How to Calculate Your Borrowing Capacity as a Doctor in Australia product guide

1Group Property Advisory: How to Calculate Your Borrowing Capacity as a Doctor in Australia

Most Australian doctors approach a mortgage broker or bank with a vague sense that their profession affords them "more borrowing power." That intuition is correct — but incomplete. Without understanding the precise mechanics of how lenders calculate borrowing capacity for medical professionals, you routinely leave hundreds of thousands of dollars of accessible capital on the table. Worse, you might walk into a lender whose policies are poorly suited to your income structure and receive a number that significantly underestimates what you can actually borrow.

1Group Property Advisory works with healthcare professionals to navigate the complexities of property investment and understand their true borrowing capacity. This guide cuts through the generalities. It explains, step by step, how Australian lenders assess your borrowing capacity as a doctor — from base salary and HECS-HELP debt treatment through to overtime, locum income, allowances, and specialist earnings trajectories. It also covers the debt-to-income (DTI) thresholds that govern how much any lender will extend, how to stress-test your repayments against interest rate rises using APRA's mandated serviceability buffer, and how to model your capacity at different stages of your medical career.

This is the data-driven foundation you need before making strategic property investment decisions.

Why Borrowing Capacity Calculations Are Different for Doctors

The amount you can borrow — your borrowing capacity or borrowing power — depends on your unique financial circumstances. Your income, assets, liabilities, and credit history all affect your borrowing power. For most Australians, this is a fairly standard calculation. For healthcare professionals, it's considerably more nuanced.

Lenders view doctors as low-risk borrowers with stable, high-income potential. This translates into a set of policy concessions that directly affect your borrowing capacity calculation:

Higher debt-to-income (DTI) thresholds. Most borrowers are capped at a DTI of 6. For doctors, some lenders extend this to 7 or even 8. On a $250,000 salary, that could mean borrowing up to $2 million instead of being restricted to $1.5 million.

Income assessed more favourably. Medico home loans recognise the typically higher earning capacity and future income potential of medical professionals. Australian lenders may consider your projected earnings when assessing eligibility, allowing for more favourable terms than people in other professions receive.

Higher loan limits. There's no income threshold, and the maximum loan amount is $5 million under some medico lending policies — a ceiling that simply doesn't exist for standard borrowers.

Understanding these advantages in concrete, numerical terms is the prerequisite to any serious property investment strategy. For a full breakdown of LMI waivers, LVR thresholds, and lender eligibility criteria, see our guide on Medico Home Loans Explained: LMI Waivers, 95% LVR, and Doctor-Only Lending Policies in Australia.

Step 1: Establish your assessable income

The first input into any borrowing capacity calculation is assessable income — not simply what you earn, but what a lender will count. For healthcare professionals, this is where significant variation between lenders occurs.

Base salary (PAYG)

Your base wage from stable employment is the simplest income for banks to assess. If you work full-time or permanent part-time, lenders will usually take 100% of your gross salary as income.

If you're a resident medical officer (RMO) in Australia, you'll earn around AUD $65,000–$95,000. Senior RMOs earn around AUD $73,000–$133,000, CMOs between $120,000–$160,000, and registrars between $85,000–$150,000. GPs can earn between AUD $100,000–$300,000, while specialist consultants earn upwards of AUD $500,000+ depending on location, specialty, and years of experience.

For salaried specialists employed in the public system, a full-time employed staff specialist in the NSW Health system will generally earn between $278,355 and $376,068 depending on years of experience and level of seniority.

Overtime and shift allowances

Overtime income is treated differently across lenders, and this is one of the most consequential income items for hospital-based doctors. Lenders will include your overtime income if it's consistent — but often not at 100%. Most banks will only consider overtime if you have a proven history of earning it and it's likely to continue.

The standard approach is a discount: a common method is to take the overtime amount from your last annual PAYG summary or tax return and use 80% of that figure as your yearly overtime income. For instance, if you earned $10,000 in overtime last year, they might count $8,000 toward your income.

