Securing a mortgage on a single income is a topic often misrepresented in society. The truth is, it's entirely feasible, provided certain criteria are met.
The key determinant is the level of income. A higher income opens doors to borrowing more with a lower deposit. For instance, an income exceeding $100,000 significantly expands borrowing potential. Additionally, if there are no dependents, the bank may consider additional factors like renting rooms or flatmates' income, contributing positively to the borrowing capacity.
However, it's essential to consider income thresholds when seeking a significant loan. For instance, if the single income is below $60,000 and the goal is a substantial loan, meeting the bank's criteria becomes more crucial. Banks assess borrowers against stress-test rates, usually above 9%. This stress test aims to ensure that the borrower can manage repayments even at higher interest rates.
The misconception that single-income earners cannot secure a mortgage is just that—a misconception. Single-income borrowers can indeed secure loans; the key is aligning income, expenses, and loan size to ensure financial comfort and meet the bank's lending criteria.
At NZ Mortgages, our expert advisers guide single-income borrowers through this process, providing tailored advice and solutions, ensuring they secure the right mortgage to suit their financial situation. Consult our team at NZ Mortgages today.
Keywords: Mortgage Approval, Single Income, Borrowing Capacity, Financial Guidance, Real Estate, NZ Mortgages