Nov 30, 2025 | Borrowing Power, Debt Consolidation, Investment, Purchasing, Tax Planning
November 2025 has delivered two critical pieces of news for Australian Small and Medium Enterprise (SME) owners, offering clarity on tax planning and improved banking rights. Here’s what you need to know.
1. The $20k Instant Asset Write-Off: Finally Confirmed
After months of uncertainty, the $20,000 Instant Asset Write-Off has passed the Senate and is now confirmed for the 2025-26 financial year. The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 sailed through Parliament in November, with Chartered Accountants Australia and New Zealand welcoming the news whilst renewing calls for the measure to be made permanent.
What This Means for Your Business
This confirmation provides the certainty business owners have been waiting for. You can now confidently purchase assets—such as tools, IT equipment, or machinery—costing less than $20,000 and claim the immediate tax deduction in the 2025-26 financial year.
Key details:
- Per-asset basis: The $20,000 threshold applies to each individual asset, allowing for multiple purchases throughout the year
- Eligibility: Small businesses with aggregated annual turnover under $10 million using simplified depreciation rules
- Timing: Assets must be purchased and installed ready for use by 30 June 2026
- Both new and second-hand assets qualify, including machinery, tools, office equipment, technology, and vehicles
Without this extension, the threshold would have reverted to just $1,000 from 1 July 2025—a dramatic reduction that would have significantly impacted small business investment decisions.
2. New Protections for Larger Business Debts
A major win for SMEs came into effect on 28 February 2025 with the expansion of the Banking Code of Practice. The updated Code, approved by ASIC and developed by the Australian Banking Association, significantly expands protections for small business customers.
Expanded Small Business Definition
The definition of a ‘small business’ has been widened to include businesses with up to $5 million in total debt (previously $3 million). This change brings an estimated 10,000 additional Australian businesses under the Code’s protection.
What this means for your business:
- If your business has aggregate borrowings between $3m and $5m, you now access stronger protections regarding loan conditions, financial difficulty assistance, and notice periods for enforcement
- Banks must now provide clearer information about their products and services
- Enhanced protections during periods of financial difficulty
Stronger Guarantor Protections
The new Code also enforces stricter rules when banks take personal guarantees—often from family members supporting a business loan. Key changes include:
- Mandatory meetings: Banks must now take reasonable steps to ensure a meeting is held with prospective guarantors (separately from borrowers) to discuss the implications before signing
- Risk disclosure: Banks must ensure guarantors fully understand the financial risks involved
- Alternative exploration: Banks must explore alternative paths of recovery before enforcing guarantees and taking steps to sell a guarantor’s primary residence
- Limited guarantees: Guarantees are limited to specified amounts and secured property values
As the Australian Small Business and Family Enterprise Ombudsman noted, these “vital small business protections” represent a significant uplift in banking standards.
3. Strategic Implications: Why Q4 2025 Is the Time to Act
With the RBA holding the cash rate steady at 3.60% at its November 2025 meeting, the cost of capital remains stable. The Reserve Bank noted that inflation had picked up to 3.0% (trimmed mean) but attributed some of this to temporary factors, maintaining a cautious approach to future rate movements.
This creates a unique window of opportunity:
- Tax certainty: The write-off extension is now law—no more waiting
- Stable rates: Finance costs are predictable for planning purposes
- Better protections: Enhanced borrower rights under the new Banking Code
The Asset Finance Advantage
Using Asset Finance to fund equipment purchases allows you to preserve cash flow while still triggering the immediate tax deduction. This approach offers the best of both worlds: you get the full tax benefit in the year of purchase, while spreading the actual payment over time.
Whether it’s upgrading your fleet, investing in new technology, or replacing aging equipment, now is the ideal time to review your asset register and financing structures.
Next Steps: Talk to Sanford Finance
Our team can help you navigate these changes and structure your equipment purchases to maximise tax benefits while protecting your cash flow. Whether you’re looking to take advantage of the instant asset write-off before 30 June 2026, or want to understand how the expanded Banking Code protections might benefit your business, we’re here to help.
