In Australia, the amount of money you can borrow for a home loan depends on several factors, including your income, expenses, credit history, employment status, and the lender’s lending criteria.
To determine how much money you can borrow, lenders in Australia typically use a calculation called the “borrowing power” or “serviceability” assessment. This assessment takes into account your income and expenses, as well as any existing debts or financial commitments you have, to determine the maximum amount you can afford to borrow and repay.
As a general rule, lenders in Australia will usually lend up to 80% of the value of the property, meaning you will need to have a deposit of at least 20% of the purchase price. However, some lenders may offer higher loan-to-value ratios (LVRs).
It’s important to keep in mind that just because you can borrow a certain amount doesn’t mean you should. You should only borrow what you can comfortably afford to repay, taking into account your income, expenses, and any potential changes to your financial circumstances in the future.
Borrowing capacity will also vary from lender to lender. If you require more information, First Choice is one of Australia’s best mortgage brokers so get in contact today, we will give you a complete individual assessment when we discuss your options.