How much can I borrow?

First Home Buyers

15 Nov 2021

| Home Loan

Every home buyer is different, and the amount that each person can borrow is also different. Your borrowing potential is determined by your income, your assets, your living expenses, and the kind of loan you are after.

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Your income helps us figure out how large a home loan you can afford. Typically, you want to try and keep your repayments to no more than 30% of your after-tax income.

Expenses and commitments

Just because you are saving for a home doesn’t mean you have to stop having fun. To make sure you can comfortably afford the home you want, make sure you include all of your financial commitments, including your bills, food, transport costs, utilities, clothing, health care, and an allowance for entertainment.

These financial commitments affect how much you can afford to borrow, so it is often a good idea to cut any wasted expenditure, and consolidate any debts or loans (credit card personal loan) you may have prior to applying for a home loan. Keep an eye out for balance transfer offers on credit cards where you can consolidate debt and pay no interest on that amount for a set period of time.


A big part of determining how much you can borrow is your deposit. Put simply, the bigger your deposit, the smaller your loan, and the less interest you’ll pay – meaning you could pay off your house faster.

Obviously you should save as much as you can, but we recommend 10% of the property price. A deposit of 20% or more means you don’t have to worry about the cost of Lenders Mortgage Insurance.

Take a look at these common costs of buying a property, and use our budget calculator to help you save the biggest deposit you can.

Budget Planner Calculator

How to prepare your finances for a home loan

Bite-size tips with Emma from The Broke Generation.

Family Guarantee

Many first-home buyers have to compromise to get on the property ladder, whether that be through a home that’s too small, doesn’t have enough bedrooms, or just isn’t in an ideal location. This can result in them having to contend with another move and all the associated costs just a few years down the track.

A Family Guarantee, however, makes it possible for the buyer to borrow more and make a more sustainable property choice – first time round.

A Family Guarantee lets parents leverage equity in their own home to guarantee a portion of a child’s mortgage. This can significantly reduce the size of deposit required, or possibly even eliminate it entirely.

If the equity’s there, there’s no doubt it’s an effective way to help a young home buyer enter the market. It may also be possible to apply the Family Guarantee beyond immediate family members, and involve in-laws and stepparents instead.

Family Guarantee Loan repayments calculator

This is general advice only and doesn’t take into account your objectives, financial situation or needs.

The target market for this product can be found within the product’s Target Market Determination (TMD), available at creditunionsa.com.au/tmd

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