Your home loan borrowing power is the maximum amount that lenders will let you borrow based on your unique financial situation. Each lender is likely to use a slightly different formula for this, so there isn’t one magic number that tells you how much you can borrow. UNO has a useful calculator, for which we will need to know some basic facts:
- Your regular after tax income;
- What debts you need to keep paying;
- The minimum credit card limit(s) you can live with;
- How many dependents you have.
The following factors are things we keep in mind when working out a loan amount that is comfortable to repay:
- How much you need to live on (and if this will change in the future);
- Other expenses that you must pay, such as child support;
- How much you want to put towards your savings or investment goals;
- The buffer you would like to have if your situation changes.
Your ideal loan amount will not be the most you can borrow from a lender but how much you can comfortably repay into the future.
Use our borrowing power calculator here.