How Much Can I Borrow?

So, you have an idea of the area you would like to buy in. You have decided on the paint scheme for your bathroom and you know the product code for the laminate that you would like fitted on the bench in your dream kitchen. But do you know exactly how much you can afford when it comes to buying your first home?

Getting a home loan was once a matter of arranging a meeting with your local bank manager and going through the sums with them in person. Now, thanks to a wealth of technology and an ever-expanding mortgage industry, there are literally hundreds of home loan products available with the click of a mouse. You can also use online tools, such as the Commonwealth Bank's home loan calculator, to help you in working out how much you can afford.

The Commonwealth Bank's home loan calculator allows you to calculate your choice of the approximate amount you can borrow, your regular loan repayment, or the term of your home loan if you already know the amount of your loan and repayments.

You can use the Commonwealth Bank home loan calculator to select from their range of home loan products and see how each product affects your home loan repayments.

While tools such as the Commonwealth Bank home loan calculator can be useful in approximately your home loan costs, they are often overly simplistic and should be us as a guide only.

There are a number of factors that lenders such as the Commonwealth Bank take into consideration when assessing how much you can borrow. Your monthly income is important, as obviously the more you earn, the more you are hypothetically able to repay, and so the more you can borrow.

The Commonwealth Bank, and other home loan lenders, would also take into account your living expenses, current debts such as car loans or credit cards, whether you have children and generally your serviceability, which means your ability to repay the loan.

Online home loan tools such as home loan calculators are widely available online. You should use these only as tools for estimations; your financial broker can help you with the real figures. Finally, bear in mind that the lenders with the most impressive technology are the ones with the biggest online marketing budgets, not necessarily the ones with the best home loan products so always shop around.

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