Has your borrowing power increased in 2025?

If you haven’t checked your borrowing power recently, it might be worth another look. A lot has happened in 2025, and your borrowing capacity could be higher than you realise.

It’s been a busy year on the money front.

Tax cuts, a couple of rate cuts, and reductions in HECS debts have all potentially been a plus for our financial wellbeing.

That’s not all that’s improved.

There’s a decent chance your borrowing power has enjoyed a boost, which could make now a good time to revisit your borrowing capacity.

What shapes your borrowing power?

Your borrowing power, or as lenders like to call it – your borrowing capacity – is the amount a lender will let you borrow to buy a home.

Each lender has their own way of calculating borrowing power.

But it mainly boils down to three things: your income, your household expenses, and any other debts you may have that’ll need to be repaid alongside a home loan.

The important thing to know is that your borrowing power isn’t set in cement.

It can change over time, and recent months have seen several events that are likely to have increased your borrowing capacity.

Here are 4 reasons why your borrowing power could be on the rise.

1. Interest rates have fallen

Two official rate cuts this year have helped to lower home loan interest rates.

This time a year ago, the average variable rate on new loans was about 6.3%. Today it’s closer to 5.8%.

Lower rates mean lower monthly home loan repayments. This flows through to higher borrowing power.

How much higher?

Canstar says the February and May rate cuts could have added $23,000 to the borrowing power of a single person on the average wage. A couple may have seen their borrowing power increase by $40,000-$45,000.

2. Tax cuts have kicked in

A year ago we were celebrating the arrival of Stage 3 tax cuts that put money back in our hip pockets.

Tax cuts can have another happy side effect.

Paying less tax can mean more after-tax income. This converts to higher borrowing power.

The uptick can be surprisingly generous.

According to Compare the Market, the Stage 3 tax cuts could mean a couple with no kids has seen a $47,000 increase in their borrowing capacity.

3. Wages are up

Around 2.9 million Australians received a pay rise from the start of July thanks to a 3.5% increase in the National Minimum Wage and award wages.

Even if you’re not covered by these wage rises, the boss may have agreed to give you a pay rise from 1 July.

Or a new job could see you earning more.

Talk to us to know how a bigger pay packet may have impacted your borrowing power.

4. Lenders are treating HECS-HELP debts differently

In the past, lenders have typically included student debt – that’s HECS-HELP loans – in their loan serviceability calculations.

In 2025 however, lenders have been given the flexibility to overlook HECS-HELP repayments as long as the outstanding student debt is close to being paid off.

If this sounds like you, your borrowing power may now be higher than you expect.

Steps you can take to potentially lift your borrowing power

Keen to boost your borrowing capacity further? It may be done by following some, or all, of the steps below:

Reduce regular expenses: lenders take household expenses into account when deciding how much you can borrow. Trimming back a few regular bills can make a difference to your borrowing power. Consider cutting back subscriptions for apps and streaming services, the gym, or shop around for cheaper power or phone plans.

Cut your credit card limit: lenders assess your borrowing capacity based on your card’s credit limit, not the outstanding balance. As a rough guide, every $10,000 of credit card limit can reduce your borrowing power by about $50,000. If you’re not keen on cancelling a card altogether, consider contacting the card issuer to lower the credit limit.

Keep a lid on other debts: the more you can cut back other debts, such as personal loans or car loans, the higher your borrowing power can be. Sure, it’s not easy paying down debt. But keep your eyes on the prize – it could take you closer to buying your first, or next, home.

Get to know your number

Just because you can borrow more, doesn’t mean you should borrow more.

Even so, it’s always worth knowing your personal borrowing capacity – it’s a key number that can help you achieve your property goals.

Get in touch if you’d like to find out your current borrowing power.

We can share ways you can improve your borrowing capacity, and explain how you can make the most of it to apply for a loan that matches your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Two-thirds of borrowers could save by refinancing: report

Home owners hoping for rate relief in July may be disappointed, but it’s still possible to score a rate cut of your own by refinancing. Despite this, plenty of borrowers are sticking to an old loan – and it could be costing them.

When it comes to rate cuts, nothing is certain until the Reserve Bank of Australia (RBA) wraps up its board meetings.

We saw this in July, when a long line of pundits predicted a rate cut was almost a sure thing, only to see the RBA keep rates on hold due to concerns about an uncertain economic outlook.

The good news is this hasn’t stopped tens of thousands of home owners negotiate a personal rate cut by refinancing.

