Do you know your borrowing capacity?

With the Royal Commission into the Banking, Superannuation & Financial Services Industries well under way and lenders coming under fire for the way they have conducted themselves in recent time, lenders have already started to act to save their image.

One way lenders have started to combat these negative findings it to batten down the hatches and tighten their lending to new potential borrowers. A few of the ways lenders have curbed the amount of lending to potential borrows are:


  • Introducing new tight credit policies that are very strict on borrowers
  • Assessment of your current interest rates are at a very high ‘buffer’ rate of around the 7.5% mark (instead of current interest rates)
  • Closely monitoring borrower’s exact month on month living expenses
  • Increasing interest rates


With all the above factors coming into play, borrowers have found it extremely difficult to achieve the amount of credit they would have received in previous years. This has especially impacted many previous borrowers who borrowed credit in a more relaxed market and therefore, are struggling to refinance into better deals because of the new tight restrictions.

As you can see from the below graph, the average borrower’s borrowing capacity has decreased around $100,000 in the past 3 years.

borrowing capacity

If you would like to know your potential borrowing capacity in today’s market or would like to discuss options to refinancing your current loan into a better deal, please feel free to contact one of our skilled brokers from the Allan Hall Finance team on +61 2 412 038 205.