What a $100-a-week pay rise actually does for your home buying power

Listen, no one in this economy is saying 'no thank you' to a pay rise of $100-a-week. It's much more likely you'll be saying 'please Sir, can I have some more?'. But in today's property market, it's worth asking a more honest question: does it actually change what you can afford? Or will it help you just keep up and deal with the revised cost to fill your car up at the bowser or weekly grocery bill?

Because while an extra $5,200 a year sounds amazing (and it is!), what matters is what actually lands in your bank account, what other rising costs will absorb it, and how it could improve your borrowing capacity.

Importantly, before you go mentally spending it, you need to factor in tax. And for many Aussies, that $100 a week becomes closer to $60-$70 after tax. Helpful, sure. Transformational? Not quite.

First, a reality check: it won't change everything

So, how much of a difference could it make when it comes to buying a property? Obviously, the higher your income, the more potential you have for saving for a deposit and the higher amount they are likely to let you borrow. Which means you can take on bigger amounts of debt (hurrah!), which in turn could mean you can finally get in the market, or buy a property that is going to have more longevity for your needs, or more growth potential over the long-run (also hurrah for that - because buying and selling properties is an expensive undertaking).

It's always worth chatting with a mortgage broker to figure out what any new pay rise could mean for your borrowing capacity (even if you're not ready to buy right now). You might find the increase has made it possible much sooner than you thought - or added tens of thousands of dollars to what you can now borrow (which is helpful to know during the search stage).

But let's also be clear, it's probably not the magic elixir that's now going to make it possible for you to buy a property that was well out of reach only one pay ago. Especially in higher-priced markets (like, you know, most of Australia right now). But of course, every amount of extra cash helps... and you can be creative and consider what's going to give you the most bang for buck.

If you're not buying yet: this is your breathing room

For a lot of people, that extra income won't go towards a deposit - it'll go towards staying afloat, or be eaten by the inflation monster that appears to be back with a ravenous appetite. Given the recent conflict in the gulf region, we are likely to see the knock-on impact of increased prices of most things lift as a result (honestly, did anyone else have high hopes that 2026 was going to be better? Just me?!).

If you're renting, it's probably a good idea to keep this money somewhere safe and easily accessible if (or more likely when), your rent goes up at renewal. Recent Cotality data has shown over the last 5 years rental increases have grown at more than double the rate of wage growth. In simple terms, a pay rise like this may simply absorb rising costs, rather than create new opportunities. On top of that, we've seen national savings rates dwindle over recent years, so it could be used to boost back up your emergency savings pot if you've dipped into it.

If you're preparing to buy: make it work harder

If buying a home is on your radar, let's think about some options beyond just putting it in a high interest saver amount. $100 a week is $5,200 a year - before tax. Sure, it can boost your deposit amount - but how you structure it matters just as much as how much you save.

One option to consider is the First Home Super Saver Scheme (FHSSS). This allows you to make voluntary contributions to super that can later be withdrawn to buy your first owner-occupied property.

Why consider stuffing it into Super? Because concessional contributions are typically taxed at 15%, which is likely to be more tax-effective than saving at your marginal tax rate, plus you'll get a notional earning amount on top (calculated by the ATO). In simple terms, it could mean more of your pay rise can go towards your future home deposit. If you don't end up buying a home, you've boosted your retirement savings and potentially saved some tax along the way. It won't suit everyone - be sure to check the caps and limits and conditions for buying a property.

HELP debt and borrowing power: what actually matters

Here's where things get more strategic...When it comes to borrowing power, it's not just about how much you earn - it's about what reduces your usable income in the eyes of a lender. And one of the most common (and underestimated) factors is HELP (commonly still referred to as HECS) debt.

HELP debt isn't treated like a typical loan, repayments are calculated based on your income, rather than the dollar amount you owe. Once you earn more than $67,000 a portion of your income is automatically allocated to paying off your student debt. It can get to a whopping 10% of your income if you earn over $179,286 (as at the 2025/2026 FY).

Lenders factor this debt into your expenses, effectively reducing the income available to service a mortgage. So even if your balance isn't large, the repayment can still limit your borrowing capacity.

Here's the part most people don't realise... In early 2025 the Australian Prudential Regulation Authority (APRA) made changes to give lenders and HECS holders a bit more wiggle room. If you're close to paying it off, say in the next year or so, lenders can effectively ignore your student debt and assess you as if you don't have any - which is likely to increase your borrowing capacity. Especially if you are on a high income.

Which means two borrowers on the same income could be assessed very differently - depending on whether your student debt is close to being cleared when they apply. My advice? Speak to a mortgage broker to see if a bank would assess you based on your current HELP debt, ask how far away you are from being assessed like it's no longer there. If you're close to the latter then consider, could or should you redirect that money to paying off your HELP debt sooner to increase borrowing power, or is it better to keep for your deposit or as a buffer amount?

The bottom line

There's a tendency to think that earning more is the solution to affordability. And look, in some ways it is. But it's also far too easy for that amount to be quickly absorbed in day-to-day spending - either through lifestyle creep, or because the cost of everything is rising around us.

If you do get a pay rise, think carefully about how you can get the most out of it (literally), to boost your savings and sense of financial stability, boost your deposit in a tax-effective way, or give you more borrowing power.

The outcome depends less on the pay rise itself - and more on what you do with it. A $100-a-week pay rise won't transform your borrowing power. But more money right now is a welcome outcome for anyone. Deploy it wisely.

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Jessica Brady is a money educator, leading money expert & ex- financial adviser. She is on a mission to educate and empower everyday Australians to be better with money through her online money programs and via the Financially Fierce Podcast. You can learn more at jessicabrady.com.au

This article is general advice only, all of the comments above do not take into account your objectives, financial situation or needs.

Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. Jessica is an authorised representative (No. 1259972) of MoneySherpa Pty Ltd - AFSL 451289 | ABN 32 164 927 708 | Corporate Authorised Representative No. 1305567.