How to improve your borrowing power in Melbourne
If a bank says you can't borrow as much as you hoped, don't give up. There are proven ways to improve your borrowing power in Melbourne — and small changes can add tens of thousands to what lenders will approve.
Clear or reduce your debts
Credit cards, personal loans, car finance and buy-now-pay-later all reduce your borrowing power — sometimes dramatically. Lenders count the limit on a credit card, not just the balance you owe.
Closing unused cards and paying down small debts before you apply can lift your approval amount more than almost anything else.
Tidy up your spending
Lenders review your bank statements to gauge your living costs. Reducing discretionary spending in the months before you apply helps you present as a lower-risk borrower.
Avoiding overdrawn accounts, gambling transactions and missed payments in the lead-up makes a real difference to how lenders view you.
Boost or evidence your income
Overtime, bonuses, commissions and a second job can all count toward your income if you can document them. Self-employed borrowers benefit from clean, up-to-date tax returns.
Sometimes simply choosing a lender that counts more of your variable income lifts your borrowing power significantly.
Choose the right lender
Every lender calculates borrowing power differently — they use different assessment rates, treat HECS and rental income differently, and weigh expenses in their own way.
The same applicant can be offered very different amounts across lenders. This is where a broker adds real value, matching you to the lender that sees you most favourably.
Structure the loan smartly
Loan term, repayment type and whether you buy alone or with a partner all affect your capacity. A longer term or the right structure can lift what you can comfortably service.
A XLOANS broker models these levers across the market so you borrow as much as you safely can — without overcommitting.
Keep reading
Frequently asked questions
This page is general information only and not financial advice. Lending criteria, rates and government schemes change — speak to a XLOANS broker for advice tailored to your situation. XLOANS is a Melbourne-based mortgage broking service.
Want to borrow more in Melbourne?
A XLOANS broker will find ways to lift your borrowing power and match you to the right lender — free.