How much money you can borrow will depend on your financial situation, your mortgage repayments, the type of property you want to purchase and your overall application. Learn more with our handy graphic below.
Read on for a more in-depth explanation of four things that go towards calculating how much money you can borrow.
Mortgage repayment calculators can give you an indication of what your repayments might be for a particular loan amount.
By playing around with calculators, you’re able to consider how much you are comfortable paying each month in mortgage repayments. Remember, it’s important to not only make your mortgage repayments comfortably each month, but to also have enough money for emergencies or unexpected costs.
Our home loan repayment calculator helps you estimate the true cost of your purchase. It takes into account expenses people often forget about when purchasing a property such as stamp duty, rates, insurance, maintenance and more.
The kind of property you are looking at buying will have an effect on the amount you can borrow. A lender will take into account the value of the property. A valuation carried out on behalf of a lender takes into account the value of the property over the longer term, as well as any current trends in the market. Lenders use the property to secure the loan, so it’s important they can sell the property to recoup any costs, should you be unable to pay mortgage repayments.
For more information about property valuation check out our popular post on preparing your home for a valuation.
If you’re looking at buying an investment property to rent, the lender will most likely take into account the amount of rent you expect to receive for the property as part of the overall loan application process.
At the end of the day, how much you can borrow will be guided by your lender. Lenders and financial institutions have a responsibility to ask questions to ensure the amount you borrow suits your financial situation and that you'll be able to make the necessary repayments each month. Your lender will also look at your credit report and credit history.
Talk to a lender to discuss your situation and to find out how much you can borrow. By talking to a lender you’ll find out exactly what they will require from you for an application, and they’ll be able to go through different types of loans, rates and loan amounts and discuss how they affect mortgage repayments.
If you'd like to get a calculated estimate of your home loan borrowing power, you can use our online home loan borrowing bower calculator.
Remember, we offer pre-approval on home loans so you can shop for a property with more confidence. To organise a home loan pre-approval enquire online, call 13 14 22 or drop into your nearest branch and chat with one of our lending specialists.