The short answer
A pay rise can lift your borrowing capacity, but timing matters. How banks treat future promotions, first payslips and temporary secondments.
A pay rise or promotion can increase how much you can borrow, but only once it has actually taken effect. Lenders usually assess you on your current income. If the new salary starts before settlement, we can often time your approval around your first payslip at the new rate.
Timing: when does the new income count?
Promotion months away: If your promotion starts in six months but you need approval now, the lender will usually use your current income.
Promotion before settlement: If it starts in a month and settlement is three months away, we can often get conditional approval now and formal approval once your first payslip shows the new salary.
Permanent or temporary?
Lenders only count income they expect to continue.
Permanent promotion: a lasting part of your salary, which lenders count.
Secondment or acting role: temporary, and you’ll likely return to your old role, so lenders generally won’t use it to boost your borrowing.
Worked example
Say you earn $100,000 and you’ve been promoted to a permanent $115,000 role starting next month. Your purchase settles in three months. We can apply now on your current income for conditional approval, then provide your first payslip at $115,000 so the lender can finalise the loan on the higher figure.
Before you apply
Get your promotion confirmed in writing, with the start date and salary.
Check whether the role is permanent or temporary.
Keep your first payslip at the new rate as soon as it arrives.
Tell your broker your settlement date, so they can plan the approval.
FAQs
Can I use a promotion letter instead of a payslip?
Some lenders accept a letter; many want a payslip showing the new salary.
Does a pay rise during approval help?
It can, if it’s permanent and evidenced before formal approval.
Will an acting or higher-duties allowance count?
Usually not, because it’s temporary.
Related: Can You Get a Home Loan While You’re on Probation? · How Life Changes Can Affect Your Pre-Approval · Borrowing Power Calculator
General information only. This article does not take into account your objectives, financial situation or needs, so consider whether it is appropriate for you and seek personal advice before acting. Elephant Financial Pty Ltd trading as Elephant Advisory is an authorised credit representative (ACR 487962) of Yellow Brick Road Aggregation Pty Ltd (formerly Vow Financial Pty Ltd) (ABN 66 138 789 161), Australian Credit Licence 390261.
Gav is the person you want in your corner when it comes to property finance. After years in banking and motor trade finance, he joined Elephant early and never looked back. He's passionate about combining property and finance to help clients achieve their goals through tailored financial structuring, and he's very serious about snacks at meetings.
