Not all debt is created equal—especially when you’re looking to buy property. Knowing the difference between good and bad debt can make or break your buying power. Here’s what to keep in mind 👇
✅ Good Debt
This is debt that helps you build wealth or generate income.
🏠 A home loan for an owner-occupied or investment property
📈 Borrowing to invest in an asset that appreciates over time
💡 Used strategically and managed well
🛑 Bad Debt
This is debt used to buy things that don’t grow in value or drain your cash flow.
🚗 Car loans (especially for depreciating vehicles)
💳 Credit cards with high interest and unpaid balances
💸 Buy Now Pay Later debts that reduce borrowing power
🔍 Why It Matters
Lenders look at your overall financial health. Too much “bad debt” can limit how much you can borrow—even if you’ve got a decent deposit.
💬 Thinking of buying property soon?
Let’s review your current debts and see how we can strengthen your position for your next move