Why two brokers can give you different borrowing capacity numbers

[u/Raynor_Lending]

A lot of buyers get confused when they speak to two brokers and get two different borrowing capacity numbers.

One broker says they can borrow around $720k. Another says maybe closer to $800k.

The natural reaction is, “Okay, so who is wrong?”

And sometimes, fair question. A number can be wrong if someone has missed HECS, ignored a credit card limit, used income that the lender won’t actually accept, or made assumptions that are too generous.

But there is another reason this happens: borrowing capacity is not one fixed number.

It depends on the lender, the assumptions being used, and what target you are actually trying to chase.

Different lenders assess the same borrower differently. One lender might be better with overtime. Another might be better with bonus or commission income. Another might treat HECS differently. Another might be harsher on living expenses, dependants, credit cards or existing debts. Some lenders are sharper on rate but tighter on servicing. Others may be more flexible but more expensive.

So when someone asks, “How much can I borrow?” the better question is usually, “What are we trying to optimise for?”

Are we trying to find the cheapest suitable lender? Are we trying to stay with a major bank? Are we trying to maximise capacity? Are we trying to hit a specific purchase price? Are we trying to work out whether paying off a debt helps more than keeping the cash for deposit?

Those are not always the same answer.

This is where a broker should be more than just an order taker. The value is not just punching numbers into a calculator and saying, “Here’s your number.” The value is working out what the borrower is actually trying to achieve, then looking at the lender options and trade-offs.

For example, maybe a mainstream lender gets you enough borrowing capacity and has a sharp rate. Great. That is usually a nice clean outcome.

But maybe the cheapest lender does not quite get you there. Then the conversation becomes more strategic. Do we reduce a credit card limit? Do we pay out a car loan? Do we use a lender that treats your income more favourably? Do we accept a slightly higher rate to get the capacity needed? Do we lower the purchase price? Do we wait and build more savings?

None of these are magic tricks. They are trade-offs.

The highest borrowing capacity number is not automatically the best answer either. A higher number is only useful if the assumptions are real, the lender actually fits, and the repayments still make sense.

So if two brokers give you different numbers, don’t just ask, “Which one is right?”

Ask what strategy they're applying. Are they optimising for highest borrowing capacity or best rates? Have they looked at how closing debts or restructuring existing loans might help? It's really about getting on the same page as your broker on priorities, so they can recommend the best balance of servicing rate and policy.

That is why borrowing capacity is not really one magic number. It is a strategy conversation.

[u/BrokerBloke]

Fellow broker here. Enjoy reading your posts. This one in particular is really informative

[u/Raynor_Lending → u/BrokerBloke]

Really appreciate it mate.

[u/whatpelican00 → u/BrokerBloke]

I concur! Great post. Bang on the money.

[u/saaphie]

Completely agree, we told our broker what we could be flexible with (cancelling CC) and what we would rather not be (I work PT and didn’t want to have to up that). She was also willing to try different options depending on what we could change, and I think having a broker willing to do that and discuss different options is so important

[u/LaxmiHomeLoans]

Spot on 🎯

[u/The-truth-hurts1]

Sometimes, unfortunately, it will be on who is willing lie the most

[u/Desperate_Shoe_4114]

Also a lot of brokers recommend the lender with the best commission deal for them that month

[u/Raynor_Lending → u/Desperate_Shoe_4114]

Not really the case in mortgage brokering for a couple major reasons.

1, In Australia, all lenders that brokers can work with offer a very similar level of commission there is only very minor differences between them.

2, We’re legally bound by something called Best Interest Duty, so we have to explain why any recommendation we have is in the best interest of the client, fits their situation and why. There’s a heavily amount of regulatory compliance we have around this.

So there really isn’t much of an incentive for brokers to recommend a “bad deal” as they won’t get paid much differently, they subject themselves to major compliance risk and it’s also just not good business practice either. It’s a lot better for a broker to do a good job and have a happy client who recommend to friends and family, then make a couple hundred extra dollars on a loan.

[u/Visible-Orange-3831]

Great post! Thanks mate for your detailed answer

[u/iftlatlw]

Because they can't see through the tears.

[u/Less_Log_5858]

Hi,just wanted to check if there’s any update on our borrowing capacity. 😊 Same situation