“What size mortgage can I get?” These 4 questions reveal how much you can borrow

About to take the plunge on a home loan? This handy guide helps you prepare an application without destroying your credit score

About to take the plunge on a home loan? This handy guide helps you prepare an application without destroying your credit score

You’re ready to buy your first home or investment property. You’ve worked hard and you’ve saved. But, to turn that dream into reality, you need a loan… and you’re wondering how much you can borrow. You also hear about the General Manager of APRA, Heidi Richards’ statement in 2016: “Mortgage lending at four times gross income is relatively common, at one-third of all new housing loans. Lending at six times or more of gross income is much smaller but still material – nearly 10 per cent.” So, given her statement, you’d expect to borrow around five times your gross income. Unfortunately, it’s not that simple. The nature and type of your income is important, too. As does your credit score and expenses. Fortunately, there are a few little known tips you can use to tilt the odds in your favour.

1. How much is your deposit?

Generally speaking, the bigger the deposit you can put down, the better – especially if the deposit is over 20% of the property’s value. Here’s what you might pay each month on a $500,000 property based on different deposit amounts. The larger your deposit, the lower your repayments for a certain loan size will be. This assumes a 30 year principal and interest loan, repaid monthly, at a 4% interest rate. It doesn’t automatically mean lenders offer you a larger loan. But what most people don’t know is it gives you more power to negotiate a better deal with lenders. It also lowers your the size of your loan and, therefore, reduces your repayment amounts so the loan is easier to pay off.

2. What is your income?

Expecting a raise soon? Many lenders accept a letter from your employer confirming a raise is on the cards. When you’re ready, see for yourself: Start using this incredibly accurate borrowing power calculator to discover how each of these factors can change how much lenders are likely to offer you. Be warned, though: Not all income is treated equally. If you are self-employed, some lenders will see you as higher risk. The same applies for casual or contract work. Bank hopping – bouncing from bank to bank until you’re approved – can hurt your credit history. So speak to a qualified expert who can shortlist lenders that are friendlier to your circumstances before applying. Two incomes are usually better than one. If your partner earns a similar income, it could double your borrowing capacity. But be sure to check your partner’s credit history first. Lenders may see you as a higher risk and reduce the loan amount they’re willing to lend if you or your partner have a poor history. (Bonus tip: Got a job offer from somewhere else? Some lenders accept a letter from your new employer, too).

3. What are your expenses?

It’s time to cut the fat! Yes, go ahead and eliminate expenses where you can because banks take a good, hard look at your credit cards, loans, school fees and other bills. They’ll use this information to assess how much to lend. So add up all your expenses. Good news: If you’re buying a home to live in, you can leave off your current rent as that payment will evaporate. Next, put your expenses, income and ideal purchase price into a mortgage calculator. This gives you a decent thumbnail of where you stand. After that, you can email us at customer.care@uno.com.au. How much can I borrow?Use UNO's calculator to estimate your borrowing capacity. Calculate Now

4. How often should I make home loan repayments?

Determine how much you can borrow before filling out loan applications. As you already know, too much bank-hopping can damage your credit rating and restrict your chances of getting any loan at all. So don’t make that mistake. You can email us at customer.care@uno.com.au. as soon you as can or use a mortgage calculator. As you may know, you can nominate a fixed repayment amount on a weekly, fortnightly or monthly basis. Just as long as it’s higher than the minimum contracted loan repayment, lenders can offer flexibility. Depending on your situation, we usually recommend our clients make more repayments in a year. That’s because it saves you money over the longer term and you pay off your loan sooner. Bonus tip: You should also consider a pre-approval for your loan before purchasing. Most people don’t know, but pre-approvals are fast, easy to get and give you comfort in knowing how much you can afford. Plus, you need a pre-approval loan to bid at auction. Many investors and homeowners make the mistake of doing the groundwork to locate their perfect property, only to miss out when they discover can’t bid on auction day because they didn’t properly organise their paperwork. Book in a quick call with our customer care team.Book a call in with UNO

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What our customers are saying

