If you’re thinking about buying a property in 2025, one of the first questions you’ll likely ask is: “How much can I borrow?” It’s a simple question with a slightly more complex answer—because borrowing power depends on a range of personal and financial factors.

In this article, we’ll break it down clearly so you know what to expect, how to improve your borrowing capacity, and why speaking with a broker like Micah can help you get clarity and confidence from the start.

What Is Borrowing Power?

Your borrowing power is the amount a lender is willing to let you borrow to purchase a home. It’s not a fixed number, and different lenders will calculate it in slightly different ways. That’s why two people with the same income might be offered different loan amounts depending on their circumstances—and the lender they choose.

Key Factors That Affect How Much You Can Borrow

Lenders assess your ability to repay a home loan based on a variety of factors, including:

1. Your Income

  • Salaried employees: Regular income from full-time or part-time work is considered stable.
  • Self-employed applicants: You’ll usually need to show at least 1–2 years of income via tax returns and financial statements.
  • Other sources: Rental income, bonuses, commissions, and government payments may also count.

2. Your Living Expenses

  • Lenders use a mix of actual and benchmark expenses (such as the Household Expenditure Measure) to estimate how much you spend on necessities, utilities, subscriptions, childcare, groceries, and more.

3. Your Existing Debts

  • Car loans, credit cards (even unused ones), personal loans, HECS/HELP debt, and BNPL services like Afterpay all impact your borrowing power.
  • Tip: Reducing credit limits and closing unused accounts can help.

4. Your Deposit

  • A higher deposit generally means you can borrow more, avoid Lenders Mortgage Insurance (LMI), and access better rates.
  • However, some borrowers can still secure loans with as little as 5% deposit—especially first home buyers using government schemes.

5. Interest Rates

  • Lenders “stress test” your application by assessing whether you could still afford the loan if interest rates were 2–3% higher than today’s rate.

6. Loan Term

  • Longer terms (e.g., 30 years) reduce repayments and may increase your borrowing capacity—but you’ll pay more interest over time.

A Quick Example

Let’s say you’re earning $95,000 per year with no other debts, and you have a $50,000 deposit saved. Based on average lending criteria in early 2025, your borrowing power might range between $500,000 and $650,000, depending on your living expenses and the lender.

But someone with the same income and a $10,000 personal loan could see their borrowing capacity drop by $50,000 or more.

How to Increase Your Borrowing Power

Here are a few smart ways to improve your position before applying:

  • Pay down high-interest debts
  • Reduce credit card limits
  • Track and reduce spending for 3–6 months before applying
  • Save consistently and show proof of genuine savings
  • Avoid new credit applications in the lead-up to applying

How Is Borrowing Power Calculated in 2025?

In 2025, lenders are taking an even closer look at living expenses and discretionary spending. As interest rates stabilise and serviceability buffers remain around 3%, lenders want to see responsible financial behaviour—not just income.

Also, with property prices rising again in many Australian markets, understanding your borrowing limit early can help you refine your property search and avoid disappointment.

Why It Pays to Use a Mortgage Broker

Every bank and lender has its own credit policy, assessment criteria, and appetite for certain borrower types. One bank might approve you for $700,000, while another caps you at $550,000.

At Micah, we help you:

  • Compare over 30 lenders to find the one that fits your needs
  • Structure your loan for long-term success, not just short-term approval
  • Plan strategically, especially if you’re self-employed or have complex income

Tools & Resources

Want a rough idea of your borrowing power? Try the Money Smart Borrowing Power Calculator 

But remember—online calculators are just a starting point. The only way to get an accurate picture is to speak with an experienced broker who can assess your full financial picture.

Final Thoughts

How much you can borrow in 2025 will depend on your income, expenses, debts, deposit, and the lender you choose. But the good news is: you don’t need to work it out alone.

At Micah Financial Solutions, we’re here to guide you through the process with honesty, clarity, and care—so you can move forward with confidence.

Ready to find out what’s possible?

Book a free chat with a Micah broker today. We’ll help you understand your borrowing capacity and plan your next steps—no pressure, just personalised advice.

Need expert mortgage advice?


At Micah Financial Solutions, we’re committed to providing personalised, honest, and strategic support—whether you’re buying your first home, upgrading, refinancing, or investing. As your trusted Mortgage Broker in Epping and Carlingford, we’re here to help you make confident, well-informed decisions every step of the way.