If you looked at your borrowing capacity six or twelve months ago, there’s a good chance the answer today could be different.
And it’s not necessarily because anything dramatic has changed in your life.
Interest rates have moved. Lender policies continue to change. Your income or expenses may be different. You may have paid down debt, built more savings or increased your equity.
All of these things can influence how much you may be able to borrow.
With lending activity also slowing, the number of new dwelling loan commitments fell 5.4% in the June 2026 quarter, we’re seeing a market where many people are taking a little more time to understand their position before making their next move.
So if buying, renovating, refinancing or investing is somewhere on your radar, it might be worth asking:
When did I last check what my options actually are?
What can change your borrowing capacity?
Borrowing capacity isn’t a fixed number.
Every lender has its own credit policies and assessment criteria, and several parts of your financial position can affect the result.
These can include your:
- Income and employment
- Existing home loans and other debts
- Credit card limits
- Personal or car loans
- Household and living expenses
- Number of dependants
- Property portfolio
- Available deposit or equity
- Interest rates
- Loan term
- Lender’s individual servicing policy
Sometimes relatively small changes can make a difference.
For example, you may have received a pay rise since you last checked. A personal loan might now be paid out. Your credit card limit may have changed. Or your existing home loan balance may be lower.
On the other hand, higher expenses or changes in interest rates can work in the opposite direction.
That’s why an old borrowing-capacity figure shouldn’t necessarily be treated as your current position.
The interest rate you see isn’t necessarily the rate you’re assessed at
This is something borrowers don’t always realise.
Banks don’t simply look at the interest rate you’ll pay on a new home loan and assess whether you can afford that repayment.
APRA currently requires the mortgage serviceability buffer to remain at 3 percentage points, meaning regulated lenders generally assess new borrowers at an interest rate above the actual loan rate, subject to their own lending policies.
It’s designed to test whether there is enough room in the household budget if circumstances or rates change.
It also helps explain why an online repayment calculator might suggest one thing, while a lender’s borrowing-capacity assessment produces a different result.
Different lender, different answer
This is one of the biggest reasons we don’t rely on a single generic borrowing calculator.
Two lenders can look at the same client and arrive at different outcomes.
They may treat income differently, apply different expense assumptions, have different policies around overtime, bonuses, rental income or existing debts, or assess certain types of borrowers differently.
It doesn’t automatically mean one lender is “better” than another.
It means finding an appropriate lender involves more than comparing interest rates.
Policy matters too.
And this becomes particularly important for clients whose circumstances aren’t completely straightforward — self-employed borrowers, investors, construction borrowers, people with multiple income sources or anyone with a scenario that doesn’t fit neatly into a box.
What if your borrowing capacity has gone down?
Don’t panic.
Knowing your current position doesn’t mean you have to abandon your plans.
It may simply give you a clearer picture of what needs to happen next.
Perhaps you need a little more deposit. Maybe reducing a credit-card limit or paying out another debt could help. Perhaps your property budget needs adjusting. Or it may simply be a matter of allowing more time.
Sometimes the answer is also not yet — and that’s useful information to have before you’ve found a property and become emotionally invested in buying it.
And what if your position has improved?
This happens too.
You might have:
increased your income • reduced debt • built more savings • increased your equity • changed employment • improved your overall financial position
If it’s been a while since you reviewed your lending options, you may be working from an outdated assumption about what you can or can’t do.
You don’t need to be ready to buy tomorrow
This is probably the most important point.
A borrowing-capacity review doesn’t mean you’re committing to a home loan.
You might be thinking about buying next year.
You might want to renovate.
Perhaps you’re wondering whether an investment property is realistic.
Or maybe you’re simply curious about where you stand.
Getting finance-ready is really about having the information you need to make your next decision.
Not sure where you stand?
At Your Finance Broker, we can review your current position, look at borrowing capacity across suitable lenders and help you understand the options that may be available to you.
Whether your plans are simple, complex or still just an idea, sometimes the best place to start is simply finding out what’s possible.
Get in touch with our team to arrange a finance review.
This information is general in nature and does not take into account your individual objectives, financial situation or needs. Lending criteria, rates and policies vary between lenders and are subject to change.
