How Much Could You Borrow on a $150,000 Income?

You earn $150,000 a year. You have a decent deposit. You’ve found a house you like. 

Naturally, the next question is: how much will the bank actually lend you? 

The answer isn’t as simple as multiplying your salary by a magic number. If it were, mortgage advisers would have considerably more free time. 

Your income is important, but it’s only the starting point. Your deposit, household expenses, existing debt, number of dependants and even your credit card limits can all influence how much you may be able to borrow. 

So, let’s put some numbers around it. 

$150,000 Income: What Could You Potentially Borrow? 

For this example, let’s assume you have a 20% deposit, no existing debt, typical household expenses and are looking at a 30-year home loan. 

On a household income of $150,000, indicative borrowing could look something like this: 

• No dependants: approximately $750,000–$850,000 
• Two dependants: approximately $600,000–$700,000 

That’s potentially a $150,000+ difference in borrowing capacity on exactly the same household income. 

Why? 

Because the bank isn’t simply interested in how much money arrives in your account each month. It also wants to know how much of it is already spoken for. 

These figures are indicative only. Every lender has its own servicing criteria, and your actual borrowing capacity will depend on your individual circumstances. 

Same Salary. Very Different Household. 

Consider two households, both earning $150,000. 

Household A has no dependants, minimal debt and relatively modest living expenses. 

Household B has two children, childcare costs, school expenses, higher grocery bills and all the other little expenses that somehow appear when children enter the equation. 

Same income. Very different amount left over each month. 

That matters because a lender needs to be comfortable that you can service the mortgage after your normal household expenses have been accounted for. 

Having children doesn’t make you a less attractive borrower. It simply means there are more people sharing the same household income. 

And as most parents know, children have an impressive ability to turn $150 at the supermarket into three snacks and a yoghurt. 

That’s why borrowing capacity can change significantly once dependants and household expenses are included. 

The Debts You Forget About Still Count 

Your mortgage application doesn’t exist in isolation. 

Banks will also look at your existing financial commitments, including personal loans, vehicle finance, buy-now-pay-later facilities and credit cards, if any. 

Credit cards are particularly worth paying attention to. 

You might have a $15,000 limit and owe nothing on it, but a lender may still take the available limit into account when assessing your application. 

Why? Because technically, you could walk out tomorrow and spend the lot. 

So if you have large credit limits you never use, reducing them before applying for a mortgage may improve your position. 

Likewise, paying down consumer debt can potentially increase the amount of income available to service a home loan. 

A $150,000 salary looks considerably different to a bank when it arrives with a $30,000 car loan and several credit cards attached to it. 

The Bank Tests More Than Today’s Interest Rate 

Another important point: lenders don't necessarily assess your affordability using the attractive mortgage rate you saw advertised. 

They generally apply a higher test or servicing rate to see whether you could continue making repayments if interest rates increased. 

For example, while your actual mortgage rate might be considerably lower, a lender could assess your affordability at around 7%, depending on its current lending criteria. 

Think of it as the bank asking: 

“You can afford this mortgage today. But what happens if things get more expensive?” 

It’s a stress test, not necessarily the rate you’ll pay. 

And with a mortgage lasting potentially 30 years, it’s a reasonable question. Interest rates will almost certainly change many times before you make your final repayment. 

What About DTI? 

There’s another number worth understanding: your debt-to-income ratio, or DTI. 

DTI compares your total debt with your gross annual income. 

On a household income of $150,000, total debt of $900,000 represents a DTI of six. 

Borrowing above that level can fall within higher-DTI lending, which banks can only undertake within regulatory limits. That doesn't automatically mean you can't borrow more than $900,000, but it can make the lending assessment more restrictive. 

And importantly, DTI is only one part of the equation. 

You could theoretically sit within an acceptable DTI range and still fail a bank's servicing assessment because your household expenses or other commitments are too high. 

Conversely, a strong overall financial position may give an adviser different options to explore. 

This is why borrowing capacity is rarely determined by one number alone. 

A 20% Deposit Helps – But It Doesn't Answer Everything 

Let’s say you've saved a 20% deposit. 

Excellent. That's an important part of the equation. 

But a large deposit doesn't automatically mean the bank will lend you whatever is required to buy the property. 

There are effectively two separate questions: 

Do you have enough equity or deposit? 

And: 

Can you afford to service the loan? 

You generally need to satisfy both. 

Someone could have a $300,000 deposit but insufficient income to service the remaining mortgage. Another buyer could have very strong income but a smaller deposit. 

Different problem. Different lending conversation. 

How Could You Improve Your Borrowing Position? 

If you’re planning to buy in the next six to twelve months, it can be worth getting your finances in shape before you need the mortgage. 

That might mean paying down personal loans, reducing unnecessary credit card limits, reviewing regular expenses or building a larger deposit. 

It doesn’t mean spending six months living on baked beans so your bank statements look immaculate. 

It means understanding which financial commitments are genuinely affecting your borrowing capacity and dealing with them strategically. 

A mortgage adviser can run the numbers before you start seriously house hunting and identify where changes could make a meaningful difference. 

That can be considerably more useful than discovering the problem after you've found the house you want. 

What the Bank Will Lend You Isn't Necessarily What You Should Borrow 

This is perhaps the most important number in the entire article. 

If a bank says you can borrow $800,000, that doesn't mean your property budget automatically needs to include an $800,000 mortgage. 

Borrowing capacity is a ceiling, not a target. 

Think about what life looks like after settlement. 

• Can you comfortably make the repayments and still save? 
• Could you absorb an unexpected expense? 
• What happens if your mortgage rate increases at your next refix? 
• Can you still travel, eat out and do the things you enjoy? 

There’s not much point buying your dream home if you're then afraid to turn the heating on. 

The right mortgage should allow you to own the property and still have a life outside it. 

So, How Much Could $150,000 Get You? 

Using our indicative scenario of a 20% deposit, no existing debt and typical living expenses: 

$150,000 household income + no dependants: 

Approximately $750,000–$850,000 borrowing 

$150,000 household income + two dependants: 

Approximately $600,000–$700,000 borrowing 

These figures are indicative only and are not an offer of finance. Your actual borrowing capacity will depend on your circumstances and the lender’s assessment and criteria. 

The difference demonstrates something important: 

Your salary doesn't determine your borrowing capacity on its own. Your entire financial picture does. 

Before setting your property search at $700,000, $900,000 or $1 million, find out what the numbers actually look like for your household. 

Watch Mils Muliaina, former All Black and qualified financial adviser at The Mortgage Hub, break down what a $150,000 household income could potentially allow you to borrow — and why two people earning exactly the same amount can receive very different answers. 

Want to know what your income could realistically get you? Send The Mortgage Hub a message. We’ll run the numbers based on your income, deposit, expenses, dependants and existing commitments. Our advice is free.