Borrowing Power Calculator

 

Do you want to know how much you can borrow? Our borrowing power calculator gives you a potential borrowing amount to help you start your journey.

Borrowing Power Calculator

Getting a good idea of how much you might be able to borrow from a lender can reassure you and put you in a good position. With our borrowing power calculator, you can get an estimate of your borrowing power based on your financial circumstances.

Everybody is different, and your true borrowing power will depend on a number of factors. These include your income, the number of applicants, how many dependents you have, and your expenses, including any existing debt. Use the calculator to help you get started with your journey with a clear picture of the budget that you might have to work with.

When you use our borrowing power calculator, it will use your income and expenses, as well as a couple of other factors, to determine a maximum potential borrowing amount. You will see a suggested amount that you may be able to borrow, as well as repayment calculation and variable interest rate.

The calculator makes some assumptions, which you can read more about in the “about this calculator” tab.

Our borrowing power calculator is easy to use. Start by choosing the number of applicants (one or two) and the number of dependents (children under 18) you have. Tell us your main salary before tax, as well as any additional income that you have. Additional income might come from investments or other channels aside from your primary income.

Next, tell us about your living expenses. Knowing your income only gives us part of the picture, whereas understanding your expenses ensures the calculator can make a more accurate calculation of your borrowing power. Let us know your monthly living expenses, including costs such as rent, groceries, transport costs, bills, and insurance. There’s also space in the calculator for existing loans and credit cards so that your current debt and credit are taken into account.

That’s all you have to do to get a rough figure for how much you may be able to borrow. You can see your maximum amount and how much repayments would be monthly, fortnightly, or weekly. You can adjust the loan term, loan type, interest rate, and repayment type to see what happens when you change the conditions of the loan.

There are multiple factors that make a difference to how much a lender might be willing to lend you.

Some of the things that make a difference to how much you could borrow include:

  • – Number of applicants – whether you are a single applicant or you’re applying with someone else, such as a spouse or partner.
  • – Number of dependents – how many children under the age of 18 you are responsible for.
    Income – this includes both your salary or main source of income and any additional income that you might receive from other sources.
  • – Expenses – the ratio of your expenses to income makes a difference to your borrowing power. If you’re a high earner but also a high spender, you might not have as much borrowing power as you hope.
  • – Debt – the amount of current debt you have and any repayments that you are making are taken into account.
  • – Credit history – your borrowing power might be affected if you don’t have a good credit score, especially if you have missed payments in the past.

The borrowing power calculator is designed to give you a starting point for how much you might be able to borrow from a lender. It doesn’t give you a guarantee that you will be able to borrow the maximum amount given, but it does help you to prepare as you’re looking for the right lender. There’s a lot to think about when you’re looking for a new home or you want to borrow money for any other reason. You can begin the process feeling very unsure, especially about what you’re able to afford.

Using the borrowing calculator will give you an idea of how much lenders might be willing to allow you to borrow. You should also do your own calculations and budgeting to give yourself a bigger picture of what you feel you can comfortably afford to borrow and repay.

Consider your income and current expenses to understand how much you can afford to repay. If you think that your expenses are going to change, for example, if you’re planning to buy a home, you should take this into account too. It’s important to consider not just your affordability now but also whether things could change in the future. Would you still be able to afford your repayments if interest rates increase? What if your other living expenses increase or your income decreases?

Remember to check for any fees and charges that might come with a mortgage or personal loan. They should be taken into account when you’re working out how much you can afford. Other costs are also important to include in your calculations. For example, if you’re buying a car, you should think about the ongoing running costs. If you’re looking for a mortgage, you should use a stamp duty calculator to check how much you need to pay, as well as include other costs that come with buying a property.

Remember that the borrowing power calculator doesn’t give you an exact figure for how much you can borrow. You’ll be able to get a better idea once you find a lender and loan that suits your needs.

After calculating an amount for how much you can potentially borrow, you can take the next step. Before you go any further, you might want to do some research into what you could get for the sum the calculator has given you. It’s useful to know how far your budget will get you and if your expectations and wishes line up with what you might be able to borrow.

You can also start to take a look at some of the deals that might be available to you from lenders. The easiest way to do this is to use a broker to get access to a range of deals from different lenders and to receive advice on what you should choose. You can get started with us online or give us a call for a friendly chat about your circumstances.

What is borrowing power?

Borrowing power or borrowing capacity are terms used to express the amount lenders might be willing to let you borrow. This figure is based on your financial situation, including your income and expenses. What you are able to borrow will vary depending on the lender, but you can get a rough idea of what you might be able to borrow using our calculator.

What affects my borrowing power?

Your borrowing power can be affected by a range of factors. Your income and expenses both influence how much you can borrow. Your general living expenses and any debts that you have, such as personal loan repayments and credit card limits, are considered.

It also makes a difference if you want to borrow with someone else or if you have dependents (children). If borrowing with someone else, you could have more borrowing power but you could also have more debt and both of your credit histories will need to be considered. If you have children, you will have associated costs and a financial commitment that lasts a lifetime.

Can I increase my borrowing power?

Your borrowing power isn’t necessarily set in stone. You do have the power to increase it in several ways. You could do this by increasing your income, lowering your expenses, or improving your credit score. Different lenders can also offer you different amounts to borrow, so you might find you have more borrowing power with some compared to others.

What do the different interest types mean?

When you want a home loan, you can choose between interest-only or principal and interest repayment. If you choose an interest-only mortgage, you only pay off the interest that is accrued on the loan. With a principal and interest loan, you repay the amount that you have borrowed, plus the interest.

How do the loan terms affect borrowing power?

If you adjust the loan terms using our calculator, you can see that they can affect the amount you might be able to borrow. The loan type, loan term, and interest rate, as well as whether you choose an interest-only or principal and interest loan, can all make a difference. You might be able to borrow more by increasing the loan term, for example.

How does my salary influence my borrowing power?

Salary is one of the most important factors for calculating borrowing power. You might want to know if there is a guide for how many times your salary you might be able to borrow. However, the truth is that there is no set rule that dictates how much you can borrow based on your salary. It’s true that you can generally borrow more if you earn more, but the amount you can borrow is influenced by various other factors too.

Borrowing Power Calculator

Our borrowing power calculator helps our customers know just how much they are able to borrow from a lender. The amount you can borrow will be determined by an individual’s financial situation. This is made up of one’s income, financial commitments, credit history, and current savings. Any current spending habits and any current financial commitments like a car loan or credit card debt, will also influence one’s borrowing power.

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