What Impact Do Children Have on Your Borrowing Capacity?

My mortgage Monday with George.

What Impact Do Children Have on Your Borrowing Capacity?

Happy Monday, everyone! Just went for a 3km run with the gang! How do you know you are getting old? When the gang starts outrunning their old man! I ran a pace of 6’12’’ /km, my oldest ran a 5’50’’ /km pace and young fellow ran a pace of 5’02’’ / km!

A frequently asked question I get is:

“How does having kids affect my borrowing capacity?”

The answer? It varies depending on lenders, state, income level, and the number of applicants, but one of the biggest factors is how many dependents you have.

Here’s a general guide on how children can impact borrowing power:

Single Applicant | Two Applicants

1 child: ↓ ~$50K 1 child: ↓ ~$15K
2 children: ↓ ~$110K 2 children: ↓ ~$50K
3 children: ↓ ~$170K 3 children: ↓ ~$100K
4 children: ↓ ~$230K 4 children: ↓ ~$150K

These Numbers are indicative only and will vary based on factors like:
Lender policy – Some lenders assess dependents more strictly than others.
State & cost of living – Expenses differ across regions.
Age of children – Older children may impact your borrowing capacity more due to education costs.
Income level – Higher incomes can offset the impact.

Key Takeaway:

The more dependents you have, the higher your living expenses, which reduces your borrowing capacity. But every situation is different! The good news? Some lenders assess this differently, and there are still great borrowing options available.

Want to know how this applies to you. Let’s crunch the numbers together!

Call: 0403 765 388
Email: george@gdpwealth.com.au

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