Contact us today to discuss your business finance needs and create a strategy that works for your situation.
Disclaimer: This article provides general information only and does not constitute financial, tax, or legal advice. The information is current as at November 2025. We recommend seeking professional advice tailored to your specific circumstances before making any financial decisions.
Nov 30, 2025 | Investment Property, Purchasing, Real Estate, Refinance
APRA’s New DTI Lending Caps Start 1 February 2026: What Property Investors Need to Know
For property investors, the regulatory landscape is about to tighten. On 27 November 2025, the Australian Prudential Regulation Authority (APRA) confirmed what many in the industry had been anticipating: strict limits on debt-to-income (DTI) ratios will come into force from 1 February 2026.
This isn’t a drill. If you have an existing portfolio or are planning to expand, you have a narrow window to act before these new rules fundamentally change your borrowing options.
Why APRA Is Acting Now
In its System Risk Outlook released in November 2025, APRA highlighted high household debt as a key vulnerability in Australia’s financial system. The gross debt of Australian households has remained at approximately 1.8 times their income for almost a decade—high by both historical and international standards.
More critically, APRA has observed a pick-up in riskier forms of lending as interest rates have fallen. Housing credit growth has climbed above its longer-term average, property prices have risen further, and investor lending hit record levels in the September 2025 quarter—surging 17.6% in just three months to nearly $40 billion.
“At this point, the signs of a build-up in risks are chiefly concentrated in high DTI lending, especially to investors.” — APRA Chair John Lonsdale
The New ‘6 Times’ Rule: What’s Changing
From 1 February 2026, banks and other authorised deposit-taking institutions (ADIs) will be limited in how many high-DTI loans they can write. Here’s what you need to understand:
The Cap
- Banks can issue no more than 20% of new mortgage lending at a DTI ratio of 6 times or higher
- The limit applies separately to owner-occupier and investor lending portfolios
- Compliance will be measured on a quarterly basis
What’s Exempt
- Bridging loans for owner-occupiers
- Loans for the purchase or construction of new dwellings (to avoid constraining housing supply)
Why Investors Are Most Affected
APRA has made clear that investors will bear the brunt of these changes. Currently, around 10% of new investor loans have DTI ratios at or above six, compared to just 4% for owner-occupiers. As banks approach the 20% cap, they’ll become increasingly selective about which high-DTI investor loans they approve.
Current State vs. Future State
Where We Are Now
- High-DTI lending remains well below the 20% cap (currently around 5.5% of all new lending)
- Only a small number of ADIs are currently near the limit for investor lending
- The existing 3% serviceability buffer remains the primary constraint on borrowing
- Non-bank lenders currently operate under different rules (regulated by ASIC, not APRA)
What Changes After 1 February 2026
- Banks will have a hard cap on high-DTI lending—a formal guardrail that didn’t exist before
- As interest rates fall further, high-DTI lending typically increases—the cap will prevent this from spiralling
- Banks approaching the limit may tighten criteria, increase pricing, or simply decline marginal applications
- APRA has signalled it may extend these rules to non-bank lenders if they contribute to financial stability risks
Important: In 2021, almost one in four new mortgages (over 24%) had a DTI ratio of six times or more. APRA is acting now to prevent a return to those levels as rates continue to fall.
Why the Next Two Months Matter
We are currently in a transition window. The rules don’t take effect until 1 February, but lenders are already beginning to tighten credit policies in anticipation. Here’s why acting now is critical:
- Pre-approvals obtained now may be assessed under current, more flexible criteria
- Banks won’t wait until 1 February to adjust their risk appetite—many are already reviewing high-DTI applications more carefully
- Refinancing and equity release become harder once your total debt pushes you above 6x income under the new measurement framework
- Settlement timelines mean any application lodged in January may not settle until after the new rules apply
Strategic Actions for Portfolio Investors
If you have a portfolio of two or more properties, your DTI is likely approaching the new limit. Here’s what to consider:
1. Release Equity Now
If you need cash for renovations, a future deposit, or simply to create a buffer, refinance to release that equity before February. Once the rules change, you may find yourself “equity rich but serviceability poor”—unable to access the wealth locked in your properties because your total debt exceeds the new thresholds.
