We’re excited to share that I Know The Broker Caloundra has officially opened its doors. Our new office makes it even easier for locals to get expert help with home loans, refinancing, investment property loans, and more.

Visit us at:

I Know The Broker Caloundra

81/30 Minchinton Street
Caloundra QLD 4551
07 5300 2809

Whether you're buying your first home, investing, or looking to refinance, we’re here to find the right loan for your needs. With access to a wide range of lenders and a commitment to clear, honest advice, we make the process simpler from start to finish.

Drop in or reach out today — we’re ready to help you move forward.

We’re excited to welcome you to our new I Know The Broker Mooloolaba office, located right in the heart of The Wharf precinct. This new space allows us to work more closely with local clients looking for expert mortgage guidance.

Visit us at:

I Know The Broker Mooloolaba

M3-58, The Wharf Mooloolaba
123 Parkyn Parade
Mooloolaba QLD 4557
07 5230 8205

Whether you're buying your first home, refinancing, or looking for tailored loan solutions, we’re here to help. Our brokers are locals who understand the Sunshine Coast market and will work with you to find the right lending option for your needs.

Drop in or contact us to book a no-obligation chat — we’d love to help you make smarter decisions around your mortgage.

If you're on a good income but still feeling locked out of the property market, your student debt might be the silent deal-breaker. HECS-HELP debt has always been a part of the home loan equation, but recent changes to how lenders assess it mean it's becoming an even bigger factor in determining how much you can borrow. Whether you’re speaking with a Gold Coast Mortgage Broker, a Sunshine Coast Mortgage Broker, or your local Brisbane Mortgage Broker, chances are they’ve seen firsthand how even a modest HECS balance can quietly chip away at your borrowing power.

But here’s the good news: with the right advice from a savvy Mortgage Broker for Sole Traders, even a minor tweak to your HECS debt can dramatically improve your borrowing capacity, without blowing your savings or putting your plans on hold. That’s precisely what happened when we worked with Adam, a client who came to us ready to buy but wasn’t quite sure how to close the deal.

Meet Adam: First Home Buyer with a Plan

Adam came to us as a first home buyer in his late twenties. He had a stable job, earning $80,000 a year, $20,000 in savings, and a guarantor ready to back his loan. On paper, that’s a solid position. However, he also had an $18,000 HECS-HELP debt, which, according to the bank’s updated servicing calculators, significantly reduced his borrowing capacity.

We ran the initial numbers. Based on his income and outstanding student loan, the bank estimated it would take Adam 5.7 years to repay his HECS debt. With that timeline factored in, his borrowing capacity came to $376,000, and even when we added his savings to the mix, it wasn’t enough for the properties he’d been eyeing. Adam was disappointed. He didn’t want to scale back his expectations, but he also didn’t want to wipe out his savings. That’s where strategic mortgage broking stepped in.

Why Does HECS Affect Your Borrowing Power?

Many borrowers are surprised to learn that HECS, despite being interest-free, still acts like any other debt in the eyes of lenders.

Here’s why: your HECS repayment is tied to your income, and those repayments reduce your net income when banks assess your ability to repay a loan. So even if you’ve never noticed the HECS deductions on your payslip, they’re quietly affecting how much a lender thinks you can afford to borrow.

Under newer lending policies and the updated HECS calculator, banks model how long it will take you to repay that debt based on your current income and adjust your borrowing power accordingly.

The longer the repayment term, the more cautious they are, and the less they will lend you.

The Strategy: Balance, Not Elimination

Instead of advising Adam to pay off his HECS entirely, we examined three different repayment scenarios that could strike the right balance between debt reduction and savings preservation.

Option 1: Reduce HECS slightly to $16,000

By using just $2,000 of his savings to make a lump sum repayment, Adam brought his total HECS debt down from $18,000 to $16,000. This slight reduction shortened his projected repayment time from 5.7 years to 5 years. That single adjustment gave him a borrowing capacity of $455,000, a massive leap from his original $376,000 while still leaving him with $18,000 in savings. This allowed Adam to maintain a buffer for upfront costs, such as conveyancing, stamp duty, and even some furniture.

