Boost your Borrowing Power
- Karenza Hill
- Dec 8
- 3 min read
Thinking about buying your next property? Whether you already own a home or have an investment portfolio, your borrowing power plays a crucial role in securing the right loan. Lenders are more cautious than ever, and understanding how to position yourself for success can make all the difference. Here are six practical strategies to help you boost your borrowing power and improve your chances of home loan approval.
1. Review Your Credit Health
Your credit score is one of the first things lenders check. It reflects your financial reliability and repayment history. A strong score can open doors to better loan terms.
Action Steps:
Pay bills and loan repayments on time.
Reduce credit card limits, not just balances.
Avoid multiple credit applications in a short period.
Pro Tip: Check your credit report annually for errors.
2. Reduce Existing Debts
High personal loans or credit card balances can shrink your borrowing capacity. Lenders calculate your debt-to-income ratio, so less debt means more room for a mortgage.
Action Steps:
Pay down high-interest debts first.
Consider debt consolidation for easier management.
Avoid new debt before applying for a loan.
Pro Tip: Even reducing monthly obligations by $200 can increase your borrowing power significantly.
3. Increase Your Savings Buffer
A healthy savings history signals financial discipline. Lenders often look for “genuine savings”—funds accumulated over time.
Action Steps:
Automate transfers to a dedicated savings account.
Save at least 5–10% of your income regularly.
Keep savings separate from everyday spending.
Pro Tip: Consistent saving can also help you negotiate better loan terms.
4. Consider Your Employment Stability
Stable employment reassures lenders about your ability to repay.
Action Steps:
Avoid job changes close to your loan application.
Self-employed? Keep tax returns and financials up-to-date.
Minimise employment gaps.
Pro Tip: Casual or contract workers may need extra documentation to prove income stability.
5. Explore Alternative Loan Structures
Offset accounts, split loans, and flexible repayment options can improve affordability.
Action Steps:
Compare features beyond interest rates.
Consider split loans for balance between fixed and variable rates.
Use offset accounts to reduce interest while keeping funds accessible.
Pro Tip: A mortgage broker can help tailor these options to your goals.
6. Get Professional Advice
Every lender has different criteria. A mortgage broker can guide you through the process and often access exclusive deals.
Action Steps:
Book a consultation to review your financial position.
Request a borrowing power estimate before house hunting.
Regularly review your mortgage options post-approval.
Pro Tip: Brokers negotiate on your behalf, saving you time and money.
Boosting your borrowing power is all about preparation.
By improving your credit health, reducing debts, and
seeking expert advice, you’ll be in a stronger position
to secure your dream home.
Ready to find out how much you can borrow?
Contact us for a no obligation free borrowing capacity assessment
to see how far you are away from your goal.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Comments