2. Consolidate High-Interest Debt
High-interest personal loans, car finance, and credit cards hurt your DTI ratio disproportionately. Consolidating them into your mortgage now can lower your overall debt obligations on paper, potentially keeping you under the 6x cap and preserving your borrowing capacity for future investments.
3. Review Your Portfolio Structure
Now is the time to assess whether your current loan structures are optimal. Consider whether interest-only loans, offset accounts, or different lender arrangements could improve your position before the regulatory environment tightens.
4. Lock in Any Planned Purchases
If you were planning to add to your portfolio in early 2026, bringing that timeline forward could be the difference between approval and decline. Remember that loans for new dwellings are exempt from the cap, so consider whether off-the-plan or new-build purchases might offer strategic advantages.
What APRA Is Signalling for the Future
This isn’t necessarily the end of APRA’s intervention. The regulator has explicitly stated it “will consider” further investor-specific measures if macro-financial risks continue to build. Previous interventions have included:
- 2014-2017: 10% annual growth cap on investor loans
- 2017-2018: 30% ceiling on interest-only lending
- 2021: Increase in serviceability buffer from 2.5% to 3%
The message is clear: APRA is watching investor activity closely, and the current DTI cap may be just the first step if risks continue to accumulate.
The Bottom Line
The introduction of DTI limits represents a fundamental shift in how highly leveraged investors will be able to operate. While APRA has positioned this as a “guardrail” rather than a “handbrake,” the practical effect for investors with significant portfolios could be substantial.
The window between now and 1 February 2026 offers a unique opportunity to:
- Assess your current DTI position across all lenders
- Release equity or consolidate debt while criteria remain more flexible
- Complete any planned portfolio expansion before the new rules bite
- Structure your finances to remain under the 6x threshold going forward
Don’t Wait Until It’s Too Late
At Sanford Finance, we’re already helping investors navigate these changes. Our team can assess your current DTI position, identify opportunities to optimise your portfolio structure, and help you take action before the February deadline.
Contact us today for a portfolio review and find out exactly where you stand before these new rules take effect.
Disclaimer: This article provides general information only and does not constitute financial advice. Your personal circumstances may vary. The information in this article was current as at November 2025. Please contact Sanford Finance or speak with a qualified financial adviser before making any decisions about your investment strategy or borrowing arrangements.
Nov 30, 2025 | First Home Buyers, Property Market, Real Estate
November 2025: How the HECS Cut and New Property Caps Are Rewriting the Rules for 2026
For aspiring homeowners in Sydney, November 2025 has delivered a rare alignment of policy changes that could significantly boost your purchasing power. While the Reserve Bank held the cash rate steady at 3.60% this month, two distinct government initiatives have quietly created what we’re calling the ‘double bonus’ for first home buyers.
Bonus #1: The 20% HECS Debt Reduction
As of November 2025, the Australian Taxation Office has commenced processing the Federal Government’s landmark 20% reduction in student loan debt. The Universities Accord (Cutting Student Debt by 20 Per Cent) Act became law on 2 August 2025, and the ATO is now applying these reductions to over 3 million Australians with outstanding HELP debts.
This isn’t just a reduction in what you owe—it’s a direct boost to what you can borrow. Here’s why this matters for first home buyers:
- The 20% reduction applies to your loan balance as at 1 June 2025, before indexation is calculated
- The minimum repayment threshold has increased to $67,000 (up from $54,435), meaning lower compulsory repayments
- Repayments are now calculated on a marginal basis—only on income above $67,000, not total income
- Some lenders are now excluding HECS debt from serviceability assessments entirely if the balance will be repaid within 12 months
What This Means for Your Borrowing Power
Lenders typically reduce borrowing capacity by approximately 10 times your annual HECS repayment. With lower compulsory repayments under the new marginal system, combined with the 20% debt reduction, many first home buyers will see a material improvement in what they can borrow.
