How much you can borrow depends on several factors, including your income, expenses, existing debts, credit history, and the size of your deposit. Lenders also consider your employment stability and whether you're applying as a single borrower or with a partner. Every lender has different criteria, so borrowing capacity can vary widely between institutions.

As mortgage brokers, we take the guesswork out of the equation. We’ll assess your financial situation and compare borrowing limits across a wide panel of lenders to give you a realistic and accurate picture. This not only helps you understand your budget, but also positions you to make informed decisions and avoid surprises down the track.

We can also provide a pre-approval, so you know exactly what you can afford before you start house hunting. Best of all, our service comes at no cost to you.

If you're wondering how much you can borrow, reach out for a free consultation—we're here to help you take the next step with confidence.

When choosing a home loan, one of the most important decisions is whether to go with a variable, fixed, or split interest rate. Each option has its advantages and drawbacks, and the right choice depends on your financial goals, risk tolerance, and market conditions.

Variable Interest Rates

A variable rate home loan is one where the interest rate can move up or down over time, usually in line with changes to the Reserve Bank of Australia (RBA) cash rate or the lender’s own pricing decisions.

Pros:

• Flexibility – You can usually make unlimited extra repayments without penalty, helping you pay off your loan faster.
• Offset accounts – Many variable loans allow for offset accounts, which can reduce the interest you pay.
• Redraw facility – Extra repayments can be accessed later through redraw, if needed.

Cons:

• Uncertainty – If interest rates rise, so do your repayments.
• Budgeting difficulty – Monthly repayments can fluctuate, making it harder to predict long-term costs.

Fixed Interest Rates
With a fixed rate home loan, the interest rate is locked in for a set period, usually between 1 and 5 years. This means your repayments stay the same during that term.

Pros:

• Repayment certainty – Great for budgeting, as your repayments won't change during the fixed term.
• Protection from rate rises – If market rates go up, you’re shielded from higher repayments.

Cons:

• Limited flexibility – Extra repayments are usually capped or may attract fees.
• No offset account – Most fixed loans don’t offer offset facilities.
• Break costs – If you end the fixed term early, you may be charged significant fees.
   

Split Loan: The Best of Both Worlds

A split home loan allows you to divide your loan into two portions—part fixed, part variable. This can offer a balanced approach for many borrowers.

How it works:

• You choose how to divide the loan, e.g., 60% fixed and 40% variable.
• The fixed portion gives you repayment certainty and protection from rate hikes.
• The variable portion offers flexibility, allowing for extra repayments, access to redraw, and offset benefits.
   

A split loan is ideal if you want the stability of fixed repayments while still keeping some flexibility and features of a variable loan. It can reduce the impact of rate increases while still allowing you to pay down your mortgage faster with additional payments on the variable portion.

Which Option is right for you?

There’s no one-size-fits-all answer. If you value flexibility and plan to make extra repayments, a variable loan may suit you. If certainty and stability are more important, fixed might be the better path. And if you want a bit of both, a split loan could be the perfect balance.

Speak with us to compare options, calculate repayments, and find the right structure for your goals.

When it comes to managing your home loan more effectively, both offset accounts and redraw facilities can help you save on interest and pay off your mortgage sooner. While they serve similar purposes, there are key differences in how they work and how accessible your funds are.

Offset Accounts
An offset account is a separate transaction account linked to your home loan. The balance in this account “offsets” your loan principal, meaning interest is only charged on the difference. For example, if your loan is $400,000 and your offset balance is $50,000, you’ll only be charged interest on $350,000. You can access your funds anytime, just like a regular bank account, making it a flexible and convenient option.

Redraw Facilities
A redraw facility allows you to make extra repayments directly into your home loan and then withdraw (or “redraw”) those additional funds later if needed. While this also reduces the interest charged, access to the money isn’t always instant. Some lenders may impose limits or processing times, and in some cases, fees.

Which One Is Better?
It depends on your financial goals. If you want easy access to your money while still reducing interest, an offset account offers more flexibility. If your goal is long-term savings and discipline with repayments, a redraw facility may suit you better.

In many cases, having both can provide a balanced strategy—using an offset for everyday flexibility and a redraw facility for extra repayments you don’t plan to touch.

Loan-to-Value Ratio, or LVR, is a key figure lenders use to assess the risk of a home loan. It represents the percentage of the property’s value that you’re borrowing. LVR is calculated by dividing the loan amount by the property value, then multiplying by 100.

For example, if you're buying a property worth $500,000 and need a $400,000 loan, your LVR is 80%.

LVR plays an important role in determining loan eligibility, interest rates, and whether you’ll need to pay Lenders Mortgage Insurance (LMI). Most lenders consider an LVR of 80% or lower to be low risk. If your LVR is above 80%, you may be required to pay LMI to protect the lender.

A lower LVR not only reduces your risk but may also give you access to more competitive rates. Saving a larger deposit or increasing equity in your home can help improve your LVR.

Lenders Mortgage Insurance (LMI) is a one-off insurance premium that protects the lender—not the borrower—if you default on your home loan. It allows lenders to approve loans with a deposit smaller than 20%, helping more people get into the property market sooner.

If you're borrowing more than 80% of the property’s value (Loan-to-Value Ratio or LVR), most lenders will require LMI. While it protects the lender, the cost is paid by the borrower and is either added to your loan amount or paid upfront.

The cost of LMI varies based on the size of your loan, your deposit, and the lender’s policy. It can run into thousands of dollars, so it’s important to factor it into your overall budget.

While LMI adds to the cost of buying a home, it can be a useful tool for borrowers who have stable income but haven't yet saved a large deposit. In some cases, alternatives such as a guarantor loan or first home buyer schemes can help avoid the need for LMI.

Speak with us to understand your options and whether LMI applies to your situation.

The Reserve Bank of Australia (RBA) sets the official cash rate, which is the interest rate at which banks borrow money. When the RBA changes this rate—either increasing or decreasing it—it often has a direct impact on variable home loan interest rates offered by lenders.

If the RBA raises the cash rate, lenders usually respond by increasing their variable home loan rates. This means your monthly mortgage repayments are likely to rise, as you’ll be paying more interest on your loan. Even a small rate increase can add up significantly over time, especially on large loan amounts.

Conversely, when the RBA lowers the cash rate, lenders often reduce their interest rates, which can lower your monthly repayments and reduce the total interest you pay over the life of your loan.

It’s important to note that lenders are not required to follow the RBA exactly, and their responses can vary. Fixed-rate home loans are not immediately affected by cash rate changes, as their rates are locked in for a set term.

Understanding how RBA decisions influence your mortgage is key to managing your finances effectively. If rates are rising, it may be time to review your loan, explore refinancing options, or consider fixing part of your mortgage to protect against further increases.

As mortgage brokers, we monitor rate movements closely and can help you stay informed and proactive—so you’re always one step ahead.