How to improve your borrowing power

Before you start shopping for your dream home, it’s smart to know exactly how much you can borrow. Your borrowing capacity—how much a bank is willing to lend you—is one of the first steps in your home buying journey.

Every bank has its own set of lending guidelines, designed to ensure you don’t borrow more than you can realistically repay. But there are ways to improve your borrowing power before you even apply for a loan.

Here’s what you need to know...

1. Reduce credit card limits

Even if your balance is $0, your credit limit can still affect your borrowing capacity. That’s because lenders assume you could max out the card and factor in potential repayments.

If you want to borrow more, consider reducing your card limits (or closing cards you no longer use). Lower limits = higher borrowing potential.

2. Include all incomes

Lenders will usually accept a variety of income types, not just your salary. This may include:

Rental income
Government benefits
Dividends or annuities
Bonuses or commissions
Child maintenance
Second jobs

Make sure to disclose everything—your total income might be higher than you think!

3. Use a mortgage broker

Going straight to your bank might seem easy, but each lender calculates borrowing capacity differently. A mortgage broker can compare a wide range of lenders to help you find one that suits your income, goals, and circumstances.

Plus, working with a broker can help avoid multiple loan applications (which can hurt your credit score).

4. Pay or consolidate debts

Credit cards, personal loans, car finance… all these commitments reduce what you can borrow.

Simplii Finance has helped many of our clients increase their borrowing capacity by consolidating multiple debts into a single loan with a lower interest rate.

This can reduce your monthly repayments and improve your cash flow—making you more attractive to lenders.

Learn about debt consolidation

5. Maintain good credit

When you apply for a home loan, lenders check your credit report to see how reliable you are with money.

A good credit history—with no missed payments, defaults, or overdue bills—can boost your borrowing power and increase your chances of approval.

Learn how to improve your credit report

6. Consider joint applications

Struggling to meet income requirements alone? You might consider buying jointly with a partner, family member or friend. This strategy combines incomes and can boost your borrowing capacity significantly—especially helpful in today’s property market.

Learn more about co-homeownership

Free borrowing snapshot

Want to know what you could borrow based on your current situation? We can help. Complete our quick online pre-qualifier and we’ll give you a free, no-obligation assessment.