For example, someone with a $70,000 HECS debt earning $125,000 would see their balance drop to approximately $56,000 after the reduction—an immediate saving of $14,000. More importantly, their ongoing repayment obligation decreases, which directly impacts serviceability calculations.
Combined with the Stage 3 tax cuts that have been flowing through since July 2024, high-income earners could see their borrowing capacity increase by $25,000 to $75,000 or more, depending on their circumstances.
Bonus #2: The Expanded Home Guarantee Scheme
From 1 October 2025, the Federal Government’s Home Guarantee Scheme received its most significant expansion ever. The changes are transformational for first home buyers, particularly in high-value markets like Sydney.
Key Changes
- Property price cap for NSW capital cities and regional centres: $1.5 million (up from $900,000)
- Income caps: Completely removed (previously $125,000 for singles, $200,000 for couples)
- Available places: Unlimited (no more missing out due to limited allocations)
- Minimum deposit: Just 5%, with the government guaranteeing up to 15% of the property value
The Immediate Impact
Government data released in November shows the scheme’s immediate impact: 5,778 guarantees were issued in October 2025 alone—a 48% increase compared to October 2024. This represents approximately one in every ten homes sold nationally during the month.
For Sydney buyers, the practical benefit is substantial. Someone purchasing a $1.2 million property could save approximately $40,000 to $70,000 in Lenders Mortgage Insurance by using the scheme—money that stays in your pocket rather than protecting the bank.
The Market Context: Why Timing Matters
CoreLogic data shows national home values rose 1.1% in October 2025—the fastest monthly gain since June 2023. The annual growth rate has now reached 6.1%, with momentum building since the first RBA rate cut in February.
Significantly, properties in the lower and middle price segments are showing the strongest growth (1.2% to 1.4% in October), reflecting the impact of the expanded Home Guarantee Scheme and ongoing affordability pressures pushing buyers toward these market segments.
Sydney’s median dwelling price now sits at approximately $1.26 million, with houses at $1.58 million and units at $886,000. While prices continue to rise, the combination of the HECS reduction and expanded scheme creates a window of opportunity that may not last.
What This Means for You
The ‘wait and see’ strategy is becoming increasingly risky. Here’s why:
- Increased competition: With income caps removed and unlimited places available, more buyers are entering the $1.0m–$1.5m bracket than ever before
- Price momentum: Property values are rising faster than most buyers can save, with national values up over 6% annually
- LMI savings: A 5% deposit scheme on a $1.2m property saves approximately $40,000–$70,000 in insurance costs alone
- Borrowing power boost: The HECS reduction combined with tax cuts could increase your capacity by tens of thousands of dollars
Your Next Steps
If you’re a first home buyer with HECS debt, now is the time to reassess your position:
- Check your updated HECS balance via myGov after linking to ATO Online Services—most reductions will be processed by late 2025
- Get pre-approved through a participating lender under the Home Guarantee Scheme—there are over 30 lenders available
- Speak with a mortgage broker who understands how different lenders treat HECS debt—some are more generous than others
- Model your full 30-year picture to understand total costs, not just monthly repayments
The combination of lower student debt and the ability to buy with a 5% deposit means your entry point is likely right now, before 2026 brings further price growth and increased competition.
Ready to Take the Next Step?
At Sanford Finance, we specialise in helping first home buyers navigate these complex policy changes. Our team can assess your updated borrowing capacity, identify the best lenders for your situation, and guide you through the Home Guarantee Scheme application process.
Contact us today for a free assessment and find out how these changes could help you get into your first home sooner than you thought possible.
Disclaimer: This article provides general information only and does not constitute financial advice. Your personal circumstances may vary. The information in this article was current as at November 2025. Please contact Sanford Finance or speak with a qualified financial adviser before making any decisions about your home loan.
