Frequently Asked Questions

Most borrowing power calculators on the comparison, bank, and brokerage sites are, unfortunately, really inaccurate. They jack up the borrowing power on purpose so that you think that what you are seeing is the best option so that you go with them. That includes major banks - the marketing team maintains the calculator, and they are quite content to feed you wrong information as long as they "sell you".

At YouBroker, we are starting from a different place. First of all, we have the choice of multiple banks. Therefore, our calculator takes a real average of what over 35 banks will actually approve for you.

We also factor in 'SAR' or Serviceability Assessment Rates. This is the buffer of a minimum of 2.5% that banks and lenders are required to add to the top of the prevailing interest rate (the current rate). This means that your result here will be probably lower than what you see on other sites, but it will be more accurate.

If you have an adequate deposit to cover the purchase you are looking for, you will have a very good chance of borrowing the amount listed in the calculator. To give yourself the best chance, remember to complete the calculator in full and ensure you have filled in each expense, debt repayment, and income type into the calculator.

The calculator is designed to take your total income and consider the types of income. When a bank underwrites your loan, it will look at the amount of the income received and also 'shade' or reduce the level of income it uses for certain types. For example, rental income is reduced by 20%-30% by the back to factor in some contingency. This contingency covers expenses or gaps and variability in income, in a worst case scenario.

Yes it is. A 'SAR' or Serviceability Assessment Rates is a key factor in working out your Borrowing Power. This is the buffer of a minimum of at least 2.5% that banks and lenders are required to add to the top of the prevailing interest rate (the current rate).

Because we factor in the SAR here on the YouBroker calculator, your Borrowing Power result will be probably lower than what you see on other sites, but it will be more accurate.

In order to make a purchase, you should consider your equity or deposit position. You may be able to borrow up to 95% of the property's value, but will need at least 5-12% as a total, in order to factor in stamp duty and at least a 5% down payment. Although grants or concessions may apply, the 5%-12% downpayment range is a good rule of thumb to use.

For example, on a $770,000 purchase, a $92,400 deposit would allow you to make that purchase, and you would need to borrow about $723,800 or 94% of the value of the house.

Additionally, you should consider whether your circumstances will allow you to pay the mortgage in the future. For example, if you are about to go on maternity leave.

Your household expenses will need to be reasonable and accurate for your living situation. For example, if you have a household of 2 adults and 2 children, declared expenses of $2,500 will be unrealistic. As a general rule, expenses should be above $1,800 per adult per month, and $600 per child. So, a 2 adult, 2 child household would be expected to have $4,800 minimum of expenses.

Our online profile helps you automatically populate your expenses based on your actual bank statements, and allows you to review and check the amounts prior to submission to the bank or lender.

Yes you can expect your borrowing power to change based on what banks, lenders, regulators like ASIC and APRA, and the RBA does.

For example, if the RBA (Reserve Bank of Australia) raises the interest rates in Australia, your borrowing power is reduced, due to the SAR rate which is added to the Prevailing Rate.

A 'SAR' or Serviceability Assessment Rates is a key factor in working out your Borrowing Power. This is the buffer of a minimum of at least 2.5% that banks and lenders are required to add to the top of the prevailing interest rate (the current rate).

Because we factor in the SAR here on the YouBroker calculator, your Borrowing Power result will be probably lower than what you see on other sites, but it will be more accurate.

Yes. Enter the debt commitments in the liabilities area.

No. It does not take into account how long your income is in evidence, and your deposit or equity position, which can affect your overall borrowing position, and buying position. The results from this calculator are a general and approximate guide only and do not provide you personal advice. The calculations used should not be relied upon for the purposes of entering into any legal or financial commitments.

Your next step in getting a better handle on your position should be to build a profile at YouBroker, so we can help you further.

In the assessment process, the credit card limit or store limits are fairly important. We will calculate what repayments would need to be factored in if you 'maxed out' the credit cards to their limits. This occurs even if you pay off any balance owing in full each month.

However, if you have higher limits and you don't need them, consider reducing the limits. This will bump up your borrowing power.

As a general rule, reducing your credit card limits by $10,000 could add around $25,000-$32,000 to your borrowing power depending on the lender. Try our calculator and see.

If you can’t borrow as much as you would like then you may be able to take some actions to change what you can qualify for.

You might be able to...

- Reduce or cancel credit cards

- Payout car or personal loans (useful if you have cash at the ready, but harder for a first home buyer).

- Lengthen and reset the terms of your mortgages back to 30 years. If you are over 55, you will need to consider an Exit Plan to pay off all debts at retirement.

- Fix the rate on your current mortgage loans (acceptable to some lenders).

- Select a lender that can include 100% of your overtime, bonus and other income. Many are 80%, however. Overtime from health, police, and fire services occupations can often be accepted at higher levels.

- If your expenses are higher than you'd like, consider trimming some discretionary spending such as dining out, gaming, or drinking. But, remember to not under-declare your expenses, as not only will this be rejected by the bank or lender, you are doing yourself a disservice.

Lastly, seek to increase your income by adding further skills and value to your workplace or moving companies to gain a higher income. Doing this proactively over your career will help you more than trimming expenses or closing credit cards.