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.
Help me work out...
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?
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.