How to increase borrowing power: 13 practical steps

You may be able to borrow more by reducing debt, showing income the lender has missed, or choosing a bank that assesses your circumstances differently. I’d check what is limiting the application before asking you to save a bigger deposit or cut the family budget again.

Your borrowing capacity is the loan a lender is prepared to approve. Your buying budget also includes your deposit, purchase costs and the repayments you can live with.

As at 15 October 2026, the RBA cash rate is 4.60%. The latest increase was announced on 29 September and took effect on 30 September. Rates fell during 2025 and rose again in 2026, so an estimate from an earlier application may no longer fit.

The cash rate is different from your home loan rate. Banks generally test repayments at least 3% above the actual loan rate. A loan at 6.50%, for example, would usually be tested at 9.50% or more. Other assessment rules or a minimum assessment rate may also apply.

You may still be able to borrow more than 6 times your yearly income. The bank needs to be comfortable with your repayments and have room under its lending limits.

Debt-to-income ratio, or DTI, compares what you owe with what you earn before tax. If your total debts are $900k and your yearly income is $150k, your DTI is 6.

Banks can lend to borrowers at that level or above, but this can make up no more than 20% of their new lending. They have separate limits for people buying a home to live in and for investors.

If one bank will not lend enough, we can check whether another has room to help. We still need to make sure you can afford the repayments. Having debt below 6 times your income does not guarantee approval.

Try setting aside the difference between your current housing costs and the proposed repayment. Keep doing it through a normal pay cycle, including the weeks when annual bills arrive.

Say you pay $500 a week in rent, save $100 and can sustainably free up another $50. That gives you $650 a week to test, or about $2,817 a month. You then need to allow for rates, insurance, maintenance and any body corporate fees that come with owning the property.

Leave room for unexpected costs and changes such as parental leave. A bank’s maximum loan is useful information, but I would not use it as your shopping budget until we have checked the repayments. Our hidden buying costs guide helps with the cash you need before settlement.

Get your credit reports and check for incorrect accounts, missed-payment records and enquiries you do not recognise. You can request a free report every 3 months. Correct errors before lodging a home loan application.

Pay existing commitments on time and avoid applying for several loans just to see who says yes. A credit score is only one part of the decision. There is no single score that guarantees approval across Australian lenders.

You do not need to take out a credit card simply to build a borrowing history. We also look at your income, savings, debts and repayment record. A change in score does not translate into a fixed dollar increase in your loan.

A pay rise helps once the lender accepts the evidence. Overtime, bonuses, allowances, a second job and self-employed income can need a different approach. Banks do not all count the same amount or ask for the same history.

Send us your recent payslips and details of any income that varies. If you run a business, we will explain which financial records the suitable lenders need. Starting a side job shortly before applying does not mean all of that income will count straight away.

Our income and employment guides cover these situations. We can compare lenders using the income you actually receive before you change jobs or take on extra work.

Cutting unused subscriptions or finding a better insurance price can help your cash flow. Whether it increases the loan depends on how the lender assesses those costs. If it already uses a higher HEM benchmark, cutting groceries further may leave the borrowing calculation unchanged.

Unused card limits can matter even when you pay the balance off every month. Ask us to compare lowering a limit, paying out a car loan or keeping the money for your deposit. Do the calculation before using up savings.

The same applies to HECS or HELP debt. Paying it off can change the assessment, but you also need enough cash left to complete the purchase.

Already share a mortgage but want to buy on your own? Our common debt reducer guide explains why a lender might count the whole repayment and what we check before asking it to use your share.

You can owe nothing on a credit card and still have it reduce your home loan limit. The bank allows for the debt you could run up, so paying the balance off each month does not remove the available limit.

A $10k limit can reduce borrowing capacity by around $40k to $50k in a calculation like this. For example, Macquarie assesses a monthly commitment of 3.8% of the card limit. On $10k, that is $380 a month.

That is why I would check unused card limits before asking you to cut more from your budget. If you still need a card, a lower limit may help. Clearing the balance and closing the facility are different things.

The $45k is a worked estimate, not a guaranteed increase if you close a card. It assumes this commitment is limiting the loan and everything else stays the same. Your lender, assessment rate, loan term and other limits can change the result.

Our how much home can I afford guide covers the wider budget. For the paperwork, see which bank statements lenders need. We can compare lowering the card limit with keeping access to funds you need.

Macquarie may consider excluding fees where savings cover the remaining school years, or where the application includes extra borrowing specifically to pay the fees. Teachers Mutual Bank Group has assessed fees within overall living expenses in client cases we have worked on.

Sarah and James wanted to buy a $1m investment property. Regular banks would lend them around $600k. When I compared UniBank, it was around $1m. Their settled structure used a $200k equity release and an $800k investment loan. The school-fee treatment was part of the result, alongside their full finances. Our school-fees guide explains the case and the conditions. The fees still have to be paid, and any new loan needs to be affordable and approved.

Children affect the living costs a bank allows for. If you share care, the time they spend with you and any child support you pay both matter. Having 3 children in 50/50 care doesn't automatically mean you can declare 1.5 dependants.

How those costs are counted can make a real difference. ING and Macquarie have both looked at shared care case by case. I check which lender suits your situation before relying on the numbers.

Here's how much one bank's estimate changed for the same family as the number of children changed. The figures are rounded.

In this comparison, the estimate with 1 dependant was about $77k higher than with 3. The change from 3 to 2 was about $35k. There isn't a fixed dollar reduction for each child.

