How much can you borrow for a home loan?

Couple discussing how much they can borrow
Thinking about buying or building a home?

Figure out how much you might be able to borrow with this guide that covers everything lenders consider when you apply for home loan.

When you make the decision to buy your first home, one of the first things you’ll want to consider is how much you can borrow for a home loan. This will help you decide the type of home and where you can afford to buy.

While our calculators can help you do some initial research about your borrowing power, there are a few different factors that determine how much money your lender will loan to you. We’re breaking it down to help make the buying process just a little bit easier.

Income and daily expenses

One of the first things your lender will look at is your employment history, income and your daily expenses. A consistent employment history in which you’ve had a full time job for the last 12 months or more is a great first sign for your lender. 

They will also consider your income and any daily expenses you’re committed to. This includes things like rent, utilities or personal loans. This will help them determine how much money you have left to make repayments on a potential home loan. The goal is to decide how much you can realistically afford without overextending yourself. 


Your deposit amount is another large factor in how much you can borrow. The minimum deposit amount for many lenders is 10% of your potential purchase price, but you should aim for approximately 20%. This is for a number of reasons.

Lenders look favourably on good deposits for a number of reasons. First and foremost, the more you save, the less you have to borrow and repay in interest. A good deposit is also a solid sign of your ability to stick to a budget and commit yourself financially to a home loan. 

If you borrow more than 80% on a home loan, you’ll likely have to apply for Lender’s Mortgage Insurance, which is an additional cost. 

If you’re just not able to pull together much of a deposit, all is not lost. Finance solutions are available. This includes no and low deposit programs that can help you get over that initial hurdle. 

Credit history and rating 

Lenders will look into your credit file in assessing your eligibility for a home loan. This includes your credit score and your history of borrowing and repayments. The better your credit file and score, the more likely you are to get a loan with the best repayment terms.

If you’re worried that you don’t have a credit score, or it isn’t as good as it could be, there are steps you can take to improve your credit score. Just keep in mind that it will take some time, so be patient and consistent. 

First home grants and schemes

The Australian government understands the challenges that many first home buyers face, which is why there are a number of first home buyers grants and schemes. These aim to ease the process of buying a home by offering one off payments or waving additional costs such as stamp duty for those who are buying their first home. 

These programs vary from state to state, with different eligibility requirements, so it’s important to do a bit of research to see what’s available to you and if you qualify. 

The price of the property

Last but certainly not least, your lender will look at the price of the property that you would like to purchase. This includes conducting a property valuation

As you might have suspected, this is yet another step to help your lender decide if you will be able to consistently make repayments on your loan. However, conducting a property valuation is key in determining the true value of your potential home, which helps to ensure you’re not overpaying. 

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