Ten-lender analysis tests how debts, dependants and HELP shift loan sizes
An unused $20,000 credit card limit can reduce a median earner's borrowing power by about $100,000, according to new research from Sydney brokerage AFMS Group. That is almost three times what a 0.75 percentage point rate cut would add.
AFMS Group's Borrowing Gap Report ran five borrower profiles through a panel of 10 lenders and changed one factor at a time. The profiles ranged from a single earner on $80,000 to a couple earning $240,000. The report then compared the results against income and house price data across Australia's 87 statistical regions.
Card limits and dependants weigh heaviest
For a single borrower on the $95,000 median income, the modelling put borrowing capacity at $500,000. Lenders assess the full approved limit on a credit card rather than the balance, so a $20,000 limit was treated as a monthly commitment of about $760 even when nothing was owing.
For the median earner, dependants had the largest effect. Two children reduced capacity by $120,000. A $650-a-month car loan cut it by $85,000, and a $30,000 HELP debt by $50,000. For single earners, the HELP cost grew with income, reaching $80,000 at $120,000.
"The biggest takeaway is that borrowing power is about much more than your salary and deposit," said Andrew Hadjidemetri, principal mortgage broker and founder at AFMS Group.
By comparison, a 0.25 percentage point rate cut would add about $11,000 to the median earner's capacity. The report modelled these figures on a 6.09% product rate as at August 2026, assessed at 9.09% with the standard serviceability buffer.
Those figures predate the Reserve Bank's (RBA) 29 September decision to lift the cash rate to 4.6%, its fourth increase this year, with all four major banks passing the rise on in full to variable home loan rates from 9 October. On the report's modelling, each 0.25 percentage point rise takes about $11,000 off a median earner's borrowing capacity.
Location matters more than income
Across the 87 regions, median house prices varied by a factor of 10.7, while median full-time earnings varied by only 1.61 times. A couple on two local median incomes could afford the median house in 67 regions. A single median earner could afford it in just 13.
Sydney showed the widest gap between what buyers can borrow and what that borrowing buys. North Sydney and Hornsby ranked first for borrowing power but 86th for buying power against local house prices.
What it means for client conversations
The findings point brokers towards reviewing a client's existing commitments early, before property searches begin. Hadjidemetri said buyers should understand their borrowing position before they start looking at properties.
"It is also important to remember that your maximum borrowing capacity is not necessarily what you should spend," he said.
