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Other than income and expenses, what affects my borrowing power?
There’s a range of things that affect how much you could borrow. In fact, if you have a play with our 'How much can I borrow’ calculator above, you’ll get a sense of how your borrowing power can go up and down depending on the information you input.
If you want to a more accurate dollar figure, have a chat to a Home Lending Specialist about your individual circumstances.
In the meantime though, here’s an overview of some common things besides income and expenses that could have an impact on your borrowing power.
Your deposit
Generally, the bigger your deposit in relation to the value of the property you want to buy, the more you could potentially borrow.
Take a look at our FAQ – how much deposit do I need?
Your credit score
Lenders will look at your credit score (also known as your credit rating) when deciding whether to lend you money. It’s based on things like how much you’ve borrowed in the past, your previous applications for credit and if you’ve missed payments on things like credit cards, bills or loans. You can find out more – and even check your credit score – on the government’s MoneySmart website.
Your credit card limits
Lenders will take into account the maximum amount you can spend on a credit card or store card, even if you’re not using the full limit.
The property valuation
When you apply for a home loan, your lender might carry out a valuation on the property you want to buy, which could determine how much money they’re prepared lend you.
The home loan type, term and purpose, and your repayment type
Different home loans come with different interest rates – and so do loans for a property to live in vs. for an investment purpose. This affects your regular home loan repayment amount, which can have an impact of how much you could borrow.
Similarly, the length of your loan term (for example, 25 years or 30 years) and your repayment type (principal and interest or interest only) have an impact on your regular repayment amount – which can also cause your borrowing power to increase or decrease.
Your savings
The amount you have in savings can show the lender that you can manage your money and could handle ongoing home loan repayments.
Want to explore ways to maximise how much you could borrow? Take a look at our FAQ below – how do I increase my borrowing power?