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Pete A.
Pete A.
Zetland, NSW

My partner and I are separating but I would like to try and keep the home. The property is valued at $1.3m and we currently owe $290k. We have agreed on a settlement amount of $700,000 and I would like to see if I can increase the loan to $1M. I have stable employment and earn $270k p.a. There are no other debts, no children and I could rent out the spare room for $110pw. Is this possible?

6 years ago


Hi Pete,

Based on the above details provided, in theory it looks possible. Your affordability seems fine, you won’t be able to use ‘boarding’ income from your PPR as income but that shouldn’t matter. More detail would be required of your income type to be able to give more confidence. By keeping the loan at 70% or less, you can access premium interest rates well below 4% in many instances.

John J Maxwell
Cocalex Mortgage & Finance Consulting

Hi Pete,

Having gone through a divorce myself, I understand what you're going through.

There's enough equity and income to pay out your ex and you keep the loan.

For a bank to process the proposal though, you will need to also have finalised Consent Orders to enable to bank to allow that sort of 'cash out.'

Happy to help if you'd like to discuss this further.

Kind regards,

Tim Russell
0400 530 868

Hi Pete

Sorry to hear that you are separating with your partner.

Yes this is possible to increase the loan to $1m. you can rent out a room if you like but this cannot be used in the serviceability assessment.

Happy to chat with you more about this if you like..

Sam Zammit
South West Lending Solutions
1800 824 325 (Press Option 1 to speak with me)

6 years ago

Thank you all for the feedback, maybe there is a silver lining. I will get back in contact soon


Hi Pete,

Your question HAS been answered quite thoroughly above from the team noting there is indeed a silver lining.

Its one thing to have worked so hard to get the mortgage balance so low, and you shoudl be congratulated for having such a small loan amount!

One thing to consider quite comprehensively when you go down this path is HOW can you maximize your cash flow so it helps you own your home sooner. So you can reduce that mortgage balance quickly without compromise?

OF course ALL lenders would fall over themselves to help you with this loan amount, your income levels and your equity in the property - But how many of them with SHOW YOU how to pay the mortgage out faster? I'm sure your already across this, as evidenced in the past by your small mortgage, and would love the opportunity to share some of the simple yet effective 1%ers that get you to owning your home sooner!

I look forward to hearing the update & welcome the opportunity to explore how that can work for you.



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