What is my borrowing capacity?
The first question most often asked when potential buyers are looking for a new property to purchase is, “How much can I borrow?”. Getting your finances sorted before you start looking for your new home or investment property can save you a lot of time in the long run and put you in a strong position to jump on an opportunity quickly.
Use the calculator below to find out what your borrowing capacity could be for your next purchase.
Borrowing capacity explained
Serviceability is a lender’s assessment of whether you can afford repayments on a new (or increased) loan. It’s based on a range of factors including your income, living expenses and existing debts.
Each lender assesses serviceability differently and bases the figure on their organisation’s policies and assumptions. As a result, your borrowing capacity can potentially change from lender to lender and may differ from what you think you can afford. Speak with your finance broker to learn more about your borrowing capacity.
One of the biggest pain points for buyers is saving enough deposit to put toward their purchase. The amount of deposit needed varies depending on the purchase price, the lender’s policies and whether you’re buying an owner-occupier or investment property.
Some lenders may offer to lend up to 95% of the purchase price of an owner-occupier home. However, if you borrow more than 80% you will likely need to pay lenders mortgage insurance, an additional cost for your budget planning. If you’re looking at purchasing your first, or next, investment property and have equity in your owner-occupier home, you may be able to access this to put toward your purchase.
Whether you’re just starting your research into buying your first home or looking to build your investment portfolio, seek out specialist advice on navigating the process.
Our team of strategists and credit advisors can provide information and guidance to support you to reach your property goals with an effective finance plan and strategy.
Book an appointment to find out more from our team.
Explore our range of finance calculators
Use our calculators to guide budgeting and planning your next move. Then book an appointment with one of our property finance specialists to build a strategy and achieve your property goals.
New investor essentials
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- Free Budget Planner
- Property Investing: A Beginner’s Guide
- Property Investing Finance Fundamentals
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