Borrowing Capacity - Calculator?

Discussion in 'Property Finance' started by Dan3213, 23rd Oct, 2018.

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  1. Dan3213

    Dan3213 New Member

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    Hi all,
    Long time reader, first time poster!
    Background: me and my fiance are 28 and are looking to stop renting and make the plunge in the next 12 months.
    Our financial situation is roughly as follows: current savings = $100K, savings/year = $40K, rent/year = $25K, combined income pre-tax excluding super = $180K
    Is someone able to tell me how much our borrowing capacity would be? Or whether there is an accurate online calculator available?
    Thanks in advance
     
  2. tobe

    tobe Well-Known Member

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    Welcome.
    There isn’t an accurate online calculator. The best way is to contact a broker or banker, complete their survey/initial fact find and they can give you a good estimate. Send them your payslips ID and savings and transaction statements and they can confirm which lenders policies best suit.

    Best of luck.
     
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  3. kaibo

    kaibo Well-Known Member

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  4. Perthguy

    Perthguy Well-Known Member

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    I don't trust the online calculators. The last one I did 100% accurate and it's supposed to be a good one, told me I could borrow $1,000,000

    Seriously, speak to a broker
     
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  5. kaibo

    kaibo Well-Known Member

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    only takes a minute to do and I am not saying not to speak to broker but those calculators have their place
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Hey Dan, bank calcs are not much more than a marketing tool. It's pretty complex these days, but if you email some details to a broker along with your payslips they should be able to give you a ball park figure. :)
     
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  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Even if this was accurate (and it's not even close to HSBC's policy or any other lender), most people wouldn't give it the right information to begin with. The really bad thing is they tend to grossly over estimate the actual figure, leading to people making bad decisions.

    These calculators are a marketing tool to generate business. They have no place in assessing borrowing capacity.
     
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  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Best to hit up a decent broker re your borrowing capacity - a few good ones have responded to your post.

    Cheers

    Jamie
     
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    they sure do. They are designed to provide a very broad brush guide, and as a lead in marketing tool.

    In a world where lenders are now asking for up to 4 mths of outgoing statements such as salary account, credit cards etc and drilling down on expenses, and where variable income is treated variably by different lenders at different LVRs, and ASIC APRA and RC influences are increasingly coming to fruit, borrowers will be well served to speak with their banker or broker to get real, useable data that they can moderately rely on when making decisions.

    ta
    rolf
     
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  10. jazzsidana

    jazzsidana Mortgage Brokers - Investment Savvy Business Member

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    Gone are the days of using online calc..

    And great that you starting to prepare now for it!.. Any decent broker should be able to help crunch the numbers and guide you through the process and make you aware of pitfalls (if any)..

    From timing perspective, property market should have hopefully bottomed by then too. Kind of great timing wise I'll say!..

    Good luck,
     
  11. Lindsay_W

    Lindsay_W Well-Known Member

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    Interesting, can you explain why you think the market will bottom out in the next 12 months? Should I be waiting 12 months before buying property?
     
  12. Bullion Baron

    Bullion Baron Well-Known Member

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    Looking at those numbers you may max out based on your deposit before you hit a serviceability limit.

    If you stick to a max LVR of 88% (unless you want to pay through the nose for LMI), then your deposit would enable you to purchase a property worth roughly $675,000 e.g.

    $81,000 deposit
    $17,785 stamp duty (based on concession rate, First home buyer duty exemption, concession or reduction | State Revenue Office assuming you are a first home buyer)
    $2,000 legals
    Total: $100,785

    This would leave you with a loan of $594,000 + ~$9,000 (LMI), which should be well within your serviceability on those incomes.

    But yeah... *echo* Speak to a broker, etc *echo* as there are a lot of variables (e.g. if you were buying a new home there may be additional concessions).