Property Purchase Loans
How Much Can You Borrow To Buy Property?
5 min read- Finance Guide
- Updated 2026
Quick answer
Borrowing capacity is driven by
6x DTI watchpoint
Income, debts, expenses, deposit and lender policy all matter
- Typical pre-approval 3 to 6 months
- Serviceability buffer 3 percentage points
- Common loan term Up to 30 years
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1300 421 044
Detailed explained
Borrowing capacity is not a single universal number. Each lender uses its own policy, calculator and risk settings to decide the maximum loan amount it may offer. Two borrowers with the same income can receive different outcomes depending on their deposit, liabilities, dependants, credit conduct, loan product, property type and the lender chosen.
How property loan interest rates work
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Gross and usable income are assessed first, but lenders usually shade some types of income such as overtime, bonuses, commission or rent
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Existing repayments including credit cards, car loans, HECS or HELP, personal loans and other mortgages can reduce capacity
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Living expenses, dependants and household commitments are factored into serviceability and can materially change the result
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A larger deposit or stronger equity position can improve options, reduce risk and sometimes lower the total cost of borrowing
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BORROWING SNAPSHOT
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High DTI lending
6x income or more
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Lower deposit lending
may be possible
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Borrowing range varies
The lender, product and property can all change the final amount available
How the approval process works
Pre-Approval
01
Review your income, debts, expenses and deposit to estimate an affordable borrowing range
Property
02
Choose a property within that range and make sure the type and location fit lender policy
Valuation
03
The lender may value the property to confirm the security supports the loan amount sought
Settlement
04
Formal approval follows once serviceability, documents and security are acceptable and loan documents are completed
What lenders look at
Income
Base salary, self employment income, rent and other acceptable income sources may all be assessed differently
Existing debts
Credit cards, car finance, personal loans, student debt and other mortgages can materially reduce capacity
Living expenses and dependants
Household spending, number of dependants and ongoing commitments affect serviceability
Deposit or equity position
A stronger cash contribution or usable equity can improve lender choice and loan structure
Credit conduct and repayment history
Clear repayment behaviour and a cleaner credit profile usually support a stronger application
Property type, condition and location
Some properties attract tighter policy settings, lower LVRs or fewer lender options
APRA DTI limit from 1 February 2026
APRA requires ADIs to limit new residential lending at debt to income ratios of 6 times or more to 20 percent of new owner occupier lending and 20 percent of new investor lending.
Need Help with your Purchase?
From contract to settlement
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01. After formal approval, you sign loan documents and satisfy any final conditions before settlement
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02. Your solicitor or conveyancer coordinates with the lender, seller and other parties to prepare settlement
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03. On settlement day, the lender provides funds, title transfers and the mortgage is registered against the property
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03. Settlement is often around 30 to 90 days after contract signing, although the exact date is negotiated in the contract
Common problems
Borrowing capacity can look strong at first glance and still fall short once a lender applies its policy. Problems often arise when debts are understated, expenses are higher than expected, or the property does not fit standard policy
Income not used in full
Not every dollar earned is always counted at 100 percent. Variable income, overtime, bonuses and some rental income may be shaded, reducing the final borrowing amount.
Possible solutions include:
Use the most accurate recent income evidence available- Reduce reliance on short term or irregular income where possible
- Consider lenders with policy better suited to your income type
- Adjust the purchase budget to a realistic serviceability range
Debt and expense pressure
A loan can be reduced or declined when existing repayments, household spending or dependant costs leave too little surplus income.
Possible solutions include:
- Reduce or close unused credit limits where appropriate
- Repay short term debts that weigh heavily on serviceability
- Present clear and accurate living expenses
- Consider a smaller loan amount or larger deposit
Property or policy mismatch
Some properties are harder to finance because of location, size, condition, zoning or valuation issues, which can lower the maximum loan available.
Possible solutions include:
- Check lender appetite for the property type early
- Order or review valuation evidence where appropriate
- Use a larger deposit if policy is tighter on the property
- Choose a lender whose policy suits the security
Steps to get Finance
Step
01
Check your likely borrowing capacity before searching so your budget matches lender policy.
Step
02
Gather payslips, tax returns, bank statements and debt information for a realistic assessment.
Step
03
Reduce avoidable debts or unused credit limits if they are dragging down serviceability.
Step
04
Choose a property that fits both your budget and the lender’s security requirements.
Step
05
Submit the application and complete valuation, approval and loan documents.
Step
06
Proceed to settlement once formal approval is issued and all conditions are met.
Speak with a Property Finance Specialist
Borrowing capacity can vary significantly depending on your income, existing debts, household spending, deposit size and the property you want to buy.
A specialist can review your position and help identify which lenders may be better suited to your borrowing range and purchase scenario.
Speak with a finance specialist about your property borrowing capacity
Submit the short form below and a property finance specialist will review your scenario and discuss possible borrowing options.
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