$100K p.a. single or $150K p.a. dual income - borrowing capacity

Hey guys,

I'm curious to find out, if all things being equal apart from the monthly expenses (in reality, a single person would have nearly half the amount of expenses as a couple), who would have the better borrowing capacity from lenders:
A single person on a $100K income or couple with $150K combined income?

Second part to the question:
At what point, in terms of salary, would the single person's borrowing capacity, and the couple's borrowing capacity equally meet?

I hope this question makes sense to you.


Cheers,

Taku

 

Sounds like a question for @Redom to answer

 

A couple earning $150,000 is generally going to service stronger but this of course depends a lot of other factors like negative gearing benefits that can be applied to each applicant, etc.

The correlation between the 2 is quite similar. So approximately $200,000 p/a in income is equivalent to about $190,000 in income for a couple.

 

Hey @Shahin_Afarin
Thanks for the feedback.
Can you explain the quoted sentence?

I'm a little confused here.


Cheers,

Taku

 

So the total incomes would need to be close together - again is the single applicant is earning $100k then this would equate to a couple earning $50k each.

What will skew this figure is other bits and pieces like negative gearing and tax rate thresholds.

 

So does expenses not play a huge role in borrowing capacity?
A single person may have $1000/month in expenses, whereas a couple may have $1750/month in expenses?
Hence, even though a single person has less overall income, their expenses are significantly lower.

 

The living expense is higher but the tax thresholds are different as well. So the single guy earning $100k is getting tax more than the couple making $50k each. This is what I was referring to in the previous post in that tax rate thresholds amongst other things skew and change the figures.

 

Ahh k right, I get this now. Thanks for clarifying @Shahin_Afarin.
I never took into consideration the tax threshold.

Wow so the single person would actually have to make more that the couple to have same borrowing capacity - wow.