Option 2: Reduce HECS to $3,200

For this option, Adam would pay down a large chunk of his HECS using $14,800 of his savings. The new HECS balance would be just $3,200, and the debt would be cleared in around 1 year. His borrowing capacity jumped to $409,000, and he’d still have $5,200 in savings. Not bad, but not the best either.

Option 3: Wipe HECS Completely

Adam could choose to clear the full $18,000 HECS debt, using almost all of his savings. His borrowing capacity increased to $430,000, but that left him with just $2,000 to cover all other upfront home buying expenses.

So What Did Adam Do?

In the end, the most effective strategy wasn’t the one that cleared the most debt; it was the one that created the best combination of improved borrowing power and retained cash.

Adam chose Option 1: reduce HECS slightly, borrow more, and keep enough savings to move forward with his purchase confidently. This gave him breathing room for legal fees, pest and building inspections, lender application costs, moving expenses, and even a few creature comforts when setting up his new home. And the best part? He didn’t need to wait years to save more or increase his income.

What This Means for You

If you’re carrying a HECS-HELP debt and looking to get into the property market, don’t assume you need to pay it off entirely before applying for a home loan.

The key lies in strategic debt management, adjusting just enough to shift the bank’s servicing calculations in your favour while keeping your financial safety net intact.

It’s not just about income. It’s about how that income is presented to lenders, how your debts are calculated into that picture, and whether your broker is proactive enough to explore alternative scenarios, rather than going with the default.

Why Strategic Mortgage Broking Matters

Most online calculators and even some mortgage advisors use a one-size-fits-all approach when assessing your borrowing power. They don’t run detailed modelling or explore different repayment strategies that could dramatically change your result.

At I Know The Broker, we dig deeper. We test multiple scenarios based on your full financial picture, including your HECS, savings, income structure, and any support you may have from a guarantor or family.

That’s how we help people like Adam get into homes they thought were out of reach, not by asking them to give up their savings or delay their dream, but by being smarter with the options in front of them.

Same Income. Different Outcome.

Adam’s story is proof that with the same income and the same savings, your outcome can look completely different if you're working with someone who knows how to tilt the odds in your favour. If you're in a similar situation and unsure whether your HECS debt is holding you back, please reach out. Let’s see how we can make your money work harder and bring your first home closer.

If you're self-employed and looking for a home loan, chances are you’ve already hit a few walls. Whether you’re speaking to a Gold Coast Mortgage Broker, a Brisbane Mortgage Broker, or a specialist Mortgage Broker for Sole Traders, it often feels like the minute you say “I run my own business,” the paperwork triples and the process slows to a crawl.

The reality is that too many banks still try to put self-employed clients in the same box as salaried workers, even though your income structure, cash flow, and financial story look completely different. But things are changing. With the right guidance from a savvy Sunshine Coast Mortgage Broker, there’s now a far more straightforward way to prove your income and get approved, without getting buried in documentation.

Why One-Year Financials Matter

Traditionally, lenders looked at your last two years of business tax returns and averaged them to work out how much you could borrow. That works fine if your income is stable, but let’s be real, for most business owners, especially early on, it’s not.

Maybe your first year was a slow start while you got off the ground. Perhaps you reinvested heavily or took time off during the COVID-19 pandemic. Maybe you’ve only recently hired staff and are now scaling fast. In any of these situations, averaging two years together can unfairly drag down your borrowing power, even if your latest figures clearly show growth.

That's where the one-year policy changes everything. By assessing your income based on just your most recent financial year, lenders can recognise your upward momentum, not penalise you for past slowdowns.

Real Talk: Rosie the Florist

Let’s make this real with a scenario we see all the time.

Rosie is a florist on the Sunshine Coast. After a tough first year in business, she’s turned a corner. She’s built relationships with wedding venues, set up a thriving online store, and is now earning $120,000 annually.

She’s found a home she loves for $750,000 and has a 20% deposit ready to go. However, when she spoke to her everyday bank, let’s call them Bank A, they informed her that she couldn’t get approved. Why? Because she had a $10,000 loss in her first year, and they still average that with her current profit, despite her growth.

