Interest rate rises don’t just affect repayments—they also impact how much you can borrow.

Why borrowing power changes

Lenders assess your ability to repay a loan using a buffer rate above the actual interest rate. As rates rise, this buffer increases, reducing the amount you may be eligible to borrow.

What this means for buyers

If you’re:

  • A first home buyer → You may need to adjust your price expectations
  • An upgrader → Your next purchase may need careful planning
  • An investor → Lending conditions may be tighter than before

How to improve your borrowing capacity

There are ways to strengthen your position:

  • Reduce existing debts
  • Cut unnecessary expenses
  • Increase your deposit
  • Review loan structures and lenders

Why early planning matters

Getting clarity on your borrowing power early can:

  • Help set realistic budgets
  • Strengthen negotiations with sellers
  • Avoid surprises during the application process

Don’t rely on online calculators alone

Borrowing capacity can vary significantly between lenders. A mortgage broker can assess multiple options and provide a more accurate, tailored estimate.