Credit card limit affect on borrowing power in home loan

Post 1st July the information is a lot easier for banks to get, Does every dollar in credit limit affect borrowing limit by $3 (I assume this due to differential in interest rates).

Is there a simple equation for this and does it make a difference if I show that it is paid off direct debit every month and have never paid interest on any of my credit cards before

 

Your borrowing capacity is reduced by approximately 4 times the limit of a credit card. How much you actually owe or pay interest on is irrelevant.

 

the larger the Credit Card limit is, the less you could borrow. lenders apply 3% of the limit as your monthly expense. even you paid the cards on time every time, they will still treat them as a "debt".

when you want to borrow from banks, better to cancel unnecessary cards or reduce their limit to the minimum.

 

They’ll basically apply 3% to the limit as mention above so a $5k credit card amounts to a $150 per month liability.

Cheers

Jamie

 

Is it true that I've heard that cancelling cards prior to applications now reduces your score which may in turn hurt your application

 

Be prepared to provide written evidence of cancellation from the credit card provider.

 

Why would it hurt your score? How else might cards disappear?