Stage 3 Impact On Market
Stage 3 tax cuts could increase a buyer’s borrowing capacity by more than $57,000.
Modelling by Rate City shows buyers will need to borrow at capacity to feel the full effect of the tax cuts.
RateCity research director Sally Tindall says their modelling shows a single person earning $100,000 could increase their borrowing capacity by $21,100 while a couple earning $100,000 and $150,000 could borrow up to $57,100 more.
Although increased borrowing capacity would be enticing to many, Tindall says their research shows using the extra money to pay down an existing mortgage will make the money go further.
“If you can put that money into your mortgage, it will save you thousands over the life of your loan and potentially shave years off,” she says.
She says when there is a financial boost across the board it is the sellers who will benefit the most as buyers’ budgets will have increased and everyone trying to buy suddenly has a larger budget.
