How much you could borrow is calculated from a mix of your income and outgoing expenses, or affordability. We could help find the right deals that work with your financial situation and factor in your credit history - with no extra 'hard' credit checks.
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Still unsure of how much you can borrow? You've tried the borrowing power calculator. Now speak with a loan specialist. At Rapid Finance, our specialists can help you to seek out a home, car or personal loan that matches your situation.
How'd you do on the borrowing power calculator? We could help, even if your situation is a little complicated. So, if you're a first time buyer, if you have bad credit or if you're receiving Centrelink benefits, call us. We'll help you to seek out a finance solution that matches your circumstances.
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Borrowing power is the amount of money a lender (or broker) estimates you can borrow based on your financial situation. It considers your income, expenses, debts, and other financial commitments.
Your borrowing power is calculated using details you provide about your income, such as your salary and any additional earnings, along with your expenses, debts, and credit score. Lenders also consider the number of dependants (children or relatives) and your lifestyle costs to ensure you can comfortably repay the loan.
The amount you can borrow with a home loan varies depending on your personal finances. The Borrowing Power Calculator provides an estimate by analysing your income, expenses, and the details of the loan you're considering, such as the interest rate and term. Use the calculator above to get started.
Calculate your living expenses by adding up all your monthly costs, including groceries, bills, transport, entertainment, and any other regular expenses. It's important to be as accurate as possible to ensure a realistic borrowing estimate.
Calculate your living expenses by adding up all your monthly costs, including groceries, bills, transport, entertainment, and any other regular expenses. It's important to be as accurate as possible to ensure a realistic borrowing estimate.
Yes, if you're applying for a loan with your partner, as a joint home loan, you can include both incomes in the Borrowing Power Calculator to get a more comprehensive view of your borrowing potential.
Yes, certain Centrelink payments such as the Family Tax Benefit can be included as income. However, benefits like Youth Allowance and Newstart are not accepted.
Your credit score is a number, representing your creditworthiness, based on your financial history. It's one of the key factors lenders look at when determining your borrowing power for a home loan. Here's how it affects your borrowing power in more detail:
Interest Rates: A higher credit score usually qualifies you for lower interest rates because you're considered a lower-risk borrower. Lower interest rates can significantly increase your borrowing power, as they reduce the amount you'll need to pay in interest, making more of your income available to repay the principal of the loan.
Loan Terms: Lenders may offer more flexible loan terms if you have a strong credit history. This can include the ability to borrow more money or have a longer period to repay the loan, which can make your regular repayments more manageable.
Loan Approval: A good credit score increases the likelihood of your home loan being approved. Lenders are more confident in your ability to repay the loan, which can also lead to a quicker approval process.
Loan Amount: Lenders generally feel more comfortable lending larger amounts to borrowers with higher credit scores. This means your maximum borrowing limit could be higher if your credit score is strong.
Lender Options: A better credit score opens up a wider range of lenders and loan products. You may have access to loans from traditional banks, credit unions, and other financial institutions that offer more competitive rates and terms.
Insurance Premiums: In some cases, your credit score can even affect the cost of mortgage insurance premiums, with better scores leading to lower premiums.
On the other hand, a lower credit score can have the opposite effect:
Higher Interest Rates: Lenders might charge higher interest rates to balance the risk associated with lending to someone with a history of credit issues.
Limited Borrowing: You may be limited in how much you can borrow, as lenders might see you as a higher risk of defaulting on the loan.
Stricter Loan Terms: You might find loan terms to be stricter, with lenders imposing more conditions on your loan.
Security Requirements: Lenders may require a larger deposit or additional security for the loan.
Improving your credit score can have a significant positive impact on your borrowing power. Paying down existing debt, ensuring all bills and existing loans are paid on time, and avoiding new credit applications can help improve your score over time. If your credit score isn't where you want it to be, consulting with a financial advisor or a company like Rapid Finance can provide you with strategies to improve it before you apply for a home loan.
Existing debts reduce your borrowing capacity, as they are financial commitments that must be met before allocating income to a new loan. Lenders will consider these when assessing your application.
Absolutely. Rapid Finance specialises in helping individuals with bad credit histories. We have over 20 years of experience finding finance solutions for people who may have had difficulties obtaining loans from banks or mainstream lenders. See our bad credit home loans page to learn more or get started.