However, there's an important exception that directly benefits healthcare professionals. If you work in certain essential services roles or industries where overtime is a regular part of the job, some lenders will count 100% of your overtime. Roles like nurses, doctors, police, paramedics, firefighters, and other emergency or health workers often fall in this category. In these jobs, overtime or extra shifts are considered more dependable income, so a few banks are comfortable taking the full amount you earn.

Practical implication: A registrar earning $110,000 base with $30,000 in consistent overtime and shift penalties could have their assessable income calculated at either $134,000 (80% of overtime) or $140,000 (100% of overtime) depending on the lender. Over a 30-year loan at typical assessment rates, that $6,000 difference in assessable income can translate to approximately $30,000–$50,000 in additional borrowing capacity. Lender selection matters enormously here.

This is where independent buyer agent expertise becomes valuable — we understand which lenders recognise the full value of your income structure.

Locum income

Locum work is one of the most misunderstood income types in the medico lending space. Locum doctors in Australia earn up to $2,500 per day, depending on the location, specialty, and duration of their assignments. However, lenders apply significant scrutiny to this income stream because of its variable nature.

Bonuses, overtime, and commissions can boost your borrowing power, but only if you can demonstrate they're regular and ongoing. Most lenders want to see at least 12 months of consistent additional income before they'll include it in their calculations.

For purely locum-based doctors, lenders typically require 12–24 months of consistent locum income evidenced by tax returns and BAS statements (if you're operating through an ABN or company structure). Some lenders will apply a 20% haircut to declared locum income; others will assess at face value if the income history is strong and you hold AHPRA registration in a high-demand specialty. Poor income structuring — if your PAYG and practice income aren't presented well — can cause borrowing capacity to shrink. A medico-specialist mortgage broker can reframe how locum income is packaged for submission.

Private practice and self-employed income

Specialists running their own private practice are treated as self-employed borrowers, which introduces additional documentation requirements. For PAYG applicants, HECS is often reflected through payslip withholding or modelled repayments. For self-employed borrowers, some lenders may rely on taxable income and apply a notional HECS repayment based on income levels.

Self-employed specialists generally need two full years of tax returns and financial statements. Lenders will typically average the two years' net income after add-backs (depreciation, one-off expenses). This can disadvantage a specialist who has just set up a practice and whose first-year income is suppressed by establishment costs — a scenario that specialist medico lenders are more willing to navigate than standard lenders.

Step 2: Understand how HECS-HELP debt reduces your capacity

HECS-HELP debt is the single most commonly underestimated liability in a doctor's borrowing capacity calculation. Many healthcare professionals start their careers with large student loans, which can limit borrowing power despite future earning potential. In 2015, conservative estimates showed that medical school graduates typically had a $250,000 student debt. However, including other factors, some have larger debts, as in the case of a junior doctor's $600,000 student debt as featured on SBS Australia in January 2025.

When applying for a home loan in Australia, your HECS-HELP debt can impact your borrowing capacity, even though it's technically not considered a traditional debt like credit cards or personal loans. At the start of any loan application, you must disclose any outstanding debts — including your HECS-HELP loan. While HECS-HELP doesn't require regular fixed repayments, it still affects your repayment income. Depending on how much you earn, the Australian Tax Office may already be deducting repayments from your salary. Lenders factor these repayments in when calculating your debt-to-income ratio, which determines how much you can safely borrow.

The quantitative impact is significant. Research from Compare the Market revealed a university graduate on a salary of $125,000 paying off an average HECS debt of almost $26,500 would have their borrowing capacity reduced by $95,900. For doctors on higher incomes — where HECS repayment rates are at their maximum — HECS-HELP debt is taken into consideration by lenders who will look at the impact of the debt on income. According to industry analysis, maximum borrowing power will reduce by around 10 times the value of annual HECS repayments.

The 2025 regulatory change you must know

APRA has stated: "An ADI should consider a borrower's HELP debt obligations alongside other debt commitments when assessing their borrowing capacity. This is because HELP repayments are deducted from gross income and are not available to service a mortgage." However, the regulator has indicated more flexibility is appropriate given the nature of these education debts: "APRA considers it is reasonable for ADIs to take into account the individual circumstances of the borrower and the nature of their HELP debts."

