What’s my borrowing power? Why it might be higher than you think

Your borrowing power can set the tone for your entire homebuying journey because it’s this that tells you what you might be able to afford – the kind of home, the location, the size of the land. And so it’s understandable that most buyers hope to maximise their borrowing capacity.

Buyers want freedom of choice and a little financial wiggle room when searching for the right property. A small borrowing capacity can leave you with fewer options in a competitive real estate market.

If you’re looking to buy a home, you are certainly going to be wondering, what’s my current borrowing power? The good news is, it might be higher than you assume.

Our current economic situation

A series of factors have led to a promising economic state for Australians looking to buy their first home, add to their portfolio or even renovate. A spate of interest rate rises between May 2022 and late 2023 first led to a cautious homebuying market. Lenders subsequently adjusted their serviceability calculators, which provided opportunities for loan reassessment.

On May 20, 2025, the Reserve Bank of Australia then announced its second cash rate cut for the year. This decision is likely to increase borrowing power for homebuyers, meaning now may be a good time to buy. This holds true whether it’s your first property or sixth.

Rates are starting to reduce, rental yields are sound and many properties are sitting on good equity. That means that Australians who already own a property could leverage this equity to boost their borrowing power. Alternatively, the equity could help fund property renovations.

But what is borrowing power?.

What is ‘borrowing power’?

Borrowing power is the amount that a lender will allow you to borrow to buy a property. It’s also known as borrowing capacity.

Lenders consider a number of factors when calculating your borrowing capacity or power, including income, debts and living expenses. This means that minor tweaks to your lifestyle can make a big difference.

What’s my borrowing power?

If you’re hoping to calculate what your borrowing capacity is, you’ll find many lenders offer basic borrowing power calculators online. But for a more accurate figure, consult an experienced mortgage professional.

Factors that could boost your borrowing power right now

• Interest rate cuts: Reducing the amount of interest that borrowers have to pay on their home loans also decreases their loan repayments. This converts to a higher borrowing capacity. The recent rate cuts announced in May could boost your ability to borrow more for many Australians.
• Tax cuts: When the government reduces the amount of tax that Australians have to pay, workers end up with more after-tax income in their pockets. Since income directly affects how much you can borrow, the recent Stage 3 tax cuts could support Australian homebuyers.
• Changes to how HECS-HELP debt affects loans: In the past, HECS-HELP debts were treated like personal loans by mortgage lenders. That meant that the borrowing power of Australians with these debts was significantly reduced.

Now, it’s possible for lenders to ignore these repayments in loan serviceability checks, provided the debt is close to being paid off. This could mean major borrowing power boosts for those affected. 

Other ways you can boost your borrowing power

If you’re looking to boost your borrowing power right now, there are some steps you can take.

• Reduce your everyday expenses: We know that cost-of-living pressures are serious right now. But there are still many lifestyle changes that could help you to save more income. Consider spending less on entertainment, cutting subscriptions (e.g. apps and streaming services) and shopping around for cheaper service providers (e.g. phone and electricity).
• Pay off debts: Strive to pay off your debts wherever possible. You can also strategically consolidate your debts to reduce the amount of interest paid.

• Increase income: Is it possible to work overtime or extra shifts? Are you due for a pay rise at work?
• Pay off credit cards and reduce excessive limits: Reducing the maximum limit on your credit card could increase your ability to borrow more from lenders.

• Boost your credit score: Lenders take your credit history into account, but remember that your credit score isn’t permanent. Increase yours by paying all of your bills and debt repayments on time – every single time.

• Consult an experienced mortgage broker: Finance professionals can assess your current situation and guide you on the best way to boost your borrowing power.

I need help calculating what’s my borrowing power

If you’re still wondering, ‘What’s my borrowing power?’ Stapleton Finance can help. As Brisbane mortgage brokers, we know the nuts and bolts of home buying in Australia. We can take a look at your financial situation and calculate your what you can currently afford. Together, we can develop a plan to boost it even further. This way, you can smash your financial goals.

Our highly experienced and understanding team can help kickstart your borrowing journey today. Get in touch with a member of the Stapleton Finance team, we’d love to support you.

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