Has your borrowing capacity dropped since 2014?

Hi All,

I've kept track of my borrowing capacity since 2014 and has dropped substantially from then to now and wanted to get a brokers insight's into why and other investors if they have also noticed this.

In short St George were going to give me 1.6m on top of my existing debt in 2014 and now its down to 545k and my income has increased roughly 50% since 2014 and pulled some equity that's in offset.

Pay is across PAYG which includes commissions which I show consistency over 3 years, and pay split is unchanged 60/40 split and ABN income. Over both income streams it has increased by 50% and borrowing capacity still drops which makes no sense to me.

 

Of course, but it's no surprise, is it? Before all those APRA changes came circa 2015, most of us were already bracing for the fact that our serviceability wouldn't even cover what we already had, let alone more.

 

Mickyyyy did you just wake from a coma recently? Borrowing capacity has been declining over the past 5 years at a rate faster than the half life of uranium. There has been many many posts on this here since about 2015 about this - on a weekly if not daily basis.

 

Just imagine how awkward you're going to feel if he indeed just woke up from a coma.

 

I dont know about you, but the first thing I would do, after waking, wouldn't be checking my serviceability!

 

lmao yeah

 

Hahahaha no but i cannot believe its dropped that much in that time and its dropped another 145k in the last 4 months and I cracked the ***** and hence the post to confirm

 

wait until you check again in a few weeks!

 

Not sure who is in a Coma, That is what I would be doing and will be doing to-morrow. Lending restrictions are being relaxed to-morrow , taking onus of banks and giving responsability back to the borrower as it was before 2009. Mickey dont listen to naysayers the government wants more lending as the amount of defaults is too low. See a broker to-morrow. Get in before the rush.

 

These figures seem about right. Borrowing capacity has had a massive drop across the board. It started in about August 2015 and continues to this day.

But I was just now reading an article on Fin Review that suggests that this could all be about to change...

 

Oh my

 

Boom times are coming back - government is easing responsible lending laws and hopefully tells regulators to ease up as well

super low interest rates and easing credit - now all we need is for International students and migrants to start coming back

 

Probably not going to happen tomorrow, but there may be light at the end of the tunnel.

 

I think one article suggested it would be April 2021. It will take years to pay out in full.

 

I was looking for more clarity on timelines. Thanks.

 

Also depends on how much equity you’ve pulled out already.
That won’t help as from your comments, from my reading of it, looks like you’ve already used some of that borrowing capacity.

 

Your borrowing capacity decreases with age.

 

Pulled 240k and pay gone up over 50% since then. The 1.6m was on old income and if i was geez the calculator would say I should have half of what I have

 

Mid 30's right now

 

Yeh I'm already on the move to sell and buy even before the news came out