Chloe S
October 8, 2024
Mike Parsons made it possible for us and the in laws to get 2 pretty complicated home loans. He helped us through everything and we'd be happy to use Mike and the team again for anything we needed. Thanks again!
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Sam Rezai
October 2, 2024
I have gone through 6 different mortgage brokers prior to meeting Andrew Wyers. He is the most patient mortgage broker I’ve encountered and also the most knowledgable about the bank’s lending process and products available. It took me 1 year to find a house I was happy with and Andrew was always there to assist with any issues or questions I had; he always return my phone call, even on the weekends or when his away on holidays. The loan process was smooth and I had no complications. The process with Andrew was again nice and easy, he took the time to find and put together the right package that was suited to my situation. I have recommended Andrew to my family & friends and everyone have been grateful and completely satisfied with his service.
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S Wilko
September 23, 2024
I had not dealt with Scott or UNO before finding them on the internet. Even as an Australian citizen living and working overseas, I knew obtaining a loan would be difficult. However, Scott went above and beyond what I expected from a mortgage broker. I genuinely don’t think you could find another company that works as hard as they did to get my home loan approved. I cannot recommend them highly enough. Everyone I dealt with at UNO were extremely professional and helpful. If you are looking for a broker, you would be mad not to give them a go. Thanks to Scott Wilkinson, Dalby Bajwa, Jena Lasquite and Andrew Pacini. Shaun.
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Shan Liao
September 3, 2024
I had an outstanding experience with Tian Liu. He was incredibly professional and attentive, going above and beyond to meet my needs. His expertise and dedication made the entire process smooth and stress-free. Tian's deep knowledge of the market and commitment to finding the best solutions for his clients truly sets him apart. He was always available to answer my questions and provided invaluable guidance throughout. I highly recommend Tian Liu to anyone in need of a reliable and skilled broker!"
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Nathanael Chin
September 3, 2024
Tian Liu provided exceptional service throughout the entire process. His professionalism and keen attention to detail were evident from the start. Tian consistently kept us informed and offered insightful advice that made us feel confident in our decisions. He truly cares about his clients and works tirelessly to ensure the best possible outcome. We couldn't be happier with his assistance and highly recommend Tian to anyone looking for a trustworthy and knowledgeable broker.
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Patrick Winters
August 14, 2024
For the past three years, it has been an absolute pleasure to work with Mike Parsons. He has consistently helped us navigate commercial property loans with skill and efficiency. Mike’s timely and professional responses to our inquiries have been invaluable. We have built a strong, reliable relationship with him and eagerly anticipate continuing our collaboration in the future. We highly recommend his services.
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Lee Robibaro
August 6, 2024
I am so thankful and grateful to have Scott Wilkinson as my broker. He not only looked after me every step from start to finish he gave me confidence and I was able to trust him and his expertise. My children and I are now happy in our new home and very appreciative of Scott's help. I will definitely be only having Scott as my broker from here onward as there is no mucking around and straightforward answers. Thanks again
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Steve Mav
August 6, 2024
Scott and the whole team at uno have been amazing. Super responsive and helped us achieve a result that we couldn’t have possibly achieved on our own.
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Thien Pham
August 5, 2024
Scott, Dalby and Jena were awesome to work with for my recent Home Loan, they are responsive and knowledgeable - which helped ensure a smooth purchase from pre-approvals to settlement. This is the second property I've purchased with UNO as my mortgage broker and would definitely recommend their services. Thanks again to the UNO Team for the awesome support.
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Scott Hutchinson
August 5, 2024
I am writing this summary in support of recommending Mike Parsons as a Mortgage Broker. At the time of writing this, I have known Mike for 4 years and he has executed 4 mortgages deals for me (including 2 refinances) over that time. Mike has provided me incredible service as a mortgage broker as follows : - Works painstakingly on getting the scenarios together to provide you options that optimize your position. - Works inordinate hours on the detail necessary to support the scenarios. - Mike keeps you updated on the status and progress of the applications and also helps you work through answering questions and any complexities that may arise. -In my cases, given the complexities and timings of my situations , these application processes would take many weeks to finalize . Mike never gave anything other than utter commitment and focus to getting the job done. Mike acts as a true business partner throughout this whole broker /mortgage journey. I simply would only go to Mike for any future dealings on getting a loan from a bank (and as will my kids in the future !) . There is no way a bank (I have seen anyway) would provide this kind of time nor service to a customer. You can rest assured that once Mike has done the deal, you have ended up with the most optimized position taking into account all the variables/scenarios in play. Scott Hutchinson
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Jason Seam
August 5, 2024
I've worked with Scott Wilkinson for my last 2 properties and he's been excellent. He sourced multiple options and didn't push a specific bank, tailoring his recommendations to me based on my requirements. I was specifically requesting a "medico loan" and Scott could navigate that extra requirement with expertise. When I was initially working with Scott, I was also trialling 2 other brokers and neither of those 2 had the same breadth of lenders, or could provide the same deals. I've referred multiple buyers to Scott and his team; one of them said to me after working with him, "how'd you find this guy, he's so good compared to all the other broker's I've worked with!" I'm going into my next purchase with Scott as my broker partner again. I recommend him to everyone
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Tina Anderson
July 29, 2024
My experience with Mortgage Broker - Scott Wilkinson, and his team - exceeded my expectations! I couldn’t be happier after settlement - in this current financial climate. He listened to what my requirements were in a loan and then devised a suitable plan for me moving forward. Which was something I didn’t think was possible to achieve. I strongly believe that Scott’s qualifications and previous experience in the Finance Sector - sets him apart from other Mortgage Brokers as he has more insight into the industry and the needs of the customer. Scott was professional, provided solid options, was timely with communication and gave great advice. I will definitely be using Scott’s services in the future and I highly recommend him to anyone as a Mortgage Broker.
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