Critically, the updated guidance suggests lenders may consider removing HELP repayments from serviceability assessments in certain circumstances, particularly when you're expected to pay off your HELP debt within 12 months.

The government also announced a 20% reduction in student debt in late 2024, which took effect on 1 June 2025. For a doctor with a $300,000 HECS balance, this reduction alone could meaningfully improve your net assessable income and, by extension, your borrowing capacity.

Practical step: Log into myGov and check your exact HECS balance before approaching any lender. If your balance is projected to clear within 12 months at your current repayment rate, you may be able to have it excluded from the serviceability assessment entirely.

This is the kind of strategic insight that separates basic mortgage advice from conflict-free advice tailored to healthcare professionals.

Step 3: Apply the APRA serviceability buffer

Once assessable income is established, lenders don't calculate repayments at the current interest rate. They stress-test them at a higher rate.

The Australian Prudential Regulation Authority (APRA) has told lenders it expects they will assess new borrowers' ability to meet their loan repayments at an interest rate that is at least 3.0 percentage points above the loan product rate.

In July 2025, APRA made it clear: the buffer would remain at 3% — for now. The objective of the serviceability buffer is to ensure that banks make prudent lending decisions, lending to borrowers that are able to repay their loans in a range of scenarios. The buffer provides an important contingency not only for rises in interest rates over the life of the loan, but also for any unforeseen changes in your income or expenses.

What this means in practice: If you're offered a variable rate of 6.0%, the lender tests your ability to repay at 9.0%. Even if you can comfortably afford repayments today, the buffer means banks assess you as if your interest rate were 3% higher, and that shrinks your maximum borrowing limit.

Stress-testing your own repayments: a framework

Use the following table to stress-test your repayment obligations at the APRA buffer rate before approaching a lender:

Figures based on 30-year principal and interest loan, illustrative only.

If you're borrowing $1.6 million, you must demonstrate you can service $12,866 per month — not $9,592 — to satisfy APRA's requirements. This is the number that determines whether you qualify, not the actual repayment you'll make.

Understanding this before you begin your property brief ensures you're targeting properties within your genuine capacity.

Step 4: Factor in the debt-to-income (DTI) ratio

Beyond the serviceability buffer, lenders apply a DTI ratio test as a ceiling on total borrowing. From February 2026, APRA introduced a rule to prevent banks from issuing more than 20% of new loans to borrowers with a DTI above 6 times.

This is where the medico lending advantage becomes most tangible. Most borrowers are capped at a DTI of 6. For doctors, some lenders extend this to 7 or even 8. On a $250,000 salary, that could mean borrowing up to $2 million instead of being restricted to $1.5 million.

Worked examples across career stages:

• Registrar on $120,000 — instead of being capped at $720,000, may access $840,000–$960,000 depending on lender.

• Specialist on $300,000 — may qualify for $2.1 million–$2.4 million instead of $1.8 million.

Important note: The DTI ratio includes all existing debt — not just the proposed loan. Credit card limits, car loans, personal loans, and existing investment property mortgages are all included in the numerator. If you have a $50,000 credit card limit you never use, that $50,000 is still counted against your DTI. Closing unused credit facilities before applying can meaningfully improve your DTI ratio and unlock additional capacity.

This is basic due diligence — and it's often overlooked.

Step 5: Account for living expenses (HEM benchmark)

Australian lenders now use the Household Expenditure Measure (HEM) as a benchmark to estimate your minimum living costs based on household size, income, and location. Even if you're incredibly frugal, lenders will use whichever figure is higher: your actual expenses or the HEM benchmark.

For high-income healthcare professionals, the HEM figure is scaled upward with income. A specialist earning $400,000 will have a materially higher HEM applied than a junior doctor on $90,000. Since 2025, lenders have increased scrutiny of discretionary expenses. Banks are now checking living expenses in detail — every subscription service, dining expense, and gym membership counts.

