How to Increase Your Borrowing Power

General information only, correct as at July 2026. Interest rates, government scheme rules, grant amounts and thresholds change regularly — always confirm current details with a Finconnex broker or the relevant government agency before making a decision based on any figure below.

Borrowing power isn't a single fixed number. It moves based on your income, expenses, existing debts, and a mandated buffer every lender has to apply, and it can genuinely differ from one lender to the next for the exact same application. A few practical steps can move the number meaningfully in your favour.

Understand what lenders are actually calculating

Lenders assess serviceability using your income, your living expenses (benchmarked against standards like the HEM, plus your actual spending), your existing debts and liabilities, your dependents, and APRA's mandated serviceability buffer, currently 3 percentage points above the loan's actual rate. So if you're applying at a 6% rate, the bank is testing whether you could still service the loan at 9%. That buffer isn't optional or lender-specific, every ADI applies it, and it's the single biggest factor limiting how much most people can borrow.

Close or reduce unused credit and BNPL

This surprises a lot of applicants: an unused credit card with a $10,000 limit counts against your borrowing power at the full limit, even if the balance sitting on it is zero. The same goes for Afterpay, Zip and similar buy-now-pay-later facilities. Closing accounts you don't use, or reducing limits on ones you keep, can free up real borrowing capacity before you apply.

Pay down or consolidate existing debt

Car loans, personal loans and high credit card balances all reduce how much a lender thinks you can service. Paying these down, or consolidating them, before applying can make a genuine difference to your assessed capacity.

Tidy up spending in the months before you apply

Lenders review recent bank statements, and elevated discretionary spending (subscriptions, frequent takeaway, buy-now-pay-later usage) can pull your assessed expenses up and your borrowing power down. A few months of a tighter budget before applying is one of the most direct levers available.

Know the impact of HECS/HELP debt

An outstanding HECS or HELP balance reduces your take-home pay through compulsory repayments once you're above the threshold, and lenders factor that into serviceability. Paying it down (or off) where feasible can improve your number, though it's worth weighing against other priorities before doing it purely for a loan application.

Consider your loan term and structure

A longer loan term lowers the minimum repayment used in a serviceability calculation, which can increase borrowing power, but it also means more total interest over the life of the loan. It's a genuine trade-off, not a free win, worth discussing properly rather than defaulting to the longest term available.

Shop the lender, not just the rate

This is the one most people miss. Different lenders use different expense benchmarks, treat rental income and existing debts differently, and apply the buffer slightly differently in practice. It's common for the same financial position to come back with a meaningfully different borrowing power number at different lenders, sometimes tens of thousands of dollars apart. That's precisely where working with a broker who can compare across 75+ lenders, rather than walking into a single branch, tends to make the biggest difference of all.