How Much Can I Borrow?

Your borrowing capacity or the amount you are likely to be able to borrow based on your circumstances and income - will vary between lenders. Different lenders have different methods of assessing borrowing capacity, assess 'risk' differently and therefore have different general lending policies.

Although the methods of assessing borrowing capacity differ between lenders, most lenders will look at the same basic things:

• Your existing income.
• Anticipated rental income (in the case of an investment purchase).
• Other financial commitments.
• General living expenses including dependents.
• existing asset position, including the size of your deposit.

They may also look at any property currently or previously owned, the type of property you are looking at (eg. house, apartment), and the type of loan you are applying for.

Check how much money you can borrow using this home loan calculator

How do you maximise your borrowing capacity?

While the criteria lenders base your borrowing capacity on may look pretty much set in stone, there are a few things you can do prior to applying for a loan that may help increase your limit.

• Pay off outstanding term debts eg. personal loans.
• Pay off and close any credit card, overdraft or line of credit facilities to reduce potential debt.
• Consider reducing the credit limits on any facilities you need to keep open.
• Set a budget and stick to it - this can help increase your deposit and also show off your money skills to your lender.

More Information on How much can I borrow?

For a rough guide, you can check out our how much can I borrow calculator for a guide to how much you can borrow.

For more information on home finance in your best interest, simply fill in a contact form and we will have a home finance broker in contact with you within two business hours. Alternatively, call us at any time on 13LOAN or for overseas callers +61 2 90188417.