These were early estimates, not loan approvals. They show why it's worth checking how a bank counts your children. They don't mean you can list fewer children than you have.

Send us the children's ages, nights in your care, current child-support amount and any costs you pay separately. Our child support and shared-care guide explains the details. If you're working out whether you can keep the home after a separation, start with the buyout and mortgage steps.

A larger deposit reduces the loan you need for the same property. It can also lower your loan-to-value ratio, or LVR, which may improve rates or reduce lenders mortgage insurance costs.

On an $800k property valued at the purchase price, a $160k deposit leaves a $640k loan and an 80% LVR, before buying costs. A $100k deposit leaves a $700k loan and an 87.5% LVR. Neither calculation tells us whether your income can support the repayments.

Equity in an existing property can help fund a deposit, but borrowing against it creates another commitment. We include that debt in the overall assessment. See our deposit-saving guide for a practical savings plan.

A longer term usually lowers the required monthly repayment. That may help the lender’s calculation, but it also means paying interest for longer. Your age, retirement plans and the lender’s rules affect which term is available.

These figures assume principal and interest repayments, an unchanged rate and no fees or extra repayments. The longer term reduces the monthly amount, but the extra interest is substantial. Refinancing later or paying extra can help if your circumstances allow. Neither is something to rely on to make an unaffordable loan work.

Ask us to compare the repayment, assessment rate, fees, offset access and flexibility of each suitable loan. A cheaper advertised rate can help, but the lender still needs to accept your income and property.

A fixed rate can make repayments more predictable during the fixed period. Check the rate after that period and the limits on extra repayments. Variable and fixed loans can be assessed differently, so we check both.

Interest-only repayments are lower initially because you are not paying down the balance. The lender may assess the debt over the shorter principal and interest period left afterwards. That can reduce borrowing capacity. Choose interest-only for a suitable borrowing purpose after comparing the full cost.

Buying with a partner can bring another income and deposit into the application. Their debts and expenses also count. Each co-borrower is usually responsible for the full loan, so agree on the repayments, ownership and what happens if your plans change.

A family guarantor can help with security or a deposit shortfall. A security guarantee generally does not solve a shortfall in your ability to repay. The guarantor’s property is also at risk if things go wrong.

For a purchase with parents, friends or other family, get legal advice on ownership and an exit plan before committing. Our buying with parents guide explains the structures worth discussing.

An online calculator is a starting point. It cannot tell you which lender will accept a bonus, how school fees will be counted or whether a particular apartment is acceptable. We need those details to estimate your loan properly.

Here is what different assumed rates mean for a $600k loan over 30 years. The last 2 columns show the repayment at a rate 3% higher, similar to a bank's assessment rate. It helps explain why the bank’s calculation can look tighter than your household budget.

These are chosen rate scenarios, not current loan offers or borrowing-capacity quotes. They exclude fees and assume a constant rate. A lender also applies its income, expense and debt rules. Use our mortgage calculator for repayments, then ask us to check the loan options.

The Australian Government 5% Deposit Scheme lets eligible buyers purchase with a minimum 5% deposit without lenders mortgage insurance. It now has no income caps and unlimited places. Eligible single parents and legal guardians may qualify with a minimum 2% deposit.

Property price caps and other eligibility rules still apply. The separate Regional First Home Buyer Guarantee closed to new guarantees from 1 October 2025. Regional buyers can check eligibility under the expanded scheme.

Check the postcode and eligible property value before signing. The government guarantee protects the lender. You still repay the full loan. A 5% deposit still means borrowing about 95% of the price, before any other costs. You need income that supports that debt.

Our 5% Deposit Scheme guide covers eligibility and the other locations. Also check Queensland first-home grants, stamp duty concessions and the First Home Super Saver scheme. These can help with upfront funds. They do not replace a loan assessment.

A fully assessed pre-approval can give you a clearer search budget. Ask which documents have been checked, when it expires and what still needs approval.

Do not assume pre-approval locks your interest rate, assessment rate or borrowing amount. A change in rates, income, debts, policy or the property can trigger another assessment. Any protection depends on the lender’s written terms.

Before making an offer, ask us to check that the approval still fits your circumstances and the property. Read our pre-approval guide and what to do if a loan is declined after pre-approval.

If the homes you want are above your budget, compare nearby suburbs, smaller homes and different property types using recent comparable sales. I would use current sales for the actual home type, rather than an old suburb median.

For example, buyers looking around Ashgrove may also research Mitchelton. Compare transport, school access, condition and recent sales before assuming one property is better value. Our property research guide explains the checks, and we can help with a property report.

An apartment can have a lower purchase price and still come with substantial body corporate fees. Lenders can also have different rules for small apartments, unusual properties and certain postcodes. Give us the address and ongoing costs before making an unconditional commitment.

Send us the purchase price you have in mind, your deposit, income, debts and household costs. We can identify what is holding the application back and compare suitable lenders we can arrange.

I would want you to leave that conversation knowing the likely loan range, the repayments and what would need to change. Sometimes a different lender helps. Sometimes paying down a debt or buying at a lower price is the better decision.

Our Brisbane mortgage broker team can help with the finance. Your solicitor or conveyancer handles the contract and legal checks. The home-buying team guide explains who does what.

How are we paid? We generally receive commission from the lender when your loan settles and while it remains open. We explain any fees and commissions before you proceed.

Client examples are based on real situations. Names and identifying details have been changed.