because it gives them someplace to go out to.
For her to feel her family is comfortable, she believes an income of $80,000 would be necessary. Ms Miels said if family tax benefit B was cut or the Medicare GP co-payments came in, it would hurt their situation.
However, she seems upbeat. She said: “We don’t really live outside of our means but there isn’t a lot of wiggle room. We have everything we need and some of what we want. Our kids don’t get all the new toys but they’re happy.
“We can’t always do something we want to do but we don’t dwell on it. The electricity bill always scares us and fuel is rationed. I budget ruthlessly. We are comfortably struggling.”
COMFORTABLE
Becca W, Gold Coast
Becca is a single mother with a 17-year old daughter. She’s a debt collector with an income of $50,000 a year (including commission) and when her daughter finishes school this year, she will lose $6000 in government support. Becca’s outgoings include a mortgage, a car loan, a credit card, body corporate fees, utilities, school expenses, insurance, petrol, groceries and an extra $20 a week contribution to her superannuation.
Becca said: “I feel that I’m living comfortably. I have a roof over my head, my bills are paid and there is food in my fridge. However, I am lucky to have $20 or $50 to myself at the end of the week and I don’t really have room for anything out of the blue. But I’m better off than a lot of people.”
Becca said when there’s something special she wants, she’ll save for it. For her 40th birthday, she and a friend went on a P&O cruise to celebrate but she put money aside for it every week for three years.
Becca sees herself as a comfortable in part because she sees someone like her 79-year old father as struggling. Her father is on an old age pension of $23,000 and at his age, is still picking up casual jobs to make ends meet. Becca is concerned that if there are changes to the pension, she will have to take her father in which could mean a greater financial burden on herself.
James Merritt, Queensland
James Merritt, 26, works in the mining industry in Gladstone, Queensland. He earns $130,000 a year while his girlfriend is on $30,000. They bought a house three years ago in the area.
Like many people his age, Mr Merritt said he has all the money he needs but then nothing left over. He said: “The more I earn, the more I spend. I’ve got a nicer car now but no savings really. We’ve got money for things we need and want, but we do waste money. If we made an effort to save for something, we would be able to. I’m comfortable, but I wouldn’t say I’m rich.”
Mr Merritt said some his friends call him rich all the time because they’re on half his wage but he said he’s worked for it. “It’s not like I got this by chance or lucked into it. I earned this job. And a lot people in high paying jobs studied and worked hard, they deserve to be there.”
Mr Merritt said their plan now is to save for a few years and move back to Brisbane so he could finish the biomedical degree he started at university.
Kirsten, Perth
Kirsten and her husband have a combined income of over $200,000 (including work bonuses). They have a two-year old whose day care costs $75 a day.
Because they pay an extra $1000 a fortnight on their mortgage, they only have nine years left of it, even though they bought their house a mere four years ago.
Kirsten considers her family to be comfortable because they can afford to buy nice clothes and go on overseas holidays as well as look into starting an investment portfolio in a few years. However, she said they also in that position because they make smart financial choices including buying in bulk and not having a reverse cycle airconditioner.
She said: “When I was young, my parents divorced and my mother struggled financially. I saw an opportunity where I didn’t have to put my family in that position. My sisters took a different path. They had kids very young and struggled to hold onto a stable job. It’s often how you take it personally. I know not everyone has the same opportunities. I’m lucky but I also work bloody hard.”
Chris, Brisbane
Online marketer Chris, 27, and his wife are on a combined income of $250,000 a year with no dependants. They have a mortgage on a nice house and drive “nice enough” cars and go on holidays twice a year.
His perspective on his situation is echoed by many educated and ambitious young couples who have certain expectations of their lives and their futures.
He said: “Does anyone consider themselves rich? I really believe to be at the level where money is of no concern, you’d have to be millionaire several times over.
“When I first took my job out of university, I thought to myself, how much money do I really need? Once you hit that goal though, it is always what’s next? Your lifestyle adjusts, you get used to living a certain way, then you set goals to earn more. Nicer car, house, lifestyle, food, holidays and clothes.
“At each stage you just start getting more bills, mortgage, car insurance, home insurance, contents insurance, health insurance and life insurance. Not to mention that we’re starting to plan for life — kids, paying off the mortgage, investment properties, shares and superannuation.
“The combined income of $250,000 seems to be enough for us. I now feel like we are comfortable.”
RICH
Perhaps not surprisingly, no readers contacted us and confessed to their flowing wealth. Maybe it’s true what they say: the more money you have, the less likely you’ll talk about it.
However, some of those we spoke to had their own perceptions of what makes you rich in Australia. Warren Wingrove argued anyone who has more money than they need to survive is rich.
