Greater Bank guide to budgeting
We could all use a little help managing our money – see how we can help.
Know your budget
Before even thinking about borrowing any money, you need to make sure you’re going to be able to pay it back. This is where your budgeting skills come into play.
Take a closer look at your incomings and outgoings, and figure out how much per week or month you’ll be able to commit to in the form of repayments. Give yourself a range, with a high and low figure to work from.
If you’ve never set up a budget before, or it’s been a while since you last wheeled out the spreadsheet, why not check out the Greater Bank guide to budgeting. We break it down into easy to follow steps so you can get the info you need sooner!
Gather information
Once you know exactly how much you can commit to in repayments, you’ll need to make sure you’ve got all the other info banks will usually require to provide you with an estimate for your borrowing power.
Have the following info handy as a basic guide:
Loan Details
Details such as the number of applicants, and the number of children dependant on applicants.
Liabilities
Your outgoings such as loan repayments and credit card limits.
Assets
Your primary income, any rental income, and any other income you regularly receive.
Take advantage of online tools
The great thing is, you don’t need to move heaven and earth to actually generate an estimate for your Borrowing Power from your bank. Online calculators have put the branch in your back pocket, meaning that once you’ve got all the info you need, you can find out your Borrowing Power at the touch of a button.
The Greater Bank Borrowing Power Calculator is a great way to discover how much you may be eligible to draw on, and is flexible enough to provide the same great experience regardless of your choice of device. Whether on desktop PC, tablet or mobile, our calculator is easy to use, and even lets you get the loan process started by making an enquiry if you like what you see.
Speak to an expert
Once you’ve generated your Borrowing Power estimate using an online calculator, you’re almost there. If you’re seriously considering your next property, and want a 100% accurate picture of your genuine Borrowing Power, it’s always best to speak to an expert.
If you’ve found the right house for you, having a conversation with an experienced lender will allow your bank to consider all your details, and let you know for sure if you’re eligible for a loan that matches up to your property price-range.
They can even provide you with pre-approval so that when it comes to making an offer, you can do so with confidence.
Frequently asked questions
What is my borrowing power?
Your borrowing power is the amount that a lender is willing to give you in the form of a home loan. This will be calculated using both the lender's own rules and risk appetite, as well as the income, expenses, debt-to-income ratio and credit history of the loan applicant.
What affects my borrowing power?
Primarily, your borrowing power is determined by getting an overall picture of how favourable you are as a candidate for a loan.
This picture comes together by taking into account your income level, your current expenses, how much debt you are currently servicing, and your relationship with credit in the past.
What is a borrowing capacity?
Borrowing power or borrowing capacity are interchangeable terms.
They refer to the amount that a lender is willing to loan you, based on their rules and risk appetite, and your overall financial circumstances.
What can I afford to borrow?
A very wise question. Many loan applicants look at their borrowing power as communicated by a lender, and think that this is the amount they need to borrow.
It's wise to think in terms of what you can afford to borrow. That is to say - how much debt can you take on that won't have a negative impact on your life, regardless of whether your financial circumstances remain the same, or change in the future.
You can calculate your borrowing power below using our handy calculator.
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Greater Bank, part of Newcastle Greater Mutual Group Ltd ACN 087 651 992, Australian Financial Services Licence/Australian credit licence 238273
++$2,000 cashback for loans ≥$250,000 or $2,500 cashback for loans ≥$500,000. Only one (1) Cashback Payment per eligible loan, and for first eligible loan only. Not available in conjunction with any other promotional payment. Offer may be varied or withdrawn at any time. See the full Cashback Offer Terms and Conditions. Terms, conditions, fees, charges and credit criteria apply.
~At the end of the fixed rate period customers can chose to re-fix their loan for another fixed rate period or let the loan revert to the applicable variable interest rate based on the loan and repayment type.
^Comparison rate is based on $150,000 over 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
#Discounted rates include a discount on Home Loans of $150,000 or over and for owner occupied Home Loans with an LVR 80% or below and for investment Home Loan with an LVR 80% or below and apply to new borrowings only. Discounted rate not available for Line of Credit facilities.
+Additional costs may apply if your loan has a fixed rate.
All new interest-only home loans, attract a 0.10% p.a. margin above the applicable Principal and Interest base rate. All new Line of Credit home loans, attract a 0.10% p.a. margin above the applicable Line of Credit base rate. The all-up interest rate which includes any margins, will be set out in your credit contract. View our Terms and Conditions.
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