Oct 13, 2025 | Investment Property, Property Market, Real Estate, Refinance
With Australian property prices projected to rise significantly over the next 12 months, existing homeowners have a unique opportunity to leverage their equity and enter the investment property market before the window closes.
The Perfect Storm: Why Now is the Time to Act
If you already own a home in Australia, you’re likely sitting on a substantial asset that has appreciated significantly over the years. But here’s what many homeowners don’t realize: that equity in your home could be the key to building long-term wealth through property investment—and the opportunity to act is narrowing rapidly.
The expanded 5% Deposit Scheme that came into effect on October 1st is already driving unprecedented demand in the property market. Independent analysts forecast property prices could rise by 3.5% to 9.9% nationally in 2026 alone, with first home buyer target areas seeing even higher growth. This surge in demand creates a compelling opportunity for existing homeowners to leverage their equity and secure investment properties before prices rise further.
At Sanford Finance, we’re already seeing savvy homeowners making this move. Here’s everything you need to know about using your home equity to build an investment property portfolio.
Understanding Home Equity: Your Hidden Asset
Before we explore how to use equity for investment, let’s clarify what it actually is.
Equity is simply the difference between your property’s current market value and what you still owe on your mortgage.
For example, if your home is currently valued at $750,000 and you have $400,000 remaining on your mortgage, you have $350,000 in equity.
But not all of that equity is accessible. This is where useable equity comes in.
Calculating Your Useable Equity
Banks are generally comfortable lending up to 80% of your property’s value. Your useable equity is calculated as:
Useable Equity = (Property Value × 80%) – Current Loan Balance
•Property value: $750,000
•80% of property value: $600,000
•Minus current loan: $400,000
•Useable equity: $200,000
This $200,000 is what you can potentially access to use as a deposit on an investment property.
The “Rule of Four”: How Much Can You Invest?
A useful guideline in property investment is the Rule of Four, which suggests your maximum investment property purchase price should be approximately four times your useable equity.
In our example, with $200,000 in useable equity, you could potentially purchase an investment property worth up to $800,000.
Here’s how the numbers work:
•Investment property price: $800,000
•Required 20% deposit: $160,000 (from your useable equity)
•Additional costs (~5%): $40,000 (also from useable equity)
•Total equity required: $200,000
This approach allows you to avoid Lenders Mortgage Insurance (LMI) on the investment property while keeping your existing home loan intact.
Why Property Prices Are About to Surge
The timing for this strategy has never been more critical. Here’s why property prices are projected to rise significantly over the next 12 months:
The 5% Deposit Scheme Effect
The expanded scheme has removed income caps and dramatically increased price caps across Australia. This has unleashed a wave of first home buyers into the market, creating intense competition for properties under the scheme’s price caps.
Real-world evidence is already emerging:
•Western Sydney properties jumped from $750,000 to $900,000 virtually overnight
•Mortgage brokers report “unprecedented demand” with buyers “literally queuing up”
•Properties in high-demand suburbs are receiving 100-150 enquiries per listing
Independent Forecasts vs. Government Projections
While Treasury modestly projects a 0.5% price increase over six years, independent economic analysis firm Lateral Economics forecasts:
•3.5% to 6.6% national price growth in 2026 alone
•5.3% to 9.9% in areas targeted by first home buyers
•Continued strong growth for several years afterward
Capital City Growth Projections
|
City
|
12-Month Projection
|
Current Monthly Growth
|
|
Perth
|
9-14%
|
1.6% (Sept)
|
|
Brisbane
|
8-12%
|
1.2% (Sept)
|
|
Adelaide
|
7-11%
|
1.0% (Sept)
|
|
Sydney
|
7-10%
|
0.8% (Sept)
|
|
Melbourne
|
5-8%
|
0.5% (Sept)
|
Source: Cotality September 2025 data, Lateral Economics projections
The Wealth-Building Advantage for Existing Homeowners
While first home buyers scramble to enter the market with minimal deposits, existing homeowners have a significant advantage: you can leverage your equity to secure investment properties in high-growth areas before prices surge.
