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What the Latest Federal Budget Could Mean for Your Borrowing Power in NSW
What the Latest Federal Budget Could Mean for Your Borrowing Power in NSW
If you’re thinking about buying a home, refinancing, or investing in property, the latest Federal Budget changes could have a bigger impact on your borrowing power than you realise.
For many Australians, borrowing power comes down to one simple question: how much does the bank think you can afford to repay? The Budget influences this through tax cuts, housing policies, and changes to property investment rules — all of which can affect how lenders assess your finances.
One of the biggest talking points is the proposed changes to negative gearing and investor tax benefits. For years, many property investors have relied on these tax breaks to help offset costs and improve cash flow. If those incentives become less generous, banks may no longer count the same level of financial benefit when assessing loan applications.
That could mean investors borrowing less than they would have a year ago — especially those with multiple properties or large existing debts. Some experts believe borrowing capacity for investors could fall by as much as 10–20% depending on their situation.
But it’s not all bad news.
The Budget also includes tax cuts and housing support measures aimed at helping everyday Australians manage rising living costs. For first-home buyers, this could provide a small boost to borrowing power by increasing take-home pay and improving overall affordability.
Here’s how the changes could affect everyday borrowers:
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Investors may find it harder to borrow
Reduced tax incentives could make banks more cautious when assessing investment property loans. -
First-home buyers could benefit
Government support schemes and lower deposit options may help some buyers enter the market sooner. -
Your income matters more than ever
Tax cuts may slightly improve borrowing capacity, but lenders are still closely watching spending habits and existing debts. -
Banks are becoming more conservative
With interest rates still relatively high, many lenders are tightening serviceability checks to reduce lending risk. -
Property markets may change
If fewer investors enter the market, price growth could slow in some NSW suburbs, creating opportunities for owner-occupiers.
At the end of the day, the Federal Budget won’t affect everyone the same way. But whether you’re a first-home buyer, upgrader, or investor, understanding how these changes flow through to lenders could make a big difference when it comes time to apply for a loan.
Contact Priority Home Loans to find out what your borrowing power is.
