I'm buying a home, how much can I borrow?

April 05, 2017
Rikki Stanley

Are you considering buying a home but are not sure how much a lender will give you to buy it?   Then Derek McLeod, your Mortgage Choice home loan expert in Carindale can crunch the numbers for you.

Getting the ball rolling with buying your first home means you will need to know exactly how much you can borrow, what deposit you will need, and more importantly, how much you can afford to repay if you do get a home loan. 

If you don't have a deposit, do you have a guarantor ready to support you with either equity from their own property, or cash?

Crunching the numbers on how much you can borrow– online calculators

Online calculators are useful for giving you a ball park figure of what you can borrow, but it is very easy to get it wrong. It often pays to go straight to a qualified expert to work it out accurately for you.

If you would like to crunch the numbers yourself before speaking with a broker, Mortgage Choice offers a simple borrowing capacity calculator to help you estimate your borrowing power. Click here to use our calculator.

Your broker can save you the time, and do the maths for you

A mortgage broker can compare not only how much you can borrow, but exactly how much each different lender will lend you, all at the same time, using their sophisticated software that works with each lender’s specific lending criteria. Mortgage Choice has more than 20 lenders on their panel plus expertise in all of their different products, so they can help you narrow down not only how much to lend and who from, but which specific loan product to go with that best suits you. 

Make sure you can afford your loan

Often online calculators will not take into consideration your every day spending, but this needs to be considered to make sure that at the end of the day, when you move into your new home, you actually can afford to not only pay off your loan, but to live.

Break the big picture down

Take into consideration your budget and cash flow. Include saving for holidays and events in your life that will cost you money in the future. Look at the big picture and all the little images that add up to it, and what that looks like financially. Include credit cards, buying furniture, cars, toys, technology, kids, schooling – everything that adds up.

Make sure that even if a lender says they will lend you more than what you thought, if you took that money and bought that home, will you really be able to afford it?

Stepping Stones to your Dream Home

Sometimes it is better to be conservative when buying your first property in an increasingly expensive housing market. Build up to that dream home, don’t expect to get it on your first property purchase. Often you will need to upgrade a few times to finally get to the point where you say, yes, this is my dream home. Take your time, and get it right. 

Make an informed choice on how much to spend on a home

Once you know exactly how much you can borrow, you can determine exactly what your maximum spend will be on a home when looking at properties to buy. If this figure is based on how much home loan you can afford to repay, rather than how much lenders may give you, you can make a confident and informed decision when you are in the process of negotiating the purchase price of your new home.

Know your purchase price limits based on maths, not emotion.   

Want us to do the maths for you?

Book your free consultation with Derek McLeod to determine your borrowing capacity here.

For further information on this or any other topic, please contact your mobile mortgage choice broker,

Derek McLeod on:

Mobile 0405 150 859,

Email derek.mcleod@mortgagechoice.com.au

Visit www.mortgagechoice.com.au/derek.mcleod

Message Derek on facebook at https://www.facebook.com/MortgageChoiceCarindaleDerekMcLeod/

Or simply click on the contact us tab on this page. 

If this information has been helpful to you or might be relevant to someone you know, please share it. 

Derek is looking forward to helping you determine your borrowing power today.  Thanks for reading our blog.


Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

Posted in: First home buyers

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