Curious About Your Borrowing Power? Let’s Break It Down
Before diving into house hunting, you need to know what you’re working with. Your borrowing power is how much a lender may be willing to offer you based on your income, expenses, and financial situation. It’s a key factor in shaping your property journey—whether you’re buying your first home, upgrading, or investing.
Use our Borrowing Power Calculator to get a quick estimate. Just plug in your details, and in seconds, you’ll have an idea of what you could borrow. No guesswork – just clarity.
So, What Affects Your Borrowing Power?
Lenders don’t just throw out loan approvals – they assess your finances to determine how much risk they’re taking. Here are some of the most common things that they look at:
Income
A higher, stable income generally increases borrowing power. Lenders want to see that you can comfortably meet repayments.
Expenses & Liabilities
Existing debts (credit cards, car loans, personal loans) and everyday expenses reduce what’s available for a mortgage.
Credit Score
A strong credit history can work in your favor, helping secure better loan terms and potentially a higher borrowing limit.
Loan Type & Term
A longer loan term may reduce repayments, affecting affordability, while different loan types come with varying lending criteria.
Interest Rates
Higher rates reduce how much you can borrow, as repayments increase. Securing a low-rate loan can stretch your budget further.
5 Ways to Increase Your Borrowing Power
Reduce Unnecessary Debt
Pay off credit cards, personal loans, or any other liabilities that may impact how much lenders think you can afford.
Save a Bigger Deposit
A larger upfront contribution reduces the loan amount needed and may unlock better rates.
Increase Your Income
If possible, explore pay rises, additional income streams, or even switching to a more stable employment status.
Cut Down on Discretionary Spending
Lenders analyze your recent bank statements. Reducing unnecessary expenses can improve your financial profile.
Consider Different Loan Structures
Some lenders offer more borrowing flexibility with certain loan products - working with a broker can help you find the right fit.
If the numbers don’t look as high as you’d hoped, don’t worry—there are ways to boost your borrowing power before applying for a loan:
What's Next?
Knowing your borrowing power is just the first step. If you’re ready to take things further, we’re here to help.
If you prefer to chat, you can write to us at [email protected] or call us on 08 6285 8120.
Prefer an appointment? Well…