For others on the lower end of the income scale, that threshold is around the $200,000 mark.
Despite the common idea that large block sizes are more desirable in the suburbs, many people are now looking specifically for homes on smaller blocks. A Melbourne Buyer’s agent, Ian James, said increasing numbers of people were requesting homes with limited outdoor space.
This trend is also reflected in a survey by realestate VIEW, which found only 13.3 per cent of buyers saw an outdoor area as a necessity.
Historically, families have favoured large homes with extensive gardens in the front and back. “Back in the 50s, 60s and 70s, the Great Australian Dream was owning your own home on a quarter acre with a big back yard for the kids. That’s what everyone wanted,” he said. Nowadays, Mr James finds many people are no longer looking for “the quarter acre and the Hills Hoist. Many of my clients these days request homes with yards smaller than 10m by 10m.” Now, I’m asked to buy properties for people and the specifics are “I don’t want larger than 50, 80 or 100 square metres in the backyard. These families value low-maintenance options that can require minimum up-keep”, he said.
This interesting change in housing trend is a fact investors should think about when looking at their next purchase. A smaller yard means less maintenance to a tenant and more time to spend with their family or out and about enjoying other things in life. It also means that there should be less potential maintenance and upkeep issues for landlords.
However, investors should do their research as these trends may be more applicable in suburbs closer to public transport options and city centres.
If you’ve successfully purchased an investment property,organisedyour finance with Go Mortgage and secured a tenant, you might think the hardest work is done when it comes to setting yourself up to reach your investment goals. But like any investment, it’s important you keep a close eye on your property and avoid all too common financial mistakes.
To help calridy some fo the ptifalls that cxomes after the initial purchase and setup period here is what Carolyn Parrella, Insurance Executive Manager at Terri Scheer Insurance, had to say about the most common traps landlords fall into financially, and how you can avoid them.
“Before purchasing an investment property, carry out research to help determine an appropriate rental price,” Ms Parella said.
“Setting the rent too high may result in limited interest from prospective tenants, leaving you out of pocket if the property remains empty for an extended period of time.
“However, setting the rent too low may place you under financial pressure, limit your rental income and has the potential to attract unsuitable tenants.
“Find listings with similar features to your property, as this will give you a guide on the rental market in that area.
“If you appoint a property manager, they should be able to provide you with information on comparable properties and advise an appropriate rent for your own investment.”
“If a tenant falls behind in their rent, it can be a very long and costly process to resolve and could leave you considerably out of pocket,” Ms Parrella said.
“Diarise the dates that your tenant’s rental payments are due and check your bank account on those days.
“If your tenant doesn’t pay on the due date, monitor your bank account on a daily basis. If they fall into arrears a breach notice should be sent for non-payment of rent.
“The number of days in rental arrears before a termination notice can be sent, and the time between presenting the notice and requesting vacation varies around Australia, so it is important to be familiar with your local tenancy laws.
“Regularly monitoring arrears and issuing tenants with appropriate notices promptly may help resolve issues sooner and mitigate any financial loss.”
Ms Parrella said self-managing a rental property might create headaches for landlords, especially if they’re not able to commit the time or resources necessary (which they might not realise until after they’re in too deep).
“While it can be tempting to save a small percentage of rental income by self-managing your rental property, the benefits of appointing a property manager can far outweigh the costs,” she said.
“Property managers are able to conduct regular property inspections to identify maintenance issues, have systems in place to find and screen prospective tenants, and have access to databases that list tenants with a history of defaulting on rental payments, damaging property and eviction.
“If a dispute arises with a tenant, they are also familiar with the relevant legislation and can follow the correct procedures to help resolve the problem as quickly as possible.”
Furthermore the cost of the property manager is tax deductible and tenants tend to ‘play up’ less when faced with a professional agent. Also, beware as some insurance companies also refuse to offer landlord insurance to properties that are self managed.
“As a landlord, once you have been alerted to maintenance issues, it is your responsibility to act on these or authorise your property manager to do so as soon as possible,” Ms Parrella said
“If a maintenance issue arises and you are slow to fix it, you may be legally liable if your tenant injures themselves. It is also important to ensure that all maintenance is completed properly and to appropriate standards.”
“Landlord insurance cover can protect investors from many of the risks associated with owning a rental property, provide peace of mind and ease a landlord’s concerns about receiving regular rental payments if their tenant damages the property or absconds,” Ms Parrella said.
“Standard building and contents insurance policies usually don’t cover landlords for these risks.
“Landlord insurance can cover property owners for malicious damage by tenants, accidental damage, legal liability for occurrences on the property that cause death or bodily injury, and loss of rental income as a result of property damage or a tenant absconding.”
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