How the Stage 3 Tax Cuts Could Boost Your Borrowing Power
Who doesn’t love a tax cut? From 1 July, millions of Australians will see extra savings in their tax bills—but that’s not the only good news. These Stage 3 tax cuts could also give your borrowing power a much-needed lift, helping you buy a home sooner or upgrade to a better property.
What Are the Stage 3 Tax Cuts?
The upcoming Stage 3 tax cuts are set to benefit about 13.6 million Australians, offering reductions based on income levels.
🔹 A person on $73,000 (average wage) will save $1,504 per year
🔹 Someone earning $100,000 will save $2,179 annually
These savings couldn’t come at a better time, helping households tackle rising living costs—but they also increase your take-home pay, which can positively impact your home loan eligibility.
How Do Tax Cuts Improve Borrowing Power?
Borrowing power, or borrowing capacity, refers to how much a lender will allow you to borrow. It’s influenced by several factors, including:
✔ Deposit size
✔ Household expenses
✔ After-tax income
Since higher take-home pay means greater repayment ability, lenders may increase loan offers, letting you borrow more or buy a better property.
How Much More Could You Borrow?
According to RateCity, the Stage 3 tax cuts could add:
✅ $21,000 in extra borrowing power for a single person earning $100,000
✅ $30,000 more borrowing capacity for couples earning $150,000 combined
This makes the tax cuts great news for first-home buyers and upgraders. Even if you’re not borrowing more, the boost to take-home pay can help make monthly mortgage repayments more manageable.
Other Ways to Increase Your Borrowing Power
You don’t have to wait for tax cuts to improve your borrowing capacity. Here are three additional strategies:
1. Trim Spending
Reducing non-essential expenses frees up more money for your deposit. Since banks assess household costs, trimming back on regular expenses may help increase loan eligibility.
2. Lower Your Credit Card Limit
Lenders assess your maximum credit card limit, not just your balance. Reducing your credit limit (or paying off and cancelling your card) can increase your borrowing power.
3. Increase Income
Taking on extra shifts, negotiating a pay raise, or starting a side hustle can boost your bank balance—and strengthen your loan application.
Find Out How Much You Can Borrow
While online borrowing power calculators provide rough estimates, they don’t account for lender-specific criteria or your unique financial situation.
Let CBM Mortgages Help You Navigate Your Home Loan Options
At CBM Mortgages, we specialise in helping buyers maximize their borrowing capacity.
📞 Want expert advice? Contact us today, and we’ll help you:
✔ Assess your borrowing power with accurate calculations
✔ Find competitive home loan options
✔ Understand tax benefits in relation to lending
🚀 Ready to buy your dream home? Start here: Read our blog on how to stop renting and start buying here
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
