What’s your potential borrowing power?
This calculator provides an indication on how much you may be able to borrow based on your income, expenses and dependents. For a precise and accurate estimate of your borrowing power fill the form at the bottom of this page and one of our brokers can assist you.
Speak with a broker to discuss your borrowing power:
Frequently asked questions:
How does a borrowing power calculator work?
The Borrowing Power Calculator calculates a maximum potential loan amount available based on the income and expenses entered. The amount calculated is only an estimate of the amount to be borrowed and does not take into account specific factors used by individual lenders in determining their own criteria. The calculator also displays the type of repayment required, at the frequency requested, in respect of the loan parameters entered, namely amount, term and interest rate. The Product selected determines the default interest rate for standard variable products or the default interest rate and fixed period for fixed rate loans. In both scenarios, the customer can manually amend this interest rate. In the case of the fixed rate loans, the default standard variable interest rate will be used once the fixed period has completed.
These calculations are done at the repayment frequency entered, in respect of the original loan parameters entered, namely amount, annual interest rate and term in years.
What does borrowing power mean?
Borrowing power refers to the maximum amount a lender will lend to you when taking into consideration your income, expenses, dependents, credit score and existing debt for the purposes of buying property. Many Australian lenders and brokers offer online borrowing power calculators (like this one) that can help estimate how much you can borrow based on your income and expenses. These calculators can provide a rough idea of your borrowing capacity, but keep in mind that they are just starting points. To get an accurate assessment, it’s recommended to consult with a broker – the reason being the online calculators don’t take into account your full situation. Borrowing power can change across each of the banks depending on their credit policy, your personal situation and the loan amount you require.
How does debt or my credit score affect my borrowing power?
Your credit history plays a critical role in the mortgage approval process. Lenders use your credit score and history to assess your creditworthiness. A good credit score can help you qualify for a larger loan amount and secure more favourable interest rates. Make sure to review your credit report and address any issues before applying for a mortgage.
Debt and credit cards serve to reduce your borrowing power. This includes things like HECS, credit cards, personal loans, other home loans and car loans or leases.
How can I increase my borrowing power?
It’s easy to identify ways to increase your borrowing power, but sometimes harder to implement. Here are a few things you can do to increase your maximum borrowing capacity:
- Increase your income
- Reduce your debt
- Buy with a partner
- Reduce your living expenses
- Maintain a good credit score
For more information on ways to boost your borrowing power, check out our blog here.