How much can you borrow?
Working out your borrowing power helps you to narrow down your property search and lets you picture what the financial commitments of a mortgage will be.
Do your calculations
Check out our simple borrowing capacity calculator that works out a rough estimate for you.
Use our calculator
Consider applying for pre-approval
With pre-approval in place, you can be more confident of your purchase limit and that you really are able to buy. Having a loan pre-approved (typically valid for 3 months) is especially handy at an auction.
Know the criteria
Your borrowing power is typically based on your income, debts, financial commitments, credit history, loan type, employment history, savings, stability of residence and assets.
Talk to your n1 broker
Your Mortgage Choice broker can take you through all the available options and a borrowing eligibility assessment so you’ll have a clear idea of what you can afford.
What can you afford to repay?
Your home buying budget isn't only based on what you can borrow. You also need to be realistic about your ability to service the loan without over extending yourself so you’ll be comfortable with your repayments.
Start making a budget
It’ll help you see what you’re spending, where you can save, and what could afford to repay every fortnight/month – note that this figure ultimately should be your guide for how much you should borrow, no matter how much you can afford to borrow.
Consider the unexpected
Factor in potential events such as interest rate rises, work changes or even accidents, and plan for a financial buffer. Ideally you should always have some spare cash to stash away after paying all the bills (including the mortgage). As a guide, your mortgage repayments should not exceed 30% of your gross (pre-tax) income.
Talk to your Mortgage Choice broker
Want to find out more about balancing your borrowing capacity with what you can comfortably afford? Your n1 broker can chat through the options available and give you expert advice.