Why your borrowing capacity is probably lower than six months ago?
The increase in interest rates over the past six months has made it harder for Australians to qualify for a home loan, and made it more important they get help from a mortgage broker.
Every rate increase of 0.50 percentage points reduces an average borrower’s maximum loan size by about 5%, according to the Reserve Bank’s head of domestic markets, Jonathan Kearns.
Since May, the Reserve Bank has increased the cash rate by 2.50 percentage points – which means the average person’s borrowing capacity has fallen by about 25%.
The key words here are ‘average’ and ‘about’ – because borrowing capacity varies not just from person to person but lender to lender. Two banks can offer the same borrower very different maximum loan amounts; sometimes, they might be more than $100,000 apart.
With borrowing conditions getting harder, it’s vital you seek guidance from an expert broker.
We work with a large panel of lenders, so we know which lenders would be more likely to offer finance to someone with your scenario. I can then present your application in such a way as to maximise your chances of approval.
Dream Catchers Lending is an MFAA-accredited member. We can assist with finding the right type of finance for you. Feel free to book an obligation-free virtual appointment or leave us your details.
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