How Much Can You Borrow? Loan Eligibility Explained
Buying a home is one of the biggest financial decisions for most Australians. Whether you’re a first-time buyer or planning to invest, knowing your borrowing capacity is the first smart step.
At TAZ Mortgage Solutions, we help Canberra residents understand their loan eligibility and secure the right loan for their needs. This guide breaks down the key factors that lenders assess when deciding how much you can borrow—and how to boost your chances.
What Is Borrowing Power?
Borrowing power (or capacity) is the maximum amount a lender will let you borrow. It depends on your financial position, which includes:
- Income
- Living expenses
- Current debts
- Credit history
- Deposit size
Each lender has their own criteria. That’s why working with a trusted Mortgage broker services like TAZ Mortgage Solutions helps you compare your options and find the best fit.
What Affects Your Loan Eligibility?
Knowing the factors that impact your eligibility gives you an edge when applying.
✅ Income and Job Type
A stable job boosts your chances. Salaried employees find it easier to prove income. If you’re self-employed, lenders may ask for extra documents like tax returns and business records.
✅ Monthly Living Costs
Lenders review your day-to-day expenses—like groceries, rent, bills, and childcare—to see how much you can afford to repay. Lower expenses may increase your loan amount.
✅ Existing Debts
Credit card balances, car loans, or personal loans reduce your borrowing capacity. Even unused credit card limits can count against you.
✅ Credit History
A clean credit record shows lenders that you’re responsible. Missed payments or too many loan applications can harm your chances.
✅ Your Deposit
A bigger deposit reduces how much you need to borrow and can help avoid Lender’s Mortgage Insurance (LMI). Some schemes allow you to buy with as little as 5%, but most lenders prefer 20%.
How Lenders Calculate Borrowing Power
Lenders use a debt-to-income ratio (DTI). This compares your total debts—including the new home loan—to your annual income.
If your DTI is too high (often above 6), some banks may see you as high risk. Lenders also add a “buffer” in case interest rates rise, to ensure you could still afford repayments.
Since each bank is different, what one lender rejects, another might accept. TAZ Mortgage Solutions compares real offers for your actual profile—not rough estimates from online tools like a calculator for home loans.
Tips to Boost Your Borrowing Capacity
Want to borrow more? Try these simple strategies:
- Pay off or combine your debts
- Cut back on non-essential spending
- Save for a larger deposit
- Keep your credit record clean
- Consider applying with a partner or guarantor
As experienced home loan brokers in Canberra, we’ll create a personalised plan to help improve your eligibility.
Know Your Limit, Buy Smarter
Understanding your borrowing power keeps your house hunt realistic. You’ll avoid wasting time on homes you can’t afford—and negotiate confidently when you find the right one.
Why Choose TAZ Mortgage Solutions?
As the best mortgage broker in Canberra, we go beyond just numbers. We offer:
- Access to 30+ top lenders
- Honest, expert advice
- End-to-end support from pre-approval to settlement
- Local knowledge of ACT property and lending
Your goal is our priority.
Let’s See How Much You Can Borrow
Curious about your home loan options? Get expert help from the top mortgage agents at TAZ Mortgage Solutions.
📞 Call today or visit us online for a free, no-obligation consultation.
We’ll tell you how much you can borrow—and how to make the most of it.
you can also review our guide “The Ultimate Guide for First Home Buyers in Canberra: Loans, Grants & Smarter Decisions“.