How Much Can I Borrow? Understanding Your Borrowing Power in 2025

When planning to purchase a property, one of the most important considerations is understanding how much you can borrow. Your borrowing power not only determines the price range of properties you can consider, but also helps you plan your financial commitments with confidence.

In this article, we break down what affects your borrowing capacity and how lenders assess your financial position in 2025.

Key Factors That Influence Borrowing Power

Lenders use a range of criteria to calculate your borrowing capacity, including:

• Income

  This includes your base salary, bonuses, rental income, and self-employment income (if applicable). Lenders may require consistent income history, especially for self-employed applicants.

• Living Expenses

  These include household costs, transport, groceries, insurances, subscriptions, and any discretionary spending. Most lenders now use detailed expense categories to assess financial habits.

• Current Debts and Liabilities

  Credit card limits (not just balances), personal loans, car loans, and any “Buy Now Pay Later” arrangements reduce the amount you can borrow.

• Number of Dependents

  The more dependents you support, the higher your ongoing expenses—this affects serviceability.

• Interest Rate Buffer

  As of 2025, most lenders apply a buffer of at least 3% above the current interest rate to ensure you can meet repayments if rates rise in the future.

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Borrowing Capacity Varies Between Lenders

It’s important to note that not all lenders calculate borrowing power the same way. Some are more conservative with living expenses or income types, while others are more flexible—especially with self-employed clients or those with non-standard incomes.

For example, two different banks may offer vastly different borrowing limits to the same applicant.

Why Work With a Mortgage Broker?

As a mortgage broker, my role is to compare policies across a wide range of lenders and present tailored options based on your unique financial position.This can:

• Increase your borrowing power

• Uncover lender policies that better match your situation

• Ensure you're not overextending financially

Ready to Get Started?

If you're planning to buy this year and want a clear picture of your borrowing capacity, I’d be happy to help.Get in touch for a personalised assessment—no obligation, just insights.