How much should I borrow

I am on a Total cost of employment (TCE) package of $250k. That includes payroll tax of $11,564, Superannuation contribution of $22,651 (9.5%), tax of $70,335, and a Medicare levy of $4,315. That leaves $145,450 per annum. Don’t talk about private health cover rebates and private school fees for two kids because that will spoil the dream.

OK – I want to commit 30% of my take home pay ($145,450), which is $43,635 per year in repayments.

Right, so if they stress test my loan at an interest rate of 6.5%, what size loan will I get.

Answer: $538,500

Well, with a 20% deposit that means I can afford a $675,000 property.

I thought I was rich?

I am glad they dropped interest rate by 0.25% because that will save $873 per year. Probably means I can afford a property for $680,000.