The following formula does not take into consideration any rental income you might have so for property investors ignore this one.
I will let you know how that is calculated next time.
If you are looking to start trading shares visit this site for a handy little tool: Stock Trader ProIf you are interested in Property investment visit this site for a handy property tool: Property ProAdd up total Taxable income.
Multiply your joint taxable income by 35%
Divide this figure by the Variable interest rate plus 1%
The figure you get is the amount of money you can borrow based on your taxable income.
Remember most lenders don’t use this formula anymore however it gives you a nice ball park figure. Some lenders will lend you more and some lenders less.
So using a 60k figure for he household the amount they could borrow would be
$60,000 x 35% = $21,000
$21,000 / 7.4% = $280,000
A 20% deposite would be required to purchase in most cases these days so on $350,000 thats $70,000.
So that family could buy a $350,000 property if they had the $70k deposit.
At Professional Investment Services we have a wide range of lending calculators to help you determine your borrowing capacity.
