When it comes to buying a home, refinancing, or investing in property, your borrowing power can significantly shape your options. The good news? There are practical steps you can take to help improve it.
At Happy Vic Lending Solutions, we understand that every buyer’s financial position is different—and we’re here to help you maximise your borrowing capacity. Here are eight ways to potentially boost your borrowing power.
Check Your Credit Score
Lenders assess your income to determine your repayment ability. If a salary increase isn’t an option, consider taking on extra hours, a side hustle, or including alternative income streams in your application.
At Happy Vic Lending Solutions, we help you factor in all eligible income types—such as rental income, Centrelink payments, or child support—so your full financial picture is considered.
Boost Your Income
Lenders assess your income to determine your repayment ability. If a salary increase isn’t an option, consider taking on extra hours, a side hustle, or including alternative income streams in your application.
At Happy Vic Lending Solutions, we help you factor in all eligible income types—such as rental income, Centrelink payments, or child support—so your full financial picture is considered.
Cut Down on Your Expenses
Every dollar counts when lenders calculate your borrowing power. Reducing day-to-day living costs—like subscriptions, utilities, childcare, and dining out—can help improve your financial profile.
Consider tracking your spending for a month to identify areas where you could save. Even small changes can add up and make a difference to your loan assessment.
Pay Down Existing Debts
Your debt-to-income ratio (DTI) is a key factor lenders use. The lower your DTI, the better your borrowing power.
DTI is calculated by dividing your total debts (including credit cards, car loans, HECS/HELP) by your gross annual income. Reducing or consolidating your debts, or even lowering your credit card limits, can help improve your DTI and strengthen your application.
Lower or Cancel Unused Credit Cards
Lenders assess credit cards based on their limits—not your actual balances. For example, two cards with a $10,000 and $5,000 limit will be treated as $15,000 in debt, even if you rarely use them.
Closing unused accounts or lowering your limits can reduce your perceived liabilities and improve your borrowing capacity.
Save a Larger Deposit
A bigger deposit can reduce your loan-to-value ratio (LVR) and help you avoid paying Lenders Mortgage Insurance (LMI). Most lenders prefer an LVR of 80% or less—and may offer better rates for lower LVRs.
A strong savings history also demonstrates financial discipline, which lenders view positively. If you already own property, using your equity or having a guarantor (such as a parent) could also improve your position.
Extend Your Loan Term
Choosing a longer loan term reduces your monthly repayments, which can help increase your borrowing power—since lenders assess affordability based on your ability to meet repayments.
Just keep in mind, a longer loan term means more interest paid over time. Use our home loan repayment calculator to explore your options and see what suits your budget best.
Select the Right Home Loan Product
Not all loans are assessed the same way. Some lenders (especially non-bank lenders) are more flexible when it comes to credit history, employment type, or proof of income.
At Happy Vic Lending Solutions, we match you with loan products tailored to your financial profile. Whether you’re self-employed, have a complex income structure, or a lower credit score—we’ll help find a lender who understands your needs.
