Question 1

How much can I borrow for a home loan in Australia?

Accepted Answer

Your borrowing capacity depends on your income, expenses, existing debts, deposit size, and the lender's own credit policy. Most lenders assess your ability to service a loan at a rate higher than the current rate (a buffer), which reduces the amount they will lend. Use this calculator for an indicative estimate, then speak with a broker for a lender-specific assessment.

Question 2

What reduces borrowing power?

Accepted Answer

Common factors that reduce borrowing capacity include high living expenses, existing loan repayments, credit card limits (even if unused), number of dependants, irregular income, interest-only repayments on existing debts, and a smaller deposit requiring lender's mortgage insurance.

Question 3

Does credit card debt affect borrowing power?

Accepted Answer

Yes. Most lenders assess your credit card limit as an ongoing liability, not just your current balance. A $20,000 credit card limit can reduce your borrowing power significantly even if you pay the balance each month. Reducing or closing unused credit cards before applying can improve your borrowing capacity.

Question 4

How accurate is a borrowing power calculator?

Accepted Answer

Online calculators provide indicative estimates only. Each lender applies their own credit policy, assessment rate, expense benchmarks (such as HEM), and internal criteria. A broker-reviewed assessment uses actual lender calculators and your verified financials to give a far more accurate picture.

Question 5

Can I borrow with less than a 20{20caa82a287893fbd3717c1cd8d7689972ec820c109e7c0d232373a948188269} deposit?

Accepted Answer

Yes. Many lenders will approve loans with a 5–10{20caa82a287893fbd3717c1cd8d7689972ec820c109e7c0d232373a948188269} deposit, but you will generally pay lender's mortgage insurance (LMI) on loans above 80{20caa82a287893fbd3717c1cd8d7689972ec820c109e7c0d232373a948188269} LVR. Government schemes such as the First Home Guarantee may allow eligible borrowers to purchase with as little as a 5{20caa82a287893fbd3717c1cd8d7689972ec820c109e7c0d232373a948188269} deposit without LMI. Speak with a broker to assess your eligibility.

Question 6

Is this the same as pre-approval?

Accepted Answer

No. This calculator provides a general indicative estimate only. Pre-approval (conditional approval) is a formal process where a lender reviews your actual financial documents and credit history. Pre-approval gives you significantly greater confidence when making offers on property. Your broker can guide you through the pre-approval process.

Calculators