Here’s why this strategy is so powerful:
1. Dual Property Appreciation
When you own two properties, you benefit from capital growth on both. If property prices rise by 8% over the next year:
•Your $750,000 home increases to $810,000 (+$60,000)
•Your $800,000 investment property increases to $864,000 (+$64,000)
•Total equity gain: $124,000
This is wealth creation through leverage—your initial $200,000 equity investment has generated returns on $1.55 million worth of property.
2. Rental Income Support
Unlike first home buyers who must service their entire mortgage from their income, your investment property generates rental income that helps cover the loan repayments.
For an $800,000 property in a high-demand area:
•Expected rental income: $650-750 per week
•Annual rental income: $33,800-$39,000
•Helps offset loan repayments and expenses
3. Tax Benefits Through Negative Gearing
If your investment property expenses exceed the rental income (which is common in the early years), you can offset this loss against your taxable income.
•Annual rental income: $36,000
•Annual expenses (interest, rates, insurance, etc.): $45,000
•If you’re in the 37% tax bracket, this could reduce your tax by approximately $3,330
This means the actual cost of holding the property is lower than it appears, while you benefit from capital growth.
4. Building Long-Term Wealth
Property investment is a long-term wealth-building strategy. Over a 10-20 year period, you benefit from:
•Capital growth on both properties
•Loan principal reduction through rental income
•Tax benefits that improve cash flow
•Potential to leverage further as equity builds
How to Access Your Equity: Three Main Options
1. Refinancing Your Home Loan
This involves replacing your existing home loan with a new, larger loan that includes the equity you want to access.
•Potentially access better interest rates
•Consolidate to one lender
•May incur break costs if on a fixed rate
•Application and valuation fees
2. Top-Up Your Existing Loan
This increases your current loan amount without changing your existing loan terms.
•Simpler process than refinancing
•Maintain existing loan features
•Limited to your current lender
•May not get the best available rate
3. Home Equity Loan or Line of Credit
A separate loan secured against your property’s equity, often with flexible access.
•Flexible access to funds
•Only pay interest on what you use
•Keep existing home loan separate
•Typically higher interest rates
•Requires discipline to manage effectively
Strategic Timing: The Early Mover Advantage
The data clearly shows that those who act quickly will benefit most from the current market dynamics. Here’s why:
Price Inflation is Already Happening
Sydney mortgage broker James Watson told The Australian Financial Review that the scheme is “a sugar hit that will benefit the early movers but will disadvantage future buyers.”
He cited clients whose budgets of $1.15 million ended up at $1.3 million due to increased competition—and this is just the beginning.
The Compounding Effect
Every month you wait, property prices continue to rise. Consider this scenario:
•Investment property: $800,000
•Required deposit (20%): $160,000
•Your equity covers this comfortably
Waiting 6 Months (assuming 4% growth):
•Same property now: $832,000
•Required deposit (20%): $166,400
•Additional equity needed: $6,400
•Plus you’ve missed 6 months of rental income and capital growth
Waiting 12 Months (assuming 8% growth):
•Same property now: $864,000
•Required deposit (20%): $172,800
•Additional equity needed: $12,800
•Plus you’ve missed 12 months of rental income and capital growth
The longer you wait, the more equity you’ll need and the less advantageous the investment becomes.
