MyRate Education Centre
Your Borrowing Power
When you apply for a loan the lender will look at your current financial situation to determine how much you can borrow and your ability to repay it.
Remember:
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| Even if you have a large deposit or a lot of equity does not mean you are capable of servicing a loan. There are many other things that are taken into account which are shown below. |
This is calculated from:
- Gross annual income (your whole income for the year before tax)
Plus, any other income such as:
- Rent on investment properties
- Federal family assistance
- Two years proof of income from investments (not the growth in share values, but the dividends received over the last two years)
The lender will then consider any expenses you have, by looking at:
- The number of applicants and any dependant children.
- Credit card limits
- Store account limits
- Interest free limits
- Outstanding balances on existing properties
- Outstanding balances on personal/car/other loans
- Maintenance payment
- Rent payments (if you will continue to pay rent)
After considering this information, the lender should be able to let you know exactly how much you can borrow.
You can use our quick, 2 minute pre-approval calculator to determine your approximate borrowing power.
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