“What size mortgage can I get?” These 4 questions reveal how much you can borrow

About to take the plunge on a home loan? This handy guide helps you prepare an application without destroying your credit score

About to take the plunge on a home loan? This handy guide helps you prepare an application without destroying your credit score

You’re ready to buy your first home or investment property. You’ve worked hard and you’ve saved. But, to turn that dream into reality, you need a loan… and you’re wondering how much you can borrow. You also hear about the General Manager of APRA, Heidi Richards’ statement in 2016: “Mortgage lending at four times gross income is relatively common, at one-third of all new housing loans. Lending at six times or more of gross income is much smaller but still material – nearly 10 per cent.” So, given her statement, you’d expect to borrow around five times your gross income. Unfortunately, it’s not that simple. The nature and type of your income is important, too. As does your credit score and expenses. Fortunately, there are a few little known tips you can use to tilt the odds in your favour.

1. How much is your deposit?

Generally speaking, the bigger the deposit you can put down, the better – especially if the deposit is over 20% of the property’s value. Here’s what you might pay each month on a $500,000 property based on different deposit amounts. The larger your deposit, the lower your repayments for a certain loan size will be. This assumes a 30 year principal and interest loan, repaid monthly, at a 4% interest rate. It doesn’t automatically mean lenders offer you a larger loan. But what most people don’t know is it gives you more power to negotiate a better deal with lenders. It also lowers your the size of your loan and, therefore, reduces your repayment amounts so the loan is easier to pay off.

2. What is your income?

Expecting a raise soon? Many lenders accept a letter from your employer confirming a raise is on the cards. When you’re ready, see for yourself: Start using this incredibly accurate borrowing power calculator to discover how each of these factors can change how much lenders are likely to offer you. Be warned, though: Not all income is treated equally. If you are self-employed, some lenders will see you as higher risk. The same applies for casual or contract work. Bank hopping – bouncing from bank to bank until you’re approved – can hurt your credit history. So speak to a qualified expert who can shortlist lenders that are friendlier to your circumstances before applying. Two incomes are usually better than one. If your partner earns a similar income, it could double your borrowing capacity. But be sure to check your partner’s credit history first. Lenders may see you as a higher risk and reduce the loan amount they’re willing to lend if you or your partner have a poor history. (Bonus tip: Got a job offer from somewhere else? Some lenders accept a letter from your new employer, too).

3. What are your expenses?

It’s time to cut the fat! Yes, go ahead and eliminate expenses where you can because banks take a good, hard look at your credit cards, loans, school fees and other bills. They’ll use this information to assess how much to lend. So add up all your expenses. Good news: If you’re buying a home to live in, you can leave off your current rent as that payment will evaporate. Next, put your expenses, income and ideal purchase price into a mortgage calculator. This gives you a decent thumbnail of where you stand. After that, you can email us at customer.care@uno.com.au. How much can I borrow?Use UNO's calculator to estimate your borrowing capacity. Calculate Now

4. How often should I make home loan repayments?

Determine how much you can borrow before filling out loan applications. As you already know, too much bank-hopping can damage your credit rating and restrict your chances of getting any loan at all. So don’t make that mistake. You can email us at customer.care@uno.com.au. as soon you as can or use a mortgage calculator. As you may know, you can nominate a fixed repayment amount on a weekly, fortnightly or monthly basis. Just as long as it’s higher than the minimum contracted loan repayment, lenders can offer flexibility. Depending on your situation, we usually recommend our clients make more repayments in a year. That’s because it saves you money over the longer term and you pay off your loan sooner. Bonus tip: You should also consider a pre-approval for your loan before purchasing. Most people don’t know, but pre-approvals are fast, easy to get and give you comfort in knowing how much you can afford. Plus, you need a pre-approval loan to bid at auction. Many investors and homeowners make the mistake of doing the groundwork to locate their perfect property, only to miss out when they discover can’t bid on auction day because they didn’t properly organise their paperwork. Book in a quick call with our customer care team.Book a call in with UNO

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What our customers are saying

