How to Maximise Your Borrowing Capacity Before Applying

Your borrowing capacity determines how much you can borrow — and small changes can make a surprisingly big difference. Here's how to put yourself in the strongest possible position before you apply.

Why Borrowing Capacity Varies Between Lenders

Different lenders assess your borrowing capacity using different calculators, income recognition policies, and expense benchmarks. The same person can get very different results from different lenders — which is why using a broker to match you to the right lender matters as much as the rate.

The Biggest Levers You Can Pull

1. Reduce Your Credit Card Limits

This is one of the most impactful and fastest changes you can make. Lenders assess credit card limits as potential debt — not just current balances. A $20,000 credit card limit can reduce your borrowing capacity by $80,000–$100,000, even if you owe nothing on the card. Reduce limits to what you actually need.

2. Close BNPL and Unnecessary Credit Accounts

Afterpay, Zip, Humm and similar buy-now-pay-later services appear on your credit file and are assessed as liabilities. Close accounts you don't regularly use before applying.

3. Pay Down Personal Loans and Car Finance

Every existing debt reduces your borrowing capacity. If you're close to paying off a car loan or personal loan, it may be worth clearing it before applying — the boost to your borrowing capacity often exceeds the interest saved.

4. Avoid New Credit Applications

Every credit enquiry leaves a mark on your credit file. Multiple applications in a short period can look like financial stress to a lender. Avoid applying for new credit cards, personal loans or car finance in the 6 months before applying for a home loan.

5. Demonstrate Consistent Savings

Lenders want to see evidence that you can manage money. Three to six months of consistent savings and stable spending patterns strengthens your application significantly.

6. Consider Your Income Structure

Some lenders are more generous with how they assess overtime, bonuses, rental income, or self-employment income than others. We match you to lenders whose assessment criteria suits your income type.

What About Your Credit Score?

Your credit score affects both your ability to be approved and the rates available to you. You can check your score for free via Equifax, Illion or Experian. If your score has been affected by missed payments or defaults, some time and good financial behaviour will improve it — and some lenders specialise in working with borrowers who have imperfect credit histories.

How Long Does It Take?

Some changes — like reducing credit limits — can impact your capacity within weeks. Others, like paying off a personal loan or building a savings history, take a few months. We recommend starting this process at least 3–6 months before you plan to apply for a significant loan.

The good news: a free consultation with us costs nothing and can identify the two or three changes that will have the biggest impact on your application.