If you’re thinking about buying your first home, one of the biggest questions is:
“How do I increase my borrowing power?”
The good news? There are a few simple steps that can make a big difference — sometimes more than you think.
Here’s the easy breakdown.
1. Reduce (or clean up) your existing debts
Banks look closely at what you already owe — even small debts can reduce your borrowing power.
You can increase your borrowing capacity by:
- Paying off credit cards
- Closing unused card limits
- Paying out personal loans
- Clearing buy-now-pay-later accounts (Afterpay, Zip etc.)
- Reducing overdraft limits
Even lowering a credit card limit from $10k to $2k can boost your borrowing power significantly.
Lenders count the limit, not the balance — so limits matter.
2. Clean up your bank statements
Lenders review your recent bank statements to see how you manage money.
You don’t need to be perfect — but tidying things up for a few months helps a lot.
Simple improvements include:
- Avoiding late or missed payments
- Reducing impulse spending
- Cutting unnecessary subscriptions
- Keeping your accounts in the positive
- Showing consistent saving behaviour
A clean 3-month snapshot can improve how lenders view your application.
3. Increase your income (even slightly)
You don’t need a huge pay rise — even small income improvements can help.
Options include:
- Asking for a raise
- Picking up a few extra hours
- Starting a second small income stream
- Combining income with a partner, sibling or friend
- Moving from casual to part-time or full-time
Lenders prefer stable, reliable income.
Combining incomes can especially boost borrowing power for first-home buyers.
4. Reduce your living expenses
Lenders assess your spending to work out how much you can safely afford.
You don’t need to cut back forever — just showing a few months of responsible spending helps.
Ways to reduce expenses:
- Eating out less
- Pausing subscriptions
- Keeping discretionary spending low
- Cutting unnecessary direct debits
You’re not proving that you’re “tight” with money — you’re proving you can manage repayments.
So… what’s the best place to start?
Most first-home buyers boost their borrowing power with a combination of:
- Clearing small debts
- Tidying their bank statements
- Reducing credit limits
- Using first-home schemes
- Getting the right lender who understands their situation
You might be closer to your borrowing goal than you think — sometimes it only takes a few tweaks to move from “not ready” to “approved.”
If you want, we can look at your current income, debts and rent, and show you exactly how much borrowing power you could unlock.