Refinancing ramps up in 2025

Recent figures from property settlement firm PEXA, show refinance volumes have rebounded, rising 12.5% over the year to March 2025 as borrowers chase lower rates.

That’s seen thousands of home owners land a rate cut of their own, with the Australian Bureau of Statistics reporting over 65,000 home loans were refinanced in the first three months of 2025 alone.

But it seems many are still missing out.

survey by Compare the Market shows 65% people who’ve had the same home loan for 3-plus years haven’t refinanced.

And in today’s home loan market, a loan that was competitive back in the day may no longer be such a great match for your needs.

Why think about switching?

As we saw this month, there are no guarantees the RBA will bring future rate relief.

That’s why it can be important to take a front-foot approach by getting in touch with us to compare your home loan options.

This especially applies if you’ve had the same loan for several years, because there’s been plenty of action in the mortgage market lately.

Mozo reports that some lenders have introduced rate cuts on their own, others have held back on official rate cuts, and a growing number are offering fixed-rate options starting with a ‘4’ (now there’s something we haven’t seen for a while!).

Is refinancing right for you?

Loyalty is a great quality – just perhaps not when it comes to home loans.

Sticking with an old home loan can mean paying a higher interest rate than necessary, or missing out on improved loan features.

If you and your loan have been together a while, call us to see if your home loan is still suitable for your needs – and if not, we can help you find one that is.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How to make an offer on a home

Finding the property that’s right for you and your budget is an exciting milestone! But what happens next? We explain how to make an offer and seal the deal.

Most of us buy a home only a handful of times in our lifetime.

So it’s not surprising that plenty of buyers – from first-timers to home owners who purchased several years ago – are uncertain about the buying process.

If you’re in the dark about how to make an offer on a property, read on as we break down the steps that can take you from house hunter to proud owner.

1. Talk to us first

Before you make an offer on a home, you should be confident that you can actually follow through with the purchase.

That’s why it’s important to call us first.

We can explain your borrowing power, which together with your deposit, sets your buying budget.

While some people prefer to have home loan pre-approval lined up before they start home-hunting, it’s not absolutely necessary.

Once you’ve found the right property, however, you’ll likely want to get the ball rolling on the finance side of things straight away.

That way your home loan can be ready in time for settlement.

2. Ask for a copy of the contract

When you see a place you’re keen to buy, you can ask the selling agent for the sale contract.

Then you can have it checked out by your solicitor or conveyancer.

This shouldn’t take long. But it can alert you to any conditions that work in the seller’s favour and not yours.

Any out-of-the-box conditions, such as a quick settlement, may not be a deal breaker – they may even be used as a bargaining chip in your price negotiations.

3. Know the market

By now you will likely have checked out plenty of properties and carefully researched the local market.

This will give you an idea of what similar homes in the area are selling for.

These insights can give you an idea of what is a reasonable offer for the home you’re thinking of buying.

4. Consider trying for a discount

Even if you think the property is fairly priced, it could still be worth trying for a discount.

As a guide, CoreLogic says sellers are currently accepting a median discount of about 3.4%.

On a home priced at, say, $600,000, that can add up to a saving of $20,400.

But it does depend on the local market. Some areas are hotter than others.

The main point is to stay within your buying budget.

5. Put your offer in writing

When you’ve arrived at a price you’re comfortable with, put your offer in writing. It shows you’re a serious buyer.

What follows may be some to-and-fro in price negotiations.

When you and the seller reach a price you’re both happy with, you may be asked to pay a small holding deposit, often around 2.5% of the purchase price.

This is not the same as the 10% you will usually be asked to pay when you and the seller sign the contract of sale to cement the purchase.

Be sure to call us when your offer is accepted. We can confirm details of the property with your home loan lender and begin the process of finalising your loan.

6. Exchange contracts

It can take a few days for the sale contract to be finalised.

Use this time to check with the selling agent how you should pay the 10% contract deposit.

When the contract is ready, you and the seller each sign a copy, then swap – or ‘exchange’ – contracts. Now’s the time to hand your 10% deposit to the selling agent.

As your broker, we’ll stay in touch throughout the process.

7. The road to settlement

It generally takes 30–90 days for the sale to settle – that’s when the property is transferred into your name.

During this time, we’ll work behind the scenes to help ensure your home loan is ready to go on settlement day.

And when you receive the keys to your new home, we’ll be in touch to help you celebrate!

Want to find out more?

Buying a home can seem complex (and scary). Rest assured though that we can help break down the steps involved.

Call us to find out other ways we can help streamline your home-buying journey.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.