Valentine’s Day may be all about love, but for many Australians, securing a home loan is an even bigger commitment. While couples often seem to have an advantage with dual incomes, new data reveals that singles may have more borrowing power than they realize. In fact, until a couple reaches a combined income of $200,000, they may actually be at a financial disadvantage compared to single buyers.
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So, should you team up for homeownership, or go it alone? Let’s break it down.
The Borrowing Power Breakdown: Singles vs. Couples
Contrary to popular belief, being single doesn’t necessarily mean you’re locked out of the housing market. Without factoring in a partner’s expenses, a single borrower can sometimes qualify for a larger loan than a couple. Below is a comparison of borrowing power based on income levels:
| Income | Kids | Single Borrower | Couple Borrower |
|---|---|---|---|
| $90,000 | 0 | $462,500 | $414,000 |
| $120,000 | 0 | $625,000 | $576,000 |
| $150,000 | 0 | $779,500 | $741,000 |
| $200,000 | 0 | $1,011,000 | $1,015,000 |
Surprisingly, it’s only at the $200,000 mark that couples begin to edge ahead in borrowing capacity. For those earning less than that, singles can often borrow more and have fewer financial constraints when applying for loans.
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How Children Impact Borrowing Capacity
Adding kids into the mix changes the equation. While singles still have an advantage at lower income levels, couples begin to see the benefits of shared financial responsibilities when children come into the picture. Here’s how borrowing power shifts when dependents are involved:
| Income | Kids | Single Borrower | Couple Borrower | Difference |
| $90,000 | 1 | $410,000 | $367,000 | $43,000 |
| $90,000 | 2 | $350,000 | $330,000 | $20,000 |
| $120,000 | 1 | $572,000 | $529,000 | $43,000 |
| $120,000 | 2 | $513,000 | $492,000 | $21,000 |
| $150,000 | 1 | $726,000 | $693,661 | $32,339 |
| $150,000 | 2 | $667,500 | $656,841 | $10,659 |
| $200,000 | 1 | $957,750 | $967,000 | -$9,250 |
| $200,000 | 2 | $898,500 | $930,500 | -$32,000 |
For single parents, borrowing power decreases significantly as additional costs come into play, but in many cases, they still have a slight financial edge over couples.
Why Banks Limit Borrowing Power
With the average full-time Australian worker earning $100,000 annually, the maximum borrowing capacity sits at around $530,000. However, despite solid incomes, many buyers find themselves unable to access the loans they need.
This is due to stringent lending criteria, including:
- A serviceability buffer that assumes interest rates will rise by 3%.
- Fixed living expense calculations, which don’t account for frugal spending habits.
- Loan repayment restrictions, which penalize buyers who want to pay more upfront.
As a result, even responsible borrowers are often blocked from maximizing their borrowing power.
The Secret to Boosting Your Borrowing Power
If you’re struggling to secure the loan you need, consider looking beyond the Big Four banks (CBA, NAB, Westpac, ANZ). Smaller lenders and non-bank institutions often provide better borrowing power, sometimes up to 20% more than traditional banks.
The Verdict: Should You Buy Alone or With a Partner?
While having two incomes can certainly help with homeownership, being single doesn’t mean you’re priced out of the market. In fact, at certain income levels, singles have a slight advantage when it comes to borrowing power.
So whether you’re celebrating Valentine’s Day with a partner or solo with a glass of wine and Netflix, remember—property ownership is still within reach, no matter your relationship status. And if you’re feeling bold, maybe consider flirting with a smaller lender for that extra boost in borrowing power!
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