When buying a home, your borrowing capacity—the amount a lender is willing to lend you—determines your budget. If you’re struggling to borrow enough or want to boost your loan eligibility, there are ways to increase your borrowing power and secure a better home loan.

At Mortgage Matrix, we help you get the most out of your finances. Here’s how you can maximise your borrowing capacity and improve your chances of home loan approval.

1. Reduce Your Debts

Lenders assess your ability to repay a loan by looking at your existing debts, including:
✔ Credit cards and personal loans
✔ Car loans and buy-now-pay-later services
✔ HECS/HELP (student loans)

💡 Tip: Pay off or reduce outstanding debts before applying for a home loan. Even unused credit card limits can impact your borrowing capacity. Consider lowering your limit or closing unused cards.

2. Improve Your Credit Score

A strong credit score signals to lenders that you're a responsible borrower. You can improve your credit score by:
✔ Paying bills, loans, and credit card repayments on time
✔ Avoiding too many loan applications in a short period
✔ Checking your credit report for errors

💡 Tip: Review your credit score for free through Equifax, Experian, or illion and fix any incorrect listings before applying for a loan.

3. Increase Your Deposit

A larger deposit reduces the lender’s risk and improves your chances of getting a bigger loan. A 20% deposit also helps you avoid Lenders Mortgage Insurance (LMI), saving you thousands.

💡 Tip: If saving for a larger deposit isn’t an option, you may be eligible for government schemes like the First Home Guarantee, allowing you to buy with just 5% deposit and no LMI.

4. Boost Your Income

The higher your income, the more you can borrow. While this may not always be within your control, here are some ways to improve your earnings:
✔ Negotiate a pay rise (if possible)
✔ Consider additional work or freelance income
✔ Add rental income if you own an investment property

💡 Tip: If you're self-employed, keep clear financial records to prove consistent income to lenders.

5. Choose the Right Loan Structure

Different loan structures can impact how much you can borrow. Lenders assess affordability based on monthly repayments, so choosing the right loan type can improve your borrowing capacity.

🏡 Interest-Only Loans – Lower repayments in the short term, which may increase borrowing power.
🏡 Longer Loan Terms – Spreading repayments over 30+ years can reduce monthly commitments, allowing you to borrow more.

💡 Tip: Use our Mortgage Repayment Calculator to compare different loan structures and see what works best for you.

6. Refinance Existing Loans

If you already have a home loan, car loan, or personal loan, refinancing to a lower interest rate can reduce your repayments and increase your borrowing power.

💡 Tip: Use our Refinance Savings Calculator to see how much you could save by switching to a better loan.

Ready to Maximise Your Borrowing Power?

At Mortgage Matrix, we specialise in helping buyers get the most out of their home loan options. Whether you’re buying your first home or upgrading, we’ll guide you through the process to secure the best loan for your needs.

💬 Book a free appointment today and take the next step toward homeownership!