The amount you can borrow for a home loan depends on several factors including your income, expenses, credit history, property value, and the lender’s criteria. Generally, lenders use your income multiplied by a factor (often between 4 and 5 times your income) as a starting point to determine the borrowing limit. However, your existing debts, monthly expenses, credit score, and the property's value and purpose also significantly influence this amount. Lenders assess your ability to repay by looking at your income versus your expenditures, including any other financial commitments like loans, credit card payments, and living costs. A stronger credit history and higher disposable income after expenses can lead to a higher borrowing limit. Also, the size of your deposit and the type of property you're buying affect the loan amount a lender will offer. It’s also common for lenders to look at your debt-to-income ratio, typically expecting your total debts to be no more than 36% of your income, and your loan-to-value ratio, which depends on your down payment. To get a specific estimate for how much you can borrow, you can use borrowing power calculators provided by many lenders online, where you enter your income, debts, and expenses to get a personalized borrowing capacity. In summary:
- Borrowing usually ranges from 4 to 5 times your income.
- Your credit score, debts, expenses, and deposit size impact the final amount.
- Property value and intended use (owner-occupied or investment) matter.
- Lenders want proof of stable income and manageable expenses to ensure repayments.
For a precise figure, it’s best to use an online borrowing calculator or speak to a lender directly.
