Home loan borrowing calculator

Your borrowing power is an approximate measurement of your ability to borrow funds. Basically, it’s an indication of how much you can afford to borrow while still being able to meet your other financial obligations. Each lender will calculate it differently, but generally speaking, a borrowing power calculator takes into account things like your income, current loans and liabilities, credit cards and their limits, and your living expenses. You can use our borrowing power calculator to get an idea of what your borrowing power is. Learn more about what goes into calculating your borrowing power

Every lender has their own formula for calculating your borrowing power, and they generally look at six main factors.

• Deposit - the larger your deposit, the more you can borrow and the less interest you’ll have to pay on your loan.
• Income – this is not just how much your household brings in, but how much is left for home loan repayments after the bills and day-to-day expenses are paid.
• Level of debt – how much you owe on other loans and credit card limits will also influence your available income.
• Savings history – having a savings history of at least 3 months demonstrates to a lender that you’ll be able to manage your home loan repayments.
• Credit rating – a sound credit rating is one of the first things lenders look at, as it is based on your borrowing and repayment history.
• Home loan term – a lender will look more favourably at a longer loan term, but remember it will mean you pay more interest over the life of the loan.
• Property value - a lender may conduct a valuation of your chosen property to determine the amount they are willing to lend you.

​​You can get an upfront estimate of your borrowing power with Tiimely Home by using our borrowing calculator.

What is a good deposit on a house? The simple answer is as much as you can possibly get together. The larger the deposit you have, the smaller the loan you’ll need, the easier the approval process will be and the better the interest rate and loan terms you’ll be able to negotiate.

The minimum home loan deposit normally required is 10%, but you should try and get at least 20% together if you can. That’s because if you borrow more than 80% of a property’s value, your lender may require you to take out Lenders’ Mortgage Insurance.

It’s also worth checking if you’re eligible for any grants or government schemes (like the First Home Owner Grant), as they can help to bolster your deposit amount.

Lenders' Mortgage Insurance is insurance you’ll need to pay if you borrow more than 80% of a property’s value (i.e. if you have less than a 20% deposit). A 70% LMI is required for high-density units when applying for the Tiimely Own Home Loan or with certain lenders. This means you will need a deposit of at least 30% of the property's value to avoid paying LMI.

It protects the lender from financial loss if you can’t afford to meet your repayments and default on the loan.

Factors that affect how much LMI will cost you include:

The size of the loan - the bigger your loan, the higher the cost of LMI.

Your deposit amount - the smaller the deposit, the higher the cost of LMI.

The purpose of the loan – investors can pay as much as 20% more for LMI than home buyers.

Your employment status – how much you earn and whether you work full time or casual can influence the cost of LMI.

The insurer used by your lender - premiums differ between insurers.

Ways to avoid paying LMI or reducing how much you pay can include

Growing your deposit to 20% or more

Having a family member go guarantor on your loan (While we don't offer guarantor loans for Tiimely Own Home Loans, we can assist you in finding a suitable guarantor loan through our in-house broker service).

Applying for the First Home Loan Deposit Scheme and

Comparing LMI quotes from a number of lenders.

LMI can cost you thousands of dollars, so if you want to avoid paying it, the best way is to save at least a 20% deposit before applying for a loan.

In short, no. However, your maximum purchase price may increase with a higher deposit.

When we look at your borrowing power, we take into account your ability to comfortably meet repayment requirements, which is impacted by your income, expenses, other financial commitments and living/family situation (eg de facto, single, dependents or no). All of these factors can impact how much you can borrow. Using tools like borrowing calculators is an easy way to get an idea of how much you can borrow.

You can increase your borrowing power by reducing your financial commitments. Things like closing or reducing the limits of unused credit cards can improve your borrowing power.

Having extra income (like a second job or side hustle), and ensuring you have all your extra income types (like overtime or commission) included when filling out an application. A borrowing calculator can also help!