Choosing the Right Investment Property
Not all investment properties are created equal. Here’s what to look for in the current market:
1. High-Growth Areas
Focus on suburbs that are:
•Below the 5% Deposit Scheme price caps (high demand)
•Showing strong rental yields
•In areas with infrastructure development
•Attracting population growth
2. Strong Rental Demand
Look for properties with:
•Proximity to employment hubs
•Good schools and amenities
•Features that appeal to renters (parking, outdoor space)
3. Realistic Cash Flow
Ensure you can comfortably service the loan even with:
•Potential vacancy periods
•Maintenance and repair costs
•Property management fees
Risk Management: Protecting Your Investment
While using equity to invest in property can be highly rewarding, it’s essential to manage the risks:
1. Maintain a Buffer
Keep 3-6 months of expenses in reserve to cover:
•Vacancy periods between tenants
•Unexpected repairs or maintenance
•Personal income disruptions
2. Don’t Overextend
Just because you can access equity doesn’t mean you should use it all. Conservative borrowing ensures you can weather market fluctuations and maintain financial stability.
3. Diversify Your Strategy
•Different property types (house vs. apartment)
•Different locations to spread risk
•Mix of high-growth and high-yield properties
4. Professional Guidance
Work with experts who can help you:
•Mortgage broker – Find the best loan structure and rates
•Accountant – Optimize tax benefits and structure
•Financial planner – Ensure it fits your overall financial goals
•Property manager – Maximize rental returns and minimize vacancy
The Sanford Finance Advantage
At Sanford Finance, we specialize in helping homeowners unlock their equity and build wealth through strategic property investment. With over 19 years of experience and access to 40+ lenders, we can help you:
1. Maximize Your Borrowing Capacity
We’ll help you structure your loans to access the maximum useable equity while maintaining comfortable serviceability.
2. Find the Best Rates and Terms
With access to over 40 lenders, we can compare options to find the most competitive rates and favorable terms for both your home loan and investment loan.
3. Navigate Complex Scenarios
Whether you’re self-employed, have multiple income sources, or complex financial situations, we have the expertise to find solutions.
4. Optimize Your Tax Position
We work closely with accountants to ensure your loan structure maximizes tax benefits through negative gearing and other strategies.
5. Move Quickly
In a rapidly rising market, speed matters. We can fast-track your application to ensure you don’t miss out on opportunities.
Real-World Example: The Power of Equity Leverage
Let’s look at a realistic scenario:
Sarah and Michael’s Situation:
•Own a home in Brisbane valued at $850,000
•Current mortgage: $450,000
•Combined income: $180,000
•Useable equity: $230,000 (($850,000 × 80%) – $450,000)
Their Investment Strategy:
•Purchase investment property in high-growth Brisbane suburb: $920,000
•Use $184,000 equity for 20% deposit
•Use $46,000 equity for purchase costs
•Investment loan: $736,000
•Expected rental income: $750/week ($39,000/year)
•Loan interest (6.5%): $47,840
•Tax benefit (37% bracket): $6,231
After 12 Months (assuming 10% Brisbane growth):
•Investment property value: $1,012,000
•Home value growth (8%): $68,000
•Total equity increase: $160,000
•Net position: $149,391 wealth increase (after actual costs)
This is the power of leverage in a rising market.
Taking Action: Your Next Steps
If you’re ready to explore using your equity to invest in property before prices surge further, here’s what to do:
Step 1: Get Your Property Valued
Understand your current equity position by getting an up-to-date valuation of your home.
Step 2: Calculate Your Useable Equity
Use the formula: (Property Value × 80%) – Current Loan Balance
Step 3: Assess Your Borrowing Capacity
Consider your income, expenses, and ability to service additional debt.
Step 4: Speak with a Sanford Finance Specialist
Book a free consultation to discuss your options, explore loan structures, and understand your investment capacity.
Step 5: Research Investment Locations
Identify high-growth areas that align with your budget and investment goals.
Step 6: Move Quickly
In a rapidly rising market, hesitation costs money. Once you’ve done your research and received professional advice, act decisively.
The Window is Closing
The expanded 5% Deposit Scheme has created a unique market dynamic that is already driving significant price growth across Australian property markets. While first home buyers scramble to enter the market with minimal deposits, existing homeowners have a powerful advantage: the ability to leverage substantial equity to secure investment properties in high-growth areas before prices surge further.
