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Borrow More With Earn Baby Earn

This final part of our guide to getting investment ready highlights ways to increase your income so you can borrow more, writes Peter Norris.

By: Peter Norris

1 December 2022

Many Kiwis want to invest in property. They get excited. Find a property they think will make a good investment. Then they apply to the bank for the money. And just as it seems like they’re on the path to financial freedom, the bank says no.

Heartbreak. What should these clients do? They still want to get ahead financially and think investing in property is the way to do it for them. But they can’t get a loan to invest. At least, not yet. For the most part – in fact, in almost every circumstance – these investors are left on their own. Bankers don’t want to help because they don’t fit the box, and brokers don’t want to help because there’s no payday in sight. So, the clients are left to figure it out for themselves.

Now, over time the amount they can borrow from the bank will increase. Their equity will improve as their house increases in value. And their incomes will rise through inflation and advancing their career at work. So, if you can’t get a mortgage for an investment property today, perhaps you’ll be ready in six years. But that’s still a long time away. Couldn’t you shortcut the process? Could there be a way to get it down to one or even two years? That’s what our process for getting investment ready is all about. It gives you six real strategies that you can use to get investment ready faster. Over this issue and the last five I’ve broken down those strategies.


Named after a line from the catchiest song of the 70s (“Burn, Baby Burn” from Disco Inferno), Earn Baby Earn is the strategy that focuses on increasing your income. This allows you to borrow more.


It increases your income so you can borrow more, because you now have more disposable income to service the higher lending amount.


What do I need to use this strategy?

• You either need one of the partners in your household to increase the hours they work.

• Or you need to be able to negotiate for an increase in salary, a higher paid job, or to restructure your remuneration package.

• Or to develop a third income stream that the bank counts as provable income.

This strategy won’t work for everyone, but you should still consider whether it could apply. It is often used by investors and has enormous potential. You’d actually be surprised how often clients of ours have used this strategy and have ended up getting pay rises they didn’t think they would get. Even if the pay rise doesn’t result in more lending, it’s a great outcome!


If one of the income-earners in your household increased their income from $80,000 to $90,000, that $10k pay rise would allow you to borrow between $55,000-$100,000 more for an investment property.

There are five ways investors typically increase their incomes.

• If one partner has taken time off to raise children, they can decide to start working again. This takes them from a one income to a double income household.

• If one partner is currently working parttime, consider increasing their hours to generate more income when applying for a mortgage.

• One partner (or both) could have a conversation with their employer about increasing their pay. Applying for a mortgage can often act as the trigger to start these conversations. Like I said above, you’d be surprised how often this works.

• Another option is to seek out higher-income employment. Large leaps in income often happen when switching jobs. Probably more so now than usual given the economic environment.

• One option for those earning bonuses or commission is to negotiate a change in salary structure.

– Since your commission and bonuses are variable, the bank will sometimes include as little as 50 per cent of this income when assessing your mortgage application.

– Sometimes it is worth accepting less money overall for more of it to be guaranteed. If you can lower your commission and increase your base salary, you can sometimes borrow more.


• Decide which of the above you can use. Then have a conversation with your employer about the pay you earn or the hours you work.

• Then, you need evidence that you can show the bank. This could be payslips, an amendment made to your employment agreement, or a letter from your employer.

This is the last of our six strategies to getting investment ready. The goal for me is to show you that getting a “no” or a decline, doesn’t have to be long-term and that there are some simple, really effective strategies you can adopt to get in the best position to borrow money. If you’re focused on your own goal to purchase investment property, or improve your financial freedom, then don’t let a decline slow you down. Chat to your adviser and see where your shortfall is. Then adopt the strategy to solve that.


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