This is a practical pre-application step: three months before applying for a loan, tighten discretionary spending. Bank statements are reviewed, and a pattern of high lifestyle expenditure will inflate the lender's expense estimate and reduce your borrowing capacity.

As time-poor, high-income earners, doctors often underestimate how closely lenders scrutinise spending patterns. Clean up your statements before they become part of your assessment.

Borrowing capacity by career stage: a modelling framework

The following framework illustrates how borrowing capacity evolves across a medical career, assuming a single borrower, no existing investment debt, and HECS-HELP cleared or near-cleared. These are illustrative ranges based on typical medico lender DTI policies of 7–8x for qualifying doctors.

Indicative only. Actual borrowing capacity depends on liabilities, expenses, credit history, lender policy, and income structure. Does not constitute financial advice.

This table illustrates why career timing matters for property investment entry. A registrar who purchases at $800,000 and holds through to consultant level will not only benefit from capital growth but will have dramatically expanded equity access for subsequent acquisitions — the foundation of the portfolio-building strategy covered in our guide on Building a Property Portfolio as a Doctor: A Stage-by-Stage Roadmap from First Investment to Financial Independence.

This is strategic property investment, not speculative buying.

Common income structuring errors that reduce borrowing capacity

Even high-earning healthcare professionals frequently present their income in ways that reduce the lender's assessment. The most common errors:

Mixing PAYG and ABN income without clear documentation. Doctors who work a public hospital salary alongside private practice billings need to present both income streams coherently. Inconsistency between tax returns, payslips, and bank statements raises red flags.

Claiming excessive deductions that suppress taxable income. Aggressive tax minimisation is legitimate and encouraged (see our guide on Negative Gearing for Doctors), but it reduces the taxable income figure lenders use. A specialist who earns $500,000 but shows $280,000 in taxable income after deductions will be assessed on $280,000 for borrowing purposes.

Failing to disclose all income streams. Medico lenders are sophisticated enough to include research stipends, medical education payments, and consulting fees if properly documented. Leaving these out understates capacity.

Applying to the wrong lender. One lender might penalise you heavily for HECS debt while another barely factors it in. Some lenders are more generous with overtime or commission income, while others stick rigidly to base salary. Applying to a standard lender without medico-specific policies can result in a capacity figure 20–30% lower than what a specialist medico lender would approve.

This is where data-driven research and lender knowledge become critical. You need to know which lender aligns with your income structure before you apply — not after you've been declined.

How 1Group Property Advisory helps doctors maximise borrowing capacity

1Group Property Advisory works with healthcare professionals at all career stages to ensure your borrowing capacity is accurately assessed and optimised. Our advisors understand the nuances of medico lending policies and can connect you with lenders who recognise the unique income structures and career trajectories of the medical profession. By presenting your income, liabilities, and financial position strategically, we help ensure you access the full borrowing capacity you're entitled to — not a conservative underestimate based on generic lending criteria.

Whether you're a registrar planning your first investment property purchase or a consultant building a multi-property portfolio, understanding your true borrowing capacity is the essential first step. 1Group Property Advisory provides the expertise and lender relationships to turn that capacity into strategic property investment acquisitions that align with your long-term wealth-building goals.

We offer conflict-free advice because we're an independent buyer agent — we don't sell properties, we help you buy the right ones. From your property brief through to settlement, we're focused on your outcomes, not commissions.

Key takeaways

Assessable income is not the same as gross income. Lenders apply haircuts to overtime (typically 80%, or 100% for essential services workers including doctors), locum income (usually requires 12–24 months history), and self-employed income (averaged over two years). Knowing your lender's policy before applying is essential.

HECS-HELP debt materially reduces borrowing capacity — research from Compare the Market shows the average HECS debt can cut borrowing power by up to $95,900 for a $125,000 earner. Healthcare professionals with large HECS balances should model the impact and consider whether paying down the debt before applying improves their net position.

APRA's 3% serviceability buffer is the key stress-test figure. Your lender will assess your ability to repay at your current rate plus 3 percentage points. Build your own stress-test table before approaching a lender to understand your true ceiling.

