Published 14 June 2026
By Dreamlend Finance
It’s the first question almost everyone asks, and the honest answer is: it depends. Not because brokers like being vague, but because borrowing power is built from many moving parts, some of which are within your control. Here’s how lenders actually work it out, and what you can do to put your best foot forward.
It’s the question that sits behind every property search, every open home, every late-night scroll. What can I actually afford?
It’s a fair question. It’s usually the very first one. But here’s what surprises most people: there’s no single answer. Ask five different lenders and you can get five genuinely different numbers, sometimes tens of thousands of dollars apart. Same income, same expenses, same person.
So instead of giving you a number we can’t responsibly give without knowing your situation, let’s do something more useful. Let’s walk through what actually drives borrowing power, why lenders disagree with each other, and the practical housekeeping that can genuinely improve your position before you apply.
Every lender runs a version of the same assessment. They look at what’s coming in, what’s going out, what you owe, and what you’ve saved. In practice, that means:
That last one matters more than people realise. Lenders don’t assess you at today’s rate. They add a buffer on top to make sure you could still manage if rates moved. It’s a safety check, and it’s one of the main reasons the number a lender offers can feel lower than what an online calculator promised you.
Lenders all follow the same broad rules, but they apply them differently. One lender might take 80% of your overtime into account, another takes all of it. One treats your HECS debt harshly, another is far more relaxed about it. Some are generous with bonus income, others want two years of history before they’ll count a cent.
This is exactly where a broker earns their keep. It’s not about finding a lender who’ll “say yes to anything.” It’s about knowing which lender’s policy actually fits the shape of your income and your life, so your application lands where it’s strongest.
Here’s the part most people don’t hear about until it’s too late: lenders look backwards before they look forwards. The three to six months before your application matter a lot, and a little preparation can make a genuine difference.
Live like the loan already exists. Lenders review your recent spending to understand your habits. If your statements show extravagant holidays, big-ticket splurges and accounts running on empty, it’s harder to make the case that a mortgage will fit comfortably. Plenty of people say “we’ll rein it in once we have the loan,” and they probably would. But lenders assess the spending they can see, not the discipline you’re promising. Three to six months of steady, sensible spending tells a much stronger story.
Keep your credit history clean. Paying bills and repayments on time, avoiding multiple credit applications in a short window, and closing unused credit cards can all help. A card with a $10,000 limit reduces your borrowing power even if the balance is zero, because lenders assess the limit, not the balance. And if your credit history has a few scratches on it? It doesn’t automatically rule you out. Some lenders are far more flexible than others. It just means the lender choice matters even more, and that’s exactly where we come in.
Tidy up your debts where you can. Car loans, car leases and buy now pay later accounts all chip away at your borrowing power, often by more than people expect. A $700-a-month car lease can reduce what you can borrow significantly with some lenders. That doesn’t mean you need to be debt-free to buy, but paying down or closing what you can before we apply for you (and avoiding new commitments in the lead-up) keeps more of your borrowing power working for the home, not the car.
Show a consistent savings pattern. A deposit that has grown steadily over time tells lenders you can manage money week to week. It’s often viewed more favourably than a lump sum that appeared overnight, even when the lump sum is bigger.
Beyond the housekeeping, there are some genuine structural options worth knowing about. Not all of them will suit everyone, but the right one can change your timeline significantly.
First Home Super Saver Scheme (FHSSS). This lets eligible first home buyers make voluntary contributions into super (often from pre-tax income) and later withdraw them, plus associated earnings, for a deposit. Because of the tax treatment, many people can build a deposit faster inside super than in a regular savings account. This is one worth looking into early, sometimes years before you’re ready to buy. Check the ATO’s current details for contribution caps and withdrawal rules, and factor it into your savings strategy sooner rather than later.
The Australian Government 5% Deposit Scheme. Eligible buyers can purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance. Since October 2025 there are no income caps or waitlists, which has opened it to far more people. We’ve covered this one in detail in its own article on our blog.
Profession-based LMI waivers. Some lenders waive LMI for certain professions, like medical practitioners and select professional services roles, even with deposits below 20%, sometimes as little as 5%. It’s one of the first things we check for clients in eligible fields, because the savings can run into the thousands.
Family security guarantee. Sometimes called a guarantor loan, this is where a family member (usually a parent) uses equity in their own property as additional security for your loan. It can help you buy with little or no deposit and avoid LMI, without your family handing over any cash. The guarantee can often be released later once you’ve built enough equity. It’s a powerful option, but it does carry real obligations for the guarantor, and we make sure everyone involved understands exactly what they’re signing up for before going ahead.
Deposit boost loans. A newer type of product that has emerged in the market, where a second loan effectively tops up your deposit so you can buy sooner without LMI. It can suit strong-income earners who haven’t had time to build a full deposit, but it does mean an additional repayment, so the overall structure needs to genuinely stack up. This is one where proper guidance matters, and something we can help you work through.
Other lender-specific options. Some lenders offer 90% purchases with no LMI, and others offer extended loan terms of 35 to 40 years to help reduce monthly repayments. These are exactly the kind of details we research for you, but it’s also useful to know there’s far more flexibility out there than the standard 20% deposit story suggests.
One thing we say to almost everyone: just because a lender will give you $750,000 doesn’t mean you should take it.
Your maximum borrowing power is a ceiling, not a goal. The better question is what repayment level lets you live comfortably, handle the unexpected, and still enjoy your life. The best loan isn’t the biggest one. It’s the one you barely have to think about.
Borrowing power isn’t a fixed number you either have or don’t. It moves with your spending habits, your debts, your deposit strategy and which lender assesses you. A bit of preparation in the months before you apply can shift the outcome meaningfully.
At Dreamlend Finance, we help buyers across Melbourne and Australia understand where they stand, what’s realistic, and what could improve their position before applying. With access to a panel of over 40 lenders, each with their own policies and risk appetite, we know where to place your application for the strongest outcome. No jargon, no pressure. Just a clear picture and a proper plan.
Book a free chat with Dreamlend Finance and let’s work through it together.
Finance that helps you reach your dream.
Dreamlend Finance Pty Ltd (ABN 25 689 387 773) is a Credit Representative (No. 571724) of Finsure Finance & Insurance Pty Ltd (ACL 384704).
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