How much can I borrow?

June 23, 2016
Simone Ruddock

Working out your borrowing ability is an important step before purchasing your property.

The main factors to consider are:

  • Your income
  • Your expenses
  • How much debt you have
  • How much deposit you have

Taking the time to make a budget and knowing each of these factors relating to your finances will help you find out what home loan you can afford.

Then contact us or use Mortgage Choice’s home loan calculators to help you figure out how much you may be able to borrow – use the How Much Can I Borrow calculator, and the Home Loan Repayments calculator.

Your income

What sources of income do you have?

  • Regular wage or salary
  • Self-employed income
  • Centrelink income. Note that not all incomes from Centrelink are acceptable for loan serviceability calculations – check with us and we can provide information here
  • Rental income
  • Income from other investments

Your expenses

What does it cost you to live? Everyone’s living expenses are different and some people operate with a budget and some don’t – remember a budget is a way of telling every dollar where to go before you spend, not wondering afterwards ‘where did all that money go?’

Here’s a link to our cashflow planner which may help to calculate your living expenses.

Existing Debts

Lenders want to know what existing commitments you have to list out all your existing loans – showing the current balance and repayments, your credit cards – showing the balance and limit, your HECS/HELP debt, etc.


You may have already saved a deposit for your purchase or you may still have some saving to go. Either way, determine how much you currently have and then decide – do you want to contribute all this to the purchase or do you want to keep some back for other items such as:

  • Curtains
  • Garden
  • Furniture
  • Other household goods
  • Other purchases – car, holiday, wedding, etc.

Where to from here?

If you can list out all this information, determine how much you can borrow and be comfortable with how the figures are looking, it’s time for you to sit down with us and consider what loan types may meet your needs. It’s no longer a case of just asking a lender for a loan but a matter of working out what needs you have and maybe customising the various loan features to a product specifically for you – what is right for you is not necessarily the right loan for your best friend or your neighbour.

Use our home loan repayments calculator and talk to us to determine what best suits your needs.

For more information, (or to compare this story to your circumstances) contact Peter Ruddock at Mortgage Choice on (03) 9877 6471 or

Posted in: Home loans

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