The Income Most People Forget to tell Their Broker About.

A surprising number of people miss out on extra borrowing power simply because they don’t tell their broker about their bonus income. In some cases, it can add over $100,000 to what you can borrow - which can be the difference between a “nice” place - and your dream home.

Don't hide your light under a bushel - tell us about that bonus!

Affordability is still a challenge in Australia. Yes, rates have dropped a little, but the cost of just about everything else - energy, groceries, and anything in between - has jumped far faster than wages. Supposedly, salaries have risen by about 4.5%, but most of us know that doesn’t stretch as far as it used to.

So when you’re applying for a new home loan or refinancing, it pays to put everything on the table. If you’re PAYG, your broker will usually ask for your most recent payslips and your ATO income statement or notice of assessment. But here’s the thing - annual or half-yearly bonuses often don’t show up on these documents. I’ll always ask about them, but not every broker will.

Why does it matter? Most banks will use bonus income in their assessment if it’s been paid for at least two years in a row - they’ll either take the lower amount or average the two years. They’ll also “shade” it - usually using 80% of the averaged amount, because it’s not guaranteed income.

Take Chloe, for example. She’s single, earns $156,000 with no liabilities, and works for a large consulting firm.

In 2023 she received a $23,400 bonus. In 2024, $22,500.

• Without her bonus, her borrowing capacity was about $820,000.

• With it? Over $950,000.

  
  

All it took was providing her payslips showing the bonus, and the bank factored it in.

The extra capacity meant Chloe could buy a light-filled apartment in Neutral Bay, using $300,000 of her own savings. She’s now enjoying a home she might have missed out on if we hadn’t uncovered that extra income.

If you receive a bonus, don’t let it go to waste. Let’s work out your true buying power before you start house-hunting.