10 Tips to Improve Your Borrowing Capacity (and Why Refinancing Can Help)
If you’ve ever wondered how lenders decide how much you can borrow — or felt surprised that your borrowing capacity isn’t higher — you’re not alone.
Borrowing capacity isn’t a fixed number. It changes over time, and for many homeowners, refinancing their existing loan can play a big role in unlocking more flexibility.
Here are ten practical tips to help you understand borrowing capacity — and how to improve it.
Tip 1: Don’t Assume Borrowing Capacity Is Just About Income
While income is important, lenders look at the full picture. Your expenses, existing debts, and current loan structure all influence how much you can borrow.
This is why two people earning the same income can have very different borrowing capacities.
Tip 2: Review Your Current Home Loan Regularly
Older loans often come with higher interest rates or inefficient structures.
Because lenders assess repayments at higher “assessment rates,” an outdated loan can reduce borrowing capacity even if you’re managing repayments comfortably.
Tip 3: Refinancing to a Lower Rate Can Improve Serviceability
One of the simplest ways refinancing can help borrowing capacity is by reducing assessed repayments.
If your loan costs less to service on paper, lenders may be willing to lend you more — without increasing real-world financial stress.
Tip 4: Loan Structure Matters More Than Most People Realise
How your loan is structured can influence how lenders assess you.
Refinancing allows you to restructure your loan in a way that better suits modern lending assessments, sometimes unlocking capacity without changing income.
Tip 5: Improved Cash Flow Strengthens Your Position
Refinancing can improve monthly cash flow by lowering repayments or consolidating higher-interest debts.
Better cash flow can improve overall serviceability and make your financial position look stronger to lenders.
Tip 6: Equity Growth Can Open New Borrowing Options
If your property has increased in value, refinancing can unlock that equity.
A stronger loan-to-value ratio may give you access to better rates, more lenders, or additional borrowing options.
When equity is involved, it’s important to align decisions with broader financial goals. Resources from
The Accountants
can help provide useful context.
Tip 7: Reduce Existing Commitments Where Possible
Credit cards, buy now pay later facilities, and personal loans all reduce borrowing capacity.
Refinancing can be an opportunity to simplify or restructure these commitments, presenting a cleaner financial picture to lenders.
Tip 8: Don’t Let Old Lending Decisions Limit You
Many people assume their borrowing capacity is capped because of what they were told years ago.
But lending policies change, interest rates move, and personal circumstances evolve. Refinancing allows your position to be reassessed under current conditions.
Tip 9: Borrowing More Isn’t the Goal — Flexibility Is
Improving borrowing capacity isn’t about stretching yourself unnecessarily.
It’s about understanding what’s possible and structuring borrowing in a way that’s sustainable and aligned with your future plans.
Tip 10: Get Expert Guidance Before Making Assumptions
Borrowing capacity is one of the most misunderstood parts of lending.
Chase Douglas has extensive experience in mortgage lending and helps homeowners understand how refinancing could improve their borrowing position — and whether it makes sense for their situation.
Chase looks at your loan, income, expenses, and equity, then helps you understand what’s realistically achievable before you take your next step.
Want to Know What Your Borrowing Capacity Really Is?
If your circumstances have improved since you first took out your mortgage, there’s a strong chance your borrowing capacity has too — even if no one has told you.
Refinancing could be the key to unlocking options you didn’t realise were available.
👉 Book a borrowing capacity review with Chase Douglas and find out whether your current loan is helping you move forward — or holding you back.
One conversation could change what’s possible next.
