Can mortgage brokers get you a bigger mortgage?

Mortgage brokers can provide valuable support on your home loan journey. By looking closely at your financial situation, a broker may be able to recommend home loan offers that closely suit your needs and goals, which could help increase your borrowing capacity and buying power.

How much can you borrow?

The maximum amount of money you can borrow from a bank or mortgage lender for a home loan will depend on a wide variety of factors, such as:

• Your income
• Your expenses
• Your children and dependents
• Whether you’re buying a home to live in or an investment property to rent out
• Your liabilities (e.g. credit cards, other loans)
• Your saved deposit
• Your credit history

Using this information, a bank or mortgage lender will calculate how much you could comfortably afford to pay for a home loan without too high a risk of mortgage stress. This will determine the maximum amount they may be willing to lend you.

A borrowing power calculator may be able to help you estimate how much a bank or mortgage provider may be willing to lend you.

Keep in mind that many lenders will prefer that you can pay a deposit of 20 per cent of the property value when you apply for a mortgage. Some lenders will let you apply with a smaller deposit of 10 or even 5 per cent, but you may need to budget for Lender’s Mortgage Insurance (LMI) or apply with assistance from a guarantor and/or government programs. These could also affect the maximum amount you can borrow from the lender.

How can a mortgage broker help?

Mortgage brokers are home loan experts who work with banks and other mortgage providers every day. As such, they are very familiar with the eligibility criteria and application processes for different mortgage lenders, as well as any government grants or incentives that you may be eligible for.

A skilled broker can look at your financial situation and look for areas where small changes could make big differences to your mortgage application. They can find the lenders whose home loan eligibility criteria you’re more likely to be able to fulfil, and can also help you complete your home loan application to ensure all the required information is provided, potentially improving your chances of approval.

Additionally, some brokers may have access to special mortgage deals that are exclusive to brokers and aren’t typically advertised to everyday Australians. Brokers can also negotiate with lenders on your behalf, which could see you benefit from discounted interest rates, waived fees, or access to other features and benefits. Depending on your situation, these could potentially allow you to borrow more to purchase your property.

Keep in mind that just because a mortgage broker helps you get home loan pre-approval, that doesn’t mean you’re guaranteed to be able to borrow that amount. Most pre-approvals are granted subject to valuation, meaning the lender will need to get the property you’re purchasing valued before they’ll sign off to ensure it meets their Loan to Value Ratio (LVR) requirements.

Just like when you compare home loans, it’s important to compare mortgage brokers before deciding who you’ll be applying with. Finding a broker you can trust that is familiar with lenders in your area can make a big difference to your mortgage application.

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