With the cash rate at 4.35% after three hikes this year and lenders assessing you around 9%, borrowing capacity is tighter than it has been in a while. That does not mean stop buying. It means structure the purchase so the loan is built for the rate environment you are actually in, not the one that ended last year.
Start with a current pre-approval, not an old one
A pre-approval from the bottom of the rate cycle is now fiction. Lenders have reassessed serviceability upward with every hike, so the number you were quoted last year overstates what you can borrow today. Get a fresh assessment at current rates before you inspect a single property.
Reduce your assessable commitments before you apply
Borrowing capacity is calculated after your existing financial commitments, and lenders treat credit card limits, not balances, as a liability. A $20,000 card limit you never use still cuts your capacity. Before applying, close or reduce cards you do not need, clear small personal and car loans where you can, and cancel buy-now-pay-later facilities.
Use a split loan to hedge an uncertain rate path
A split loan, part fixed and part variable, gives you repayment certainty on the fixed portion if rates climb again, while keeping the flexibility of an offset and extra repayments on the variable side. In a market where even the economists are divided, splitting the difference is a defensible structure.
Lender choice changes the number
Serviceability calculations are not uniform. Lenders apply different assessment rate floors, treat existing debts and rental income differently, and weigh living expenses in their own ways. The same applicant can qualify for materially different loan amounts at different banks.
ADF buyers have structural advantages to factor in
Defence members have entitlements that change the serviceability maths directly. The Defence Home Ownership Assistance Scheme provides a monthly subsidy toward home loan interest, which improves your effective cash flow. For an ADF buyer in a rising-rate market, these are worth designing into the structure from the start.
JSC Property Investments helps you structure a purchase that holds up as rates move. Book a Kickoff Call with our team and let's plan your next buy properly.