The number a lender approves you for is a ceiling. It was never meant to be a target.
Most families we work with in the Inner West are surprised by how far apart two figures can sit: what the bank says they can borrow, and what actually lets them sleep at night.
Here's the gap most people miss.
When a lender assesses you, they already build in a cushion. APRA requires them to test your repayments at your rate plus three percentage points, so a loan near 6% is assessed closer to 9%. That buffer exists to protect against one thing: rates rising over the life of the loan.
What it doesn't account for is your life changing.
The assessment treats today's household as fixed. Two incomes, no childcare bill, school fees that haven't started. But families rarely stay still. A parent steps back to part-time. A second child arrives and daycare becomes a second mortgage. Fees begin the year the youngest starts school. None of that shows up in the number the bank hands you, yet all of it lands on the same budget.
So borrowing to the ceiling can commit you to a repayment sized for a household that won't exist in two years' time.
This is where borrowing to comfort, not capacity, changes everything. It might mean leaving room under the ceiling on purpose. It might mean stress-testing the loan against one income for a season, or against the year childcare peaks. The maths still works. It just works for the family you're becoming, not only the one applying today.
The right structure gives you options later. A ceiling tells you where the roof is. It doesn't tell you how much space you actually want to live in.
If your next move has changes on the horizon, this is worth modelling properly before you commit.
My Mortgage Concierge is licensed under ACL 392736 Sattout Accounting Services Pty Ltd. General information only — seek personal advice before acting.
