Borrowing capacity is one of the first things anyone wants to know when considering a mortgage.
How much can I borrow is a top Google search term and many people tap into the online mortgage calculators to understand how much they can borrow.
However, as I’ve discussed previously, an online mortgage calculator will only give you a rough guide on your capacity.
As such, many borrowers turn to a mortgage broker to maximise the amount they can borrow, or to ensure they are getting the best home loan for themselves.
In 2019, the Mortgage and Finance Association of Australia estimated that mortgage brokers claimed almost 60 per cent of the home loan market.
On average, mortgage brokers have around 34 lenders on their panel – that’s 34 different financial institutions that can lend money for a mortgage.
Each lender may offer multiple products and it’s the mortgage broker’s role to understand all these products and how they may best suit the borrower.
“It is this additional choice (in lending products) that adds competition in the market,” a 2018 Deloitte report, ‘The Value of Mortgage Broking’, states.
The popularity of mortgage brokers stems from the fact that they provide a valuable service – helping customers to choose the best loan for their unique situation.
A mortgage broker knows a vast array of products from the myriad lenders in Australia (not just the big four), far more than most people have time to research when beginning their home loan journey.
And so, a trusted expert advisor, the mortgage broker, is a valuable tool for more than half of all Australian borrowers.
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Brokers and borrowing capacity
Mortgage brokers have expertise across many financial products on the market and this means they can help with loan application details that may result in increased borrowing capacity.