info_outline
Got a $20,000 Credit Card Limit? You Might Be Stunned By How Much It Affects Your Borrowing Power
09/03/2026
Got a $20,000 Credit Card Limit? You Might Be Stunned By How Much It Affects Your Borrowing Power
Why is your home loan borrowing capacity lower than you expected? In this episode, we break down how Australian lenders actually calculate borrowing power and the hidden factors that can dramatically reduce how much the bank is willing to lend you. Brad is joined by Sarah from Wisebuy Home Loans to unpack the real numbers behind home loan serviceability, including the 3% assessment-rate buffer, living expenses, HEM, credit card limits, car loans, Buy Now Pay Later, HECS/HELP debt, dependants and different types of income. One of the biggest examples: a $20,000 credit card limit can reduce your borrowing capacity by roughly $95,000–$110,000, even if the card has a zero balance. They also explain why an interest rate of 6.14% can be assessed by the bank at 9.14%, why online borrowing calculators can give you a very different result from a lender, and how overtime, casual income, FIFO work and self-employed income are treated when you apply for a mortgage. In this episode: How banks calculate home loan borrowing capacity Why lenders use a 3% serviceability buffer How credit card limits can reduce borrowing power How HEM and living expenses are assessed How HECS/HELP debt affects borrowing capacity The impact of dependants, car loans and Buy Now Pay Later How overtime, casual, FIFO and self-employed income are treated Why different lenders can give you very different borrowing results Practical ways to improve your borrowing capacity before applying Timestamps 0:00 Intro 0:40 Why Your Borrowing Capacity Is Lower Than Expected 1:16 How Banks Calculate Your Borrowing Capacity 2:20 The 3% Assessment Rate Buffer Explained 3:20 $700K Loan: Actual vs Assessed Repayments 3:54 How Liabilities Reduce Your Borrowing Power 4:28 How Credit Cards Can Cost You $100K 5:44 Car Loans and Borrowing Capacity 6:04 How Dependants Affect Your Home Loan 6:35 HECS/HELP Debt and Borrowing Capacity 7:38 HEM and How Banks Calculate Living Expenses 9:16 How Casual Income Is Assessed 9:59 How Banks Treat Overtime Income 10:44 Seasonal Income and Home Loans 11:06 FIFO Income and Borrowing Capacity 11:52 Self-Employed Home Loan Assessment 12:57 How to Increase Your Borrowing Capacity If you're a first home buyer in Australia, preparing for pre-approval or wondering why the bank says you can borrow less than an online calculator suggests, this episode explains exactly what lenders are looking at — and what you may be able to change before applying for a home loan. For help understanding your borrowing capacity or home loan options, contact Sarah at Wisebuy Home Loans
/episode/index/show/439e5656-9e59-4f6d-a930-15efc1c0aab2/id/42727140
