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.
How it works
At Mortgage Choice, we want to help you make better choices with your finances so you can enjoy the things in life that matter to you.
To do this, we need to understand a little more about your individual needs and circumstances. The Solution Finder enables you to let us know what information you are seeking - which should make for a faster, more efficient search for you.
Simply select what you are looking to do from the first drop down menu - whether that is buying your first home or sorting out your insurances.
Then, select the stage you are at - whether you have just started out with your research or you are already well into the process.
Clicking on 'Get started' will then send you off to a page of content which is directly related to the information you need.
However, if it doesn't quite suit your needs, or you are looking for something completely different, just contact us on 13 77 62 - we are here and ready to help.
Home buying advice - What can I afford to buy?
Before you start on the adventure of looking for your dream home, there are two key questions that need to be answered – what can you afford to borrow, and what can you afford to repay?
Help me work out...
How much I can borrow
My loan repayments
My savings target
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2. Income and Expenses
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3. Your Affordability
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- Home Loan Repayment
- Total Expenses
You may be able to borrow between
Talk to a Mortgage Choice broker today to get a loan pre-approval so that you can house hunt with confidence.
Unfortunately it doesn't look like you can borrow for a home loan. Please check that you've entered your details correctly.
If you need help to get your finances on track, check out our Financial Planning advice.
Your borrowing power estimate:
You may be able to borrow up to:
I want to borrow
at an interest of
Your interest only monthly repayment
Full monthly repayment thereafter
Your monthly repayment will be:
Options I want:
We've updated the results with the lowest rate from our lender panel based on your selected options.
There's a lot to consider when choosing the right loan. Our brokers can help with expert advice at no cost to you.
How much can I borrow?If you’re in the market for a new home, chances are one of your key questions is ‘How much can I borrow?’
There’s no single answer because this is one area where lenders – and the different approaches they take – vary widely. Watch this quick video for more.
How much can you borrow?
Do your calculations
Check out our simple borrowing capacity calculator that works out a rough estimate for you.
Consider applying for pre-approval
With home loan 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.
Let's say your borrowing capacity calculation came back at $350,000.
On a principal and interest loan at a 6% interest rate for 30 years, the repayments will come in at $2,098.43 each month.
If your budget reveals that you're only saving $2,000 per month after all the regular bills and expenses are paid, you should look at where you can make savings, or reduce the amount you're looking to borrow.
What can you afford to repay?
Start making a budget
It’ll help you see what you’re spending, where you can save, and what you could afford to repay every fortnight/month.
It is important to note that your repayment figure is 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.
Use this handy calculator
Quickly work out what your repayments will be on your loan.