How Much Can I Borrow for a Home Loan?

What does borrowing power mean?

Borrowing power is the maximum home loan a lender may offer based on your ability to make repayments after expenses and existing commitments. It is not the same as your property budget — deposit, purchase costs and financial goals should all shape what feels comfortable.

What determines how much you can borrow?

Every lender uses its own credit policy, so two banks can reach different answers for the same household. Most assessments consider your income, living expenses, existing debts, deposit size and a serviceability buffer above the actual rate.

• Base salary plus any overtime, bonuses, commission or rental income.
• Declared living expenses, dependants and ongoing household commitments.
• Credit cards, personal loans, car finance, HECS and buy-now-pay-later limits.
• Deposit size and likely loan-to-value ratio.

A $25,000 credit-card limit can reduce capacity even when the balance is $0. Many lenders assess the limit as a potential future debt. Reducing unused limits before applying may improve your position.

Five ways to strengthen your position

1. Review your spending — Use three months of statements to build a realistic picture of your expenses.
2. Tidy up existing debts — Pay down high-interest balances and reduce limits you no longer need.
3. Protect your savings history — Regular deposits and a clear trail demonstrate consistent money habits.
4. Avoid unnecessary credit applications — Multiple enquiries close together can complicate your credit profile.
5. Compare policy, not just rates — The right lender suits your income, deposit and property goals.

When should you seek pre-approval?

Speak with a broker before you become emotionally invested in a property. A conditional pre-approval clarifies your price range, reveals documentation gaps and helps you move with confidence when the right home appears. Pre-approval is time-limited and subject to final checks including property valuation.