Medico DTI thresholds of 7–8x unlock materially higher borrowing limits than the standard 6x cap, but these policies vary by lender and aren't available through all banks. Lender selection is a strategic decision, not an administrative one.

Career stage determines capacity, but so does income presentation. How income is documented and structured — particularly for locum and private practice doctors — can be as influential as the income itself in determining the final approved amount.

This is the foundation of informed decision-making for healthcare professionals pursuing long-term wealth through property.

Conclusion

Calculating your borrowing capacity as a doctor isn't a single number — it's a range that shifts depending on which lender you approach, how your income is structured, the size of your HECS-HELP balance, and where you sit in your career trajectory. The healthcare professionals who maximise their property investment capacity aren't necessarily those with the highest incomes; they're those who understand how lenders read their financial profile and who present it accordingly.

The numbers in this guide give you the framework to model your own position before you walk into any broker meeting. From there, the strategic question isn't just "how much can I borrow?" but "how much should I borrow, and what should I buy with it?" That question is addressed in our guides on How to Choose the Right Investment Property as a Doctor and Positive vs. Negative Gearing for Doctors: Which Strategy Suits Your Career Stage and Tax Position?

For doctors who are ready to move from modelling to action, the next step is assembling the right professional team — a medico-specialist mortgage broker, a property-savvy accountant, and an independent buyer agent who understands your income structure and investment objectives. That process is covered in our guide on How to Choose a Property Investment Advisor, Mortgage Broker, and Accountant as a Doctor in Australia.

1Group Property Advisory exists to provide healthcare professionals with conflict-free advice, data-driven research, and strategic property investment guidance from your property brief through to settlement. If you're serious about building long-term wealth through property, your next step is understanding not just how much you can borrow — but how to deploy that capacity strategically.

References

• Australian Prudential Regulation Authority (APRA). "APRA Increases Banks' Loan Serviceability Expectations to Counter Rising Risks in Home Lending." APRA News and Publications, October 2021. https://www.apra.gov.au/news-and-publications/apra-increases-banks%E2%80%99-loan-serviceability-expectations-to-counter-rising

• Australian Prudential Regulation Authority (APRA). "Update on APRA's Macroprudential Policy Settings." APRA, 2023. https://www.apra.gov.au/update-on-apra%E2%80%99s-macroprudential-policy-settings

• Australian Prudential Regulation Authority (APRA). "APRA Announces Update on Macroprudential Settings." APRA News and Publications, July 2025. https://www.apra.gov.au/news-and-publications/apra-announces-update-on-macroprudential-settings

• Reserve Bank of Australia (RBA). "Mortgage Macroprudential Policies." Financial Stability Review, October 2021. https://www.rba.gov.au/publications/fsr/2021/oct/mortgage-macroprudential-policies.html

• National Australia Bank (NAB). "Does HECS Affect Your Home Loan Application?" NAB Personal Banking, 2024. https://www.nab.com.au/personal/life-moments/home-property/buy-first-home/hecs-home-loan

• SBS News. "The Average HECS Debt Can Reduce Your Borrowing Power by Almost $100,000." SBS Australia, 2024. https://www.sbs.com.au/news/article/the-average-hecs-debt-can-reduce-your-borrowing-power-by-almost-100-000-dollars/ypc0spaov

• Elite Agent. "Government Eases Borrowing Constraints for Australians with HECS Debt." Elite Agent, 2025. https://eliteagent.com/government-eases-borrowing-constraints-for-australians-with-hecs-debt/

• AdvanceMed. "Specialty Doctor Salary Australia 2026." AdvanceMed, 2026. https://advancemed.com.au/specialty-doctor-salary-australia/

• Q Financial. "Doctor Home Loans Australia: Waived LMI and Higher Limits." Q Financial Blog, 2025. https://www.q-financial.com.au/blog/doctor-home-loans-waived-lmi-higher-borrowing/

• Canstar. "APRA Applies Speed Limit to High Debt-to-Income Loans." Canstar Finance News, 2025. https://www.canstar.com.au/finance-news/apra-applies-speed-limit-to-high-debt-to-income-loans-to-keep-investors-in-check/