The amount you can borrow is primarily dependent upon your income and existing debts (including loans and credit cards). A number of other factors including assets and equity in those assets can also assist in increasing your borrowing power. Each Lender has its own way of calculating and assessing your borrowing power which as a result can impact the bank you decide to choose. It is also important to note that there is a difference between what a bank is willing to lend you and what you can afford in terms of a loan. The best way to calculate what size loan you can afford is by creating a detailed budget and making sure you have sufficient funds to cover the loan at both current rates and if rates go up 3%. But not everyone works with budgets so there are other ways to work this out. To get a rough idea of what you can afford we have some useful calculators online or check out our video on working out “how much you can borrow”. Even better give us a call and let us help you.
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