How much could you borrow?

Your borrowing capacity is the amount a lender is prepared to lend you, based on its assessment of your ability to repay. Knowing it early helps you search in the right price range and avoids disappointment once you have found a property.

What lenders take into account

• Income: your salary or business income, and how regular it is. Overtime, bonuses and rental income are often counted only in part.
• Living expenses: what you spend each month, compared with the lender's own benchmarks.
• Existing debts: home, car and personal loans, buy now pay later accounts and credit card limits, whether or not the cards are used.
• Dependants: the number of people who rely on your income.
• Deposit: how much you have saved, and how you saved it.
• The lender's criteria: each lender applies its own policies and tests repayments at a higher interest rate than the one you would actually pay.

Why an estimate is only a starting point

Online estimates, including our borrowing power calculator, are indicative. They are not a formal lending decision, a pre-approval or an offer of credit. Because lenders assess the same borrower differently, the amount available to you can vary from one lender to the next.

It is also worth separating what you can borrow from what you would be comfortable repaying. A broker can help you look at both, and explain what you could do to improve your position before you apply.