What is Novated Lease?
A novated lease is a car finance arrangement between employee, employer and a finance company. Repayments are made from pre-tax salary — reducing your taxable income but effectively committing part of your pay to the vehicle.
Why it matters for you
Most lenders treat novated lease repayments as an ongoing expense — reducing borrowing capacity. Some will add back the pre-tax portion to your assessed income; others don't. Impact on borrowing can range from nil to $80K+ depending on lender policy and lease amount. Common among hospital-based medical staff.
Last updated: April 2026