House prices vary considerably in Australia depending on where you want to buy. Before applying for a loan it helps to know your borrowing capacity and how much can you afford to repay.
Working out your borrowing capacity helps you target your property search and understand what financial commitment is involved with your future property purchase. Your budget isn’t only based on what you can borrow. You also need to think about your ability to repay the loan so you can be comfortable with the repayments.
Planning is the key to success
Know your capacity
Your borrowing power is typically based on a number of factors, such as your income, financial commitments, credit history, savings, employment history and assets. Check out our simple borrowing capacity calculator for a rough estimate of your borrowing capacity.
Track your expenses
Tracking your expenses will help you see what you’re spending, where you can save and what you could afford to repay. A history of regular savings in your bank account and a good track record of employment will make it easier for you to get a loan. Check out our simple budget planner calculator.
Apply for pre-approval
With pre-approval in place you can be more confident that you are ready to buy armed with knowledge of your purchase limit. Having loan pre-approval is especially handy at an auction or when looking to secure a sought after property. Loans are usually pre approved for 90 days.