When buying a property, it’s crucial to understand your borrowing power. Borrowing power is how much a lender is willing to lend you based on your financial situation. In Australia, borrowing power varies depending on factors including your income, expenses, credit history and the lender you choose. Whether you’re a first-time buyer or an experienced investor, knowing how to maximise your borrowing power can make a big difference in securing the right property.
Borrowing power is a key factor in your ability to enter the property market. In this buyer’s guide, we’ll explain how borrowing power works, show how family assistance or a guarantor can help you get into the market sooner and outline how we can support you throughout the process.
What is borrowing power?
Borrowing power refers to the amount a bank or lender is willing to lend you to purchase a property. Borrowing power is based on your:
- Income and job stability
- Existing debts and liabilities
- Credit history and credit score
- Monthly living expenses
- Number of dependents or financial commitments
Lenders use this information to calculate how much you can afford in repayments and then offer a loan amount accordingly.
Limited borrowing power can restrict your ability to buy in your preferred area or secure your ideal home, which is where external support can make a difference.
Can Family Help Boost My Borrowing Power?
Yes, family can play a significant role in helping buyers get onto the property ladder, particularly in high-cost markets like Sydney, Melbourne or Brisbane.
One of the most common ways this happens is through a guarantor loan.
What Is a Guarantor Loan?
With a guarantor loan, close family members can use the equity in their property to back part of your home loan. This usually covers up to 20% of the purchase price, which can make lenders more comfortable approving your loan.
This added security can:
- Boost your borrowing power
- Allow you to buy with a smaller deposit (5–10%)
- Help you avoid Lenders Mortgage Insurance, which can save thousands
- Get you into the market sooner, without needing to save a full 20% deposit
A guarantor takes on financial risk. If you can’t repay your loan and default, the guarantor is liable for the guaranteed portion. Both parties should seek independent legal and financial advice before proceeding.
Other Ways Family Can Help You Buy a Home
If a guarantor loan isn’t the right fit, there are other options where family can assist:
- Gifted deposit: A family member gives you money towards your deposit, usually with a statutory declaration confirming it’s a gift, not a loan.
- Family loan: A private loan between you and a relative, often with flexible or interest-free terms.
- Joint ownership: Co-buying a property with a parent, sibling or another family member.
Each approach has its pros and cons and can affect your loan eligibility, tax obligations and future property ownership. Always seek professional advice to understand what’s best for your situation.
How Moove Buyers Agents Can Help You Buy
At Moove Buyers Agents, we understand that buying a property isn’t just about finding the right home—it’s about aligning your budget, borrowing power and long-term goals. Whether you’re buying independently, using a guarantor, or receiving family support, we provide expert guidance to help you make confident, well-informed decisions.
Here’s how we support you throughout the journey:
- Personalised advice: Guidance designed around your finances, lifestyle and future goals
- Off-market and pre-market access: Exclusive access to homes you won’t find listed publicly.
- Comprehensive research and due diligence: Thorough research and guidance to help you make the right purchase without overpaying.
- Expert negotiation: We handle negotiations to get you the best price and contract terms.
- Seamless collaboration: We work closely with your mortgage broker, lender, or financial adviser to keep everything on track.
Ready to Make Your Moove?
If you’re planning to use a guarantor, accept family support or want to understand how much you can borrow, we’re here to help.
Book your free strategy call today and discover how we can help you buy the right property.