What they didn’t ask about were the business expenses she’s no longer carrying. Or the new contracts she’s locked in. Or how the $2,000 a month in car finance tied to her ABN shouldn’t count against her personal loan serviceability.

Here’s what her options looked like:

• Bank A: Needed two years of financials and included her business debts in the assessment. Rosie could only borrow $70,000.

• Bank B: Accepted one year of financials, but still included her business debts. Rosie could borrow $451,000.

• Bank C: Accepted one year of financials and did not include her business debts. Rosie could borrow $674,000.

That’s a difference of over $600,000, all based on choosing the right lender with the right policy.

Why Your Everyday Bank Might Not Be Your Best Option

Banks have varying risk appetites, particularly when it comes to self-employed clients. Some are conservative and box-ticking. Others are policy-savvy and open to nuanced assessments, the kind that take your full situation into account.

The key is working with a mortgage broker who thoroughly understands self-employed lending. We’re not just comparing rates, we’re looking at:

• Which lenders accept one-year financials

• Who ignores company debt tied to ABN's

• How your tax structure (PAYG vs drawings vs dividends) affects policy

• Which banks have faster approvals or lower documentation requirements

What This Means For You

If your business is growing and you’ve been told “not yet” by your bank, don’t stop there. You might be closer to home ownership than you realise.

In fact, by using a smarter strategy and aligning with the right lender, many self-employed clients find they:

• Can buy sooner than expected

• Qualify for a higher amount

• Avoid unnecessary delays or paperwork

• Reduce their risk of being knocked back due toa rigid policy

Key Benefits of the New Self-Employed Lending Landscape

One Year of Financials May Be Enough: Many lenders now accept just your most recent financial year if it reflects stable or increasing income.

Company Debts Can Be Excluded: Debts under your business (e.g., ABN-registered car finance or credit cards) may not be counted against your personal capacity with the right lender.

More Choice = More Strategy: With access to over 50 lenders, we can find solutions that your current bank may not offer.

You're Not Alone: We work with sole traders, business owners, contractors, and freelancers across various industries — and help them navigate a clearer path to approval.

The Bottom Line

If your accountant has just finished your latest tax return, now is the perfect time to explore your borrowing power. You might not need to wait another 12 months. And you don’t have to rely on a bank that only sees one version of your story.

At I Know The Broker, we build tailored lending strategies for business owners like you, not cookie-cutter templates. If you’re self-employed and ready to take the next step, we’ll walk you through it, policy by policy, lender by lender, until we land the outcome that gets you home.

Let’s see what’s possible, even if your numbers are still catching up to your ambition.

One of the most common questions we get from clients is: "How does the bank calculate borrowing power?" The answer often surprises people, especially those who have built up significant equity in their property. Take Jasmine, for example. A recently separated mother of two, Jasmine, wanted to refinance and buy out her ex-partner so she could remain in the family home. She had accumulated over 50% equity in the property and assumed that would work in her favour, but her bank still declined her application. It left her confused and frustrated.

Let’s examine how lenders calculate borrowing power and why equity, while useful, is only one part of a much bigger picture.

1. Income Is the Foundation

When it comes to borrowing, income is everything. Lenders want to see income that is:

• Stable

• Ongoing

• Verifiable

This is the cornerstone of how borrowing power is assessed.

In Jasmine’s case:

• She was employed full-time as a nurse with consistent PAYG income 

• She also received regular child support payments, which some lenders include in servicing calculations if they meet specific criteria (such as a formal agreement and proof of regular receipt)

Even with a strong equity position, her capacity to borrow was determined by how much income she could demonstrate.

Pro tip: Even modest increases in income can make a significant difference. For example, boosting annual income from $110,000 to $120,000 could increase borrowing power by approximately $70,000, depending on lender policy and selected loan term.

2. Liabilities: Every Dollar Counts

Liabilities significantly reduce borrowing power. Lenders assess your capacity based on your available credit and obligations, even if you're not actively repaying certain debts.