Sally Mackenzie
February 19, 2024
We chose Uno Home Loans from their impressive web site knowing we were going to find it hard, on many fronts, to qualify for a home loan. We were incredibly fortunate to be assigned Mike Parsons as right from the get-go, despite the complexities, he hit the ground running for us. He was incredibly knowledgeable, with years of experience but what was immediately apparent and impressive was that he was totally invested in getting us over the line, doing absolutely everything possible, including working around the clock. Despite it being a relatively small loan in the order of things, Mike never missed a beat, getting docs ready, following up and answering every request from the proposed funder immediately. He kept us informed on progress the minute anything happened, and again if anything needed to be done, he was right on it. In short, we highly recommend Uno, and Mike, knowing what a remarkable job he did, over many weeks, to get us our loan. He got us a great deal, with far better rates than we expected, so we couldn't be happier. In fact, without doubt, you'd be hard pressed to find a more personable, sharp, hard working, dedicated professional who clearly prides himself on getting his customers standout results.
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February 13, 2024
Scott and his team were just A-mazing. We felt supported through the whole process with the greatest quality and care. Every question answered right in time, or even before we asked. The process was smooth and we got the best outcomes we could have wished for.
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Angela Biddle
February 6, 2024
Our mortgage recently came up for renewal, and with interest rates skyrocketing we were looking for ways to minimise the impact. Michael and his team were proactive and attentive. Michael spent time with us to understand our circumstances. He found mortgage options that worked with our current financial situation and longer investment plans. He presented clear options, providing guidance where needed. He and his team were helpful and responsive - streamlining the process and keeping us updated through the negotiations. In the end, Uno did the heavy lifting and secured a significantly better rate than our current bank offered, all with friendly, personal service. We would highly recommend UNO Home Loans.
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Fotis Bikas
January 15, 2024
I cannot help but congratulate Scott Wilkinson of UNO Home Loans for being an absolute credit to both his company and the entire loans industry. Scott is a truly rare gem of a broker in that he will not only go the extra mile to achieve for each customer the very best deal, but his knowledge of all and sundry within the industry is unsurpassed (you will see what I mean if you speak to him). Additionally, Scott has a clear passion for imparting his wealth of information with each customer, whereas the conversation with most other brokers would simply be over if they could not get you the best deal. For me, Scott Wilkinson of UNO Home Loans stands head and shoulders above the competition and I feel privileged to benefit both from his expertise and professionalism whenever it is time for a refinance or new loan.
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Tomoharu Matsui
January 11, 2024
Michael Parsons helped me a lot when it's difficult to establish my capabilities in loan.
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Gillian Kearon
January 9, 2024
I highly recommend Mike Parsons as a mortgage broker. I couldn't fault the service provided by UNO. Thanks Mike!
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Taner T
December 20, 2023
Thank you Eren Tan for the amazing service and support. Our Loan was a little tricky and complex for other lenders but Eren managed to get it over the line in record time. His professionalism and dedication to our needs was exceptional. If you need a Loan no matter how complex your situation, make sure you contact Eren at UNO Home Loans.
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Karaipu Brown
December 20, 2023
Buying & selling a house at the same time is very stressful but Scott Wilkinson from UNO home loans made sure we knew what was happening & took most of the stress away. He always kept us up to date and if we had a concern or wanted clarification on something we were able to call him, if he didn’t know the answer straight away he will find out and contact us back.. now we are enjoying our new house and turning it into a home :)
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Chris Anderson
December 18, 2023
Just completed my first loan with UNO which was so much easier than with other other brokers I have used in the past. Our broker MIKE PARSONS always had time for me and broke things down for me in the simplest of terms and was very patient with my silly questions and my constant changing of plans. I wish I had used them in the past as I wouldn't be in the situation I'm in now. Can't recommend them highly enough. Thanks UNO and Thanks MIKE 😊
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Stephen Broomfield
December 11, 2023
To be able to recommend Scott Wilkinson for your mortgage broker was a privilege. We had deals fall through but Scott supported, guided and stuck with us, proper partnership. The whole team at UNO helped us and supported us right through to after settlement. Made sure everything was correct and how we are progressing. Communication was amazing and straightforward and easy to understand. Transparent. We can not Recommend Scott and the team as Uno high enough. Use UNO with confidence.
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Tarek Hussain
December 6, 2023
Can't thank Amy enough for her hard work, dedication and determination on getting multiple loans completed for me. I wouldn't hesitate in recommending Amy and the Uno team to any of my associates. Will definitely be back in the near future!
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November 3, 2023
If you’re looking for a trustworthy, thorough, reliable & knowledgeable Mortgage Broker then you must call Anita Callaghan! I can’t even imagine how stressful this process would’ve been without her. Anita went above and beyond to make sure she answered every question, responded to every text (even on weekends/after hours), and followed up on every detail to ensure we had all the info we needed. Anita is a true people person who is warm, empathetic, kind and supportive. You can tell she loves helping people and loves what she does, which is probably why she’s so good at it! Can’t thank you enough Anita, or recommend you more highly! You’re the best!
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