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9 Ways to Boost Your Borrowing Power

With rising interest rates, maximising your borrowing capacity is essential. Here are nine practical strategies to improve your borrowing power and position yourself for a smoother loan approval process.

1. Keep Your Credit Score Strong

Pay your bills on time and avoid unnecessary credit applications to maintain a solid credit score.

2. Increase Your Income

Explore ways to boost your income, whether through a salary increase, freelance work, or generating rental income.

3. Save a Bigger Deposit

A larger deposit can improve your loan-to-value ratio (LVR) and may help you avoid paying Lenders Mortgage Insurance.

4. Reduce Monthly Spending

Lenders carefully evaluate your expenses, so cutting back on discretionary spending can make a significant difference.

5. Lower Existing Debt

Repaying outstanding loans and credit card balances reduces your financial obligations, increasing your borrowing potential.

6. Reduce Unused Credit Limits

Lowering credit card limits can enhance your borrowing capacity in the eyes of lenders.

7. Choose the Right Loan Type

Loan types such as longer-term or interest-only options may improve affordability, making your application more attractive.

8. Consider Joint Borrowing

Combining incomes with a partner or co-borrower can significantly boost your borrowing power.

9. Organise Financial Documents

Ensure your financial records are up to date. A clear and organised presentation of your financials can streamline the lending process.

Taking these steps can help you improve your borrowing position and open doors to better property opportunities. Stay tuned for more insights in Mortgage Matters!

Spring Auction Surge: Higher Listings, Stronger Clearance Rates

As the spring selling season nears its conclusion, auction volumes have surged while clearance rates hold steady, reflecting a resilient property market despite economic pressures.

National Trends

- Current clearance rate: 59.6% (up from 55.5% last week, but down from 63.3% last year).

- The increase in auction listings hasn’t significantly affected clearance rates yet.

Sydney Market Snapshot

- Clearance rate: 69.3% (up from 67.6% last week and 67.2% a year ago).

- Median price: $1,740,000 (up 4.5% year-on-year).

Regional Highlights:

- Northern Beaches: Leading with an 82.4% clearance rate.

- North West: Lagging at 43.5%.

Notable Sales in Sydney:

- 15 Warrawee Ave sold for an impressive $8,200,000.

- 7/15 Blaxcell St sold for $382,200.

Melbourne Market Snapshot

- Clearance rate: 61.7% (down from 63.5% last week and 64.5% last year).

- Median price: $987,500 (a sharp 15.2% drop year-on-year).

Regional Highlights:

- Northern Region: Recorded the highest clearance rate at 68.5%.

Notable Sales in Melbourne:

- 91 Merton St sold for $4,440,000.

- 411/16 Clyde St sold for $205,000.

Looking Ahead

With high auction volumes expected to continue, clearance rates may come under pressure. However, the robust performance in certain regions indicates pockets of strength in the market.

Rising Interest Rates, Fewer Listings... So Why Are Investor Loans Surging?

Despite rising interest rates and a tighter supply of investment properties, new investor loans are up by 18.8% nationwide. CoreLogic ’s latest research sheds light on the factors driving this surge and what it means for the property market.

National Trends

Investor loans are growing rapidly in high-growth states such as South Australia, Queensland, and Western Australia. However, these regions face below-average property listings, intensifying competition. Meanwhile, states like New South Wales, Victoria, and Tasmania have seen more investor listings.

Shifting Investor Profiles

The type of investor is changing. A growing number of first-home buyers are entering the market as investors, viewing investment properties as a more affordable entry point to homeownership. At the same time, there may be fewer highly-leveraged investors, reflecting tighter lending conditions and rising costs.

Regional Insights

• Victoria: Investors face challenges due to high holding costs and subdued capital growth.
• Tasmania: Lower property values may be prompting some investors to sell and exit the market.

Demand and Market Outlook

Investor demand remains high, but strategies are evolving. While investor loans are surging now, there are signs that new loan commitments may taper off by year-end if interest rates stay elevated longer than anticipated.

The dynamics of the Australian property market continue to shift, creating opportunities and challenges for investors. Stay tuned to Mortgage Matters for updates on how these trends unfold.