How much can a couple borrow for a first home?

The short answer: a couple's borrowing power is both incomes, minus your combined living expenses and every debt you carry, then stress-tested at an interest rate about 3 percentage points above the real one (the APRA serviceability buffer). Two incomes don't simply double the number: lenders shade income they see as less certain — self-employed, casual, overtime, bonuses — and even unused credit card limits and a HECS balance pull the figure down. And the number a bank will approve is a ceiling, not a budget — the most you can borrow is rarely the most you should. The figure that matters is the repayment you can still make in a bad month.

Meet Hannah and Leo

Hannah and Leo are in their early thirties, together four years, renting a one-bedroom flat in Melbourne's east while they save for something with a second bedroom and a bit of yard. Hannah is a marketing coordinator on a salary — steady, same amount every fortnight. Leo is a self-employed carpenter: he's good, he's busy, and in a strong year his business clears more than Hannah earns. On paper they felt comfortable. They'd saved a deposit, and by adding their two incomes together they'd talked themselves into a number north of $800,000 of borrowing power.

They walked into the broker's office expecting that number to be confirmed. It wasn't — twice over, in opposite directions, and both surprises taught them something.

Hannah and Leo aren't real people — but their situation is. Every rule and number in this story is real and linked to its source below.

Surprise one: two incomes don't simply double

The first number came back lower than their napkin maths, and the reasons were mechanical, not personal.

• Uneven income gets shaded. Hannah's salary counts at close to its full value — it's predictable, documented, easy for a lender to trust. Leo's self-employed income is treated more cautiously: lenders generally want about two years of tax returns and financials, and will often use the lower year, or an average, rather than his best year. The same caution applies to casual pay, overtime and bonuses — real money, counted at a discount. So Leo's strong year didn't land at face value the way he'd assumed.
• Living expenses don't halve when you couple up. Lenders benchmark your household spending against a minimum measure (the Household Expenditure Measure). Two people cost more to run than one — just not twice as much — so the expense side of the sum is bigger than a single applicant's, even if each of you feels frugal.

Put together, two incomes usually land at more than one, but well short of double.

The debts you forgot were debts

Then the broker worked through their commitments, and each one quietly trimmed the number:

• The car loan — a few hundred dollars a month the lender counts against them dollar-for-dollar.
• Leo's HECS/HELP balance — the compulsory repayment is a real deduction from serviceable income while it's outstanding.
• A $15,000 credit card they barely touch — assessed on the limit, not the balance, because you could draw it down tomorrow. An unused card still shrinks your borrowing power.
• A Buy-Now-Pay-Later account — increasingly read as a commitment too.

None of these felt like "debt" to Hannah and Leo. To a lender, every one of them is a claim on the income that would otherwise service a mortgage. This is the same serviceability machinery we walked through for a single income in how much can you borrow on one income — the buffer, the assumed expenses, the debts — just doubled up and, in their case, complicated by Leo's income mix.

Surprise two: the bank's maximum is a ceiling, not a budget

Here's where it flipped. Once the broker had the full picture, the number he could get approved came back higher than Hannah and Leo expected — a genuinely big figure. And that was the more dangerous surprise.

Because that figure is the ceiling: the most a lender will hand over, calculated to the edge of what their income can technically service. It assumes both of them keep earning exactly as they do now, every month, with nothing going wrong. But they're a couple with two ways for the plan to wobble — a quiet quarter for Leo, a redundancy, illness, or the baby they're not-so-quietly planning, which would drop them to something close to one income for a year.

Borrow to the ceiling, and a single bad month has no slack in it. The bank's maximum answered "how much will they lend us?" It said nothing about "how much can we still pay when one of us can't?"

The two numbers, side by side

So Hannah and Leo stopped chasing one number and started holding two:

• The ceiling — the maximum they'd be approved for.
• The floor — the repayment they could still cover through a lean stretch of Leo's work, or a year on mainly Hannah's income.

The gap between those two is where mortgage stress lives. The whole game isn't getting approved for the biggest loan — it's choosing a number closer to the floor, on purpose, so the home survives real life. They stress-tested it themselves with the calculator at Moneysmart, at a rate well above today's, the way the APRA buffer already forces the bank to.

What actually moves a couple's number

Because it's a calculation, the inputs are partly in your hands — the mechanics, not advice for your situation:

• Reducing or closing an unused credit card limit removes a phantom debt the moment you do it.
• Clearing a small car or personal loan hands back the repayment the lender was counting against you.
• A second full year of Leo's returns, with his income trending up, lets a lender count more of it with confidence.
• Documented, stable income — even variable income, once there's a track record — is read far more kindly than income the lender has to guess at.

How it played out

Hannah and Leo were approved for a number that flattered them. They borrowed below it — deliberately — landing on the "boring" figure that still left room to breathe in a month where Leo invoiced half of usual. They cleared the car loan and dropped the credit card limit first, which nudged their serviceable number up without earning an extra dollar. The home they bought wasn't the biggest the bank would allow; it was the one they could still pay for on a bad month, with a kid on the way.

The question that settled it was never "how much will they lend us?" It was quieter, and far more useful: how much can we still carry when one of us can't earn? When they could see both numbers honestly, the decision stopped being about the ceiling and started being about the life underneath it.

If you're like Hannah and Leo

This is exactly the maths Havenli does with you — what you could realistically borrow on your actual income mix (messy, self-employed and variable income included), which debts to clear first and what each is worth to your number, and the honest gap between the bank's maximum and a repayment you can live with. General guidance, every figure linked to its source — and when you're ready, Havenli helps you find a broker who'll show their working. See how Havenli works, read the one-income side of the story, or decide whether to use a broker or go straight to the bank.

This story is general information, not financial, legal or taxation advice — Hannah and Leo aren't real people, their numbers are illustrative, and your circumstances will differ. Lending criteria, buffers, expense measures and how lenders treat different income types change and depend on your situation; always confirm the current details with the official sources linked above, and talk to a licensed professional for advice on yours.