The data is clear: independent analysts project growth of 3.5% to 9.9% in 2026, with some areas potentially seeing even higher increases. Every month you wait, property prices rise, requiring more equity and reducing the investment’s attractiveness.
But this isn’t just about timing the market—it’s about time in the market. Property investment is a long-term wealth-building strategy that benefits from both capital growth and rental income over time. The sooner you start, the longer you have to build wealth through leverage.
At Sanford Finance, we’re here to help you navigate this opportunity with expert guidance, access to the best loan products, and a strategic approach tailored to your financial situation.
Don’t let this opportunity pass you by. Contact Sanford Finance today to discuss how you can unlock your home’s equity and build long-term wealth through strategic property investment.
Ready to unlock your equity and invest in property?
Ivo De Jesus is the founder and principal mortgage broker at Sanford Finance, with over 19 years of experience helping Australians build wealth through strategic property investment.
Disclaimer
This article is intended to provide general information only and does not constitute financial advice. Property investment involves risks and may not be suitable for everyone. You should consider your own financial situation and seek professional advice from a qualified financial adviser, accountant, and mortgage broker before making any investment decisions. Past performance is not indicative of future results. Sanford Finance is a credit representative and does not provide tax or financial planning advice.
Oct 3, 2025 | First Home Buyers, Purchase, Real Estate
The recent expansion of the Australian Government’s 5% Deposit Scheme has created a huge buzz, and rightly so! It’s a fantastic opportunity for first home buyers. However, with all the excitement comes a lot of chatter, and unfortunately, a lot of misinformation.
As home loan experts, we’ve heard it all. These myths can be confusing and might even discourage you from pursuing your dream of homeownership. Today, we’re setting the record straight. Let’s bust five of the most common myths about the 5% Deposit Scheme.
Myth 1: “I probably earn too much to be eligible.”
BUSTED! This is perhaps the biggest and most important change. As of October 1, 2025, the income caps for the 5% Deposit Scheme have been completely removed. It doesn’t matter if you’re a high-income earner; if you meet the other criteria (like being a first home buyer), you can now apply. This opens the door to a whole new group of people who were previously locked out.
Myth 2: “It’s impossible to get a spot; they run out instantly.”
BUSTED! This used to be a major source of stress. The scheme previously had a limited number of places available each financial year, and they were snapped up quickly. Not anymore. The government has removed the cap on the number of places. This means there’s no need to rush or worry about missing out on a spot.
Myth 3: “The price caps are so low, I can only buy a tiny apartment in the middle of nowhere.”
BUSTED! The government has significantly increased the property price caps to reflect the reality of today’s market. For example, in Sydney, the cap has been lifted from $900,000 to $1,500,000. In Melbourne, it’s up to $950,000, and in Brisbane, it’s $1,000,000. These new caps give you far more flexibility to find a home that genuinely suits your needs and lifestyle, whether it’s an apartment, a townhouse, or a house and land package.
Myth 4: “I need to have a perfect credit history and zero debt.”
BUSTED! While a good credit history is certainly helpful, you don’t need to be perfect. Lenders will look at your overall financial situation, including your income, expenses, and existing debts. The key is demonstrating that you have a solid savings history (for the 5% deposit) and the capacity to comfortably repay the loan. At Sanford Finance, we specialize in finding lenders who can work with a variety of financial situations.
Myth 5: “I can just go to my bank. I don’t need a mortgage broker.”
BUSTED! While you can go directly to a bank, you’re limiting your options. Your bank can only offer you their own products. An independent mortgage broker, like Sanford Finance, works with a wide panel of lenders (we have over 40!).
Here’s why that matters, especially with this scheme:
- Not all lenders are participating in the scheme. We know exactly which ones are.
- Different lenders have different credit policies. We can match you with the lender most likely to approve your application.
- We do the legwork for you. We handle the paperwork and the negotiations, saving you time, stress, and potentially money.
Don’t let myths and misunderstandings stand between you and your first home. The expanded 5% Deposit Scheme is a powerful opportunity, and with the right guidance, you can make it work for you.
