Borrowing Safely in Mascot When You’re Asset‑Rich but Income‑Light

Most Mascot owners I meet in their 50s and 60s don’t actually have a borrowing problem – they have a paperwork and story problem. You can be sitting on a paid‑off Mascot unit, $700k in super and a share portfolio, but if your tax return shows $35k of taxable income, the bank’s first answer is often “computer says no”.

Asset‑rich, low‑taxable‑income borrowers can usually still get a loan – or increase one – if they (1) prove real cashflow, (2) keep their loan‑to‑value ratio conservative, and (3) run their own safety checks that are stricter than the bank’s.

In today’s Mascot market – with higher rates, tighter tax rules for investors and an older borrowing population – that discipline matters more than ever.

A Mascot case study: “On paper I’m poor, in reality I’m fine”

A recent client, let’s call her Maria, is 58 and lives in a Mascot apartment she bought off‑the‑plan years ago. Her situation:

• Mascot home worth ~ $1.15m, no mortgage
• $850k in super, mostly balanced funds
• $420k in shares and ETFs generating ~$18k franked dividends
• Part‑time consulting income, taxable income last year: $42k

Maria wanted to borrow ~$350k to help a child buy nearby, fund some renovations and create a buffer for semi‑retirement.

The first bank she spoke to effectively ignored most of her investment income and assessed her as a low‑income borrower with no clear exit strategy due to age. Declined.

What we did differently:

1. Mapped her true income and cashflow – super pension options, dividend history, consulting pipeline.
2. Used a lender comfortable with complex and investment income.
3. Kept the LVR under 30% and structured repayments so she could clear the loan comfortably by 70.
4. Stress‑tested repayments at 3% above current rates, targeting no more than ~30% of her after‑tax income.

Same woman, same assets, same suburb – very different outcome.

That’s the pattern I see constantly around Mascot. The mistake I see most is people assuming their strong balance sheet speaks for itself. It doesn’t. You have to translate assets into a bank‑friendly, and personally safe, borrowing story.

How banks really look at asset‑rich, low‑income Mascot borrowers

1. Serviceability still rules – not your net worth

Lenders in Mascot don’t lend against “being comfortable”. They lend against provable income and regulated buffers.

Most mainstream banks will:

• Apply at least a 3% buffer above the actual rate (APRA guidance).
• Use the higher of the actual rate or a floor rate (often 6–7%+ at the moment).
• Shade or discount certain income types (investment, trust, casual) by 10–40%.

So even if you think a $350k loan is tiny relative to a $1.1m Mascot apartment, the bank still wants to see that, on paper, you can service it comfortably at stressed rates.

What I tell my clients: your asset position gets you a hearing, your income and cashflow get you approved.

2. Investment, trust and company income is usable – when it’s stable

Many Mascot owners hold:

• Shares and ETFs
• Investment properties (often elsewhere in Sydney)
• Discretionary trust portfolios
• Small companies or partnerships

Banks will often count these if:

• You can show 2+ years of consistent distributions or dividends.
• The income clearly flows through to you personally after tax.
• The structure and tax returns match the story.

I go into the nuts and bolts of this in detail in /insights/using-company-trust-investment-income-serviceability-story and the Green Square‑focused guide at /insights/company-trust-partnership-income-green-square-purchase-guide.

For Mascot, the short version is:

• Franked dividends can often be used, with franking credits grossed up then shaded.
• Trust distributions are usable when they’re consistent and not clearly just tax‑driven one‑offs.
• Company profits help only when they’re either paid as salary/dividends or the policy allows “add‑backs” of retained earnings.

3. Age and exit strategy matter more in your 50s and 60s

If you’re borrowing in your 50s or 60s, most banks will:

• Want a clear plan to clear or reduce debt before retirement.
• Question terms that run far beyond 65–75 without a downsize, super, or sale plan.

A credible exit strategy could be:

• Selling an investment property in 5–10 years.
• Downsizing from a 2‑bed Mascot unit to a smaller or regional place.
• Switching to an account‑based pension from super at 60+.

If you can show those numbers stack up, age becomes a risk to manage, not a deal‑breaker.

Your internal safety test: stricter than the bank’s

Across Eastern Suburbs and inner‑south clients, I keep coming back to the same simple rule:

Model total home and investment loan repayments at current rates +3%, and keep them under roughly 30–35% of your after‑tax household income.

This benchmark appears again and again in our work – from Dover Heights to Alexandria to Green Square – because it works in practice, not just in theory.

For Mascot asset‑rich borrowers, I’d add two more guardrails:

1. Keep your overall LVR modest. For retirees or near‑retirees, I’m usually most comfortable at under 40% LVR across home and investment properties.
2. Hold at least 6–12 months of stressed repayments in cash or offset. Not just for the home loan, but for any investment loans tied to your retirement income.

Worked example: Mascot owner, 60, wanting a $400k loan

Assume:

• Apartment in Mascot worth $1.1m, no debt
• Taxable income: $30k part‑time work
• Investment income: $25k (shares and trust distributions)
• Total after‑tax income approx: $48k–$50k per year (~$4,000/month)

Target loan: $400k, 25‑year term, P&I, say 7% rate for stress testing.

On a standard repayment calculator:

• Repayments at 7% ≈ $2,825/month

Stress test at 10% (roughly current +3%):

• Repayments at 10% ≈ $3,640/month

Our 30–35% rule at stressed rates:

• 30–35% of $4,000/month = $1,200–$1,400/month

Conclusion: even if a bank could be persuaded (perhaps by taking more investment income than I’ve assumed), this fails your personal safety test by a mile.

The more sensible move might be:

• Aim for $150k–$200k max, or
• Use interest‑only briefly while you transition super to pension, or
• Combine a smaller loan with staged asset sales.

The message: the number the bank spits out isn’t your safe number. Your retirement and sleep quality are more important than maximum leverage.

Many Mascot owners are asset‑rich but need help turning their balance sheet into safe borrowing power.