These can include:

• Credit cards (even with a zero balance)

• HECS/HELP debts

• Car finance or novated leases

• Personal loans

• Buy Now Pay Later accounts

• Business loans (if they appear under your personal name or impact serviceability)

Pro tip: An unused $5,000 credit card limit can reduce your borrowing power by up to $21,000, depending on the lender. If you have multiple cards or unused facilities, closing them before applying could substantially improve your borrowing capacity.

3. Living Expenses: What You Spend Matters

Most borrowers underestimate how closely banks look at their living costs. Lenders either use actual declared expenses or apply a benchmark (based on household size and region), whichever is higher.

What lenders factor in:

• Private school tuition

• Childcare costs

• Health insurance

• Ongoing subscriptions and memberships

• Additional super contributions

• Utilities, transport, groceries

Jasmine paid $1,000/month in private school fees, significantly impacting her borrowing power by around $120,000, even though her income remained unchanged.

Pro tip:Living expenses reduce the income available for loan repayments. If you're preparing to borrow, consider how your essential vs. non-essential spending may affect your application and plan accordingly.

4. Equity: Helpful, But Not Everything

Many clients believe that having more equity automatically increases their borrowing limit. But here’s the reality: equity helps reduce lender risk but doesn’t contribute directly to your loan serviceability. In Jasmine’s case, her 50% equity was beneficial but not enough to secure her needed loan. Compared to someone with only a 10% deposit, her equity position added around $15,000 in extra borrowing power. Helpful, but not transformational.

Pro tip: Equity can help you:

• Avoid Lenders Mortgage Insurance (LMI)

• Access more favourable interest rates

• Be seen as a lower-risk borrower

However, it doesn’t replace income or allow you to stretch beyond what you can afford to repay.

5. Loan Type: Fixed, Variable, Offset—It Matters

Not all loan products are assessed equally. The structure of the loan itself affects how your borrowing power is calculated.

In Jasmine’s scenario:

• One lender offered her a maximum of $374,000

• Another lender offered $618,000

That difference is over $240,000 with the same income, equity, and property. The only differences were the lender and the product used. Different

Different loan types have different servicing buffers. Some fixed-rate products, for example, are assessed more conservatively than others.

Pro tip: The right product doesn’t just influence your rate or repayments, it can also significantly affect your borrowing limit. A knowledgeable broker will help match your short-term needs and long-term goals to the right loan structure.

6. Loan Term: Time = Affordability

The loan term, or how long it takes to repay the loan, also plays a big role. Longer terms mean lower monthly repayments and higher borrowing power.

Jasmine was willing to take on a 30-year term, which gave her greater flexibility. Some lenders offer 40-year terms, which can increase borrowing power further, but at a higher overall cost in interest.

Pro tip: Here’s a breakdown of total interest paid on a $500,000 loan at 6% interest:

• 20 years: $360,000

• 30 years: $580,000

• 40 years: $820,000

Borrowing more may help you now, but balancing affordability with the long-term cost is important.

Why Borrowing Power Varies So Much Between Banks

Each lender has its own methodology for risk assessment and serviceability. This is why clients often get dramatically different outcomes depending on who they approach.

Some lenders:

• Use higher servicing buffers on existing debts

• Count child support or bonus income differently

• Exclude secondary income (like overtime or side income)

• Allow exceptions based on the length of employment or the refinance purpose

This is where using a broker becomes so valuable. It’s not just about choosing a lender; it’s about choosing the right lender for your unique scenario and structuring the application to meet their internal guidelines.

Key Takeaways: How to Boost Your Borrowing Power

• Prioritise stable income, especially PAYG or long-term contracts

• Minimise liabilities wherever possible, including unused credit cards

• Review and reduce unnecessary living expenses

• Understand that equity helps, but doesn’t drive your loan size

• Select a loan product that aligns with your borrowing strategy

• Work with a broker who knows how to navigate policy and lender appetite

Need Help Understanding Your Borrowing Power?

If your bank has given you a lower loan amount than expected or rejected your application altogether, it doesn’t mean that’s the end of the story. We’ve helped clients increase their borrowing capacity by tens (and sometimes hundreds) of thousands simply by switching lenders, refining expenses, or choosing a better loan structure.

Book a quick, no-pressure chat with our team. We’ll help you understand what’s possible and how to structure your application for the best result.