How Do I Increase My Borrowing Power?
- namchau
- Jun 3
- 2 min read
If you’re planning to buy a home, one of the most important figures you'll come across is your borrowing power—how much a bank or lender is willing to let you borrow. The good news? There are several practical steps you can take to boost this number and improve your chances of getting into the property market sooner.
1. Reduce or Cancel Credit Cards
Even if you owe nothing on your credit card, banks will still assess your application based on the card’s limit. For example, a card with a $10,000 limit will be treated as if you’re making monthly repayments on that full amount. Reducing your limits or cancelling unused cards can instantly lift your borrowing capacity.
2. Eliminate Buy Now, Pay Later Facilities
BNPL services like Afterpay or Zip Pay might seem harmless, but lenders view them as ongoing liabilities. Even if you use them occasionally, banks will either assess your average monthly spend or treat the entire facility as a line of credit. Closing them down can work in your favour when applying for a home loan.
3. Add a Second Borrower
If you're buying with a partner, spouse, or family member, including a second borrower can increase your total household income—provided they have a strong financial profile with minimal debts or liabilities. This can significantly improve your borrowing power.
4. Leverage Additional Income
Lenders will often consider other sources of income beyond your base salary. This includes:
Overtime
Allowances
BonusesDepending on the consistency and documentation of these earnings, they can make a meaningful difference to your loan approval amount.
5. Improved Income Opportunities
If you're about to start a new job with a higher salary, many lenders will accept your employment contract or first payslip as evidence of the increased income. This means you don’t always have to wait for months to show income history—giving you a head start on house hunting.
Ready to Take the Next Step?
Understanding your borrowing power is just the start. At Ascot Mortgage, we can help you work through strategies tailored to your unique financial position and show you how small changes can make a big difference.
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