How to Improve Your Borrowing Power Before Your Next Loan Application

Whether you're buying your first home or looking to upgrade, borrowing power plays a major role in how much a lender will allow you to borrow—and the kind of property you can afford.  

If you're a first home buyer or homeowner in Bathurst or Lithgow, understanding how to improve your borrowing power could be the key to unlocking your ideal home loan. 

So, what is borrowing power and how can you boost it before your next application? 

What Is Borrowing Power? 

Borrowing power is the amount of money a lender is willing to offer based on your financial situation. It’s determined by factors such as: 

• Your income 

• Existing debts 

• Credit score 

• Living expenses 

• Number of dependants 

• Current interest rates 

  
  

If you’ve ever been surprised by a smaller loan offer than expected—your borrowing power is likely the reason. 

1. Reduce Your Debts to Improve Your Borrowing Power 

Lenders closely assess your debt-to-income ratio, which compares your current repayments to your income. The more debt you carry (such as credit cards, car loans or personal loans), the lower your borrowing capacity. 

Tips for Bathurst & Lithgow locals: 

• Pay off or reduce credit card balances—even unused limits count 

• Consider consolidating multiple small debts 

• Avoid taking on new liabilities before applying for your loan 

  
  

2. Review Your Living Expenses 

Lenders now scrutinise your living expenses more than ever. If your spending is high relative to your income, your borrowing power takes a hit. 

How to prepare: 

• Analyse the last 3 months of your bank statements 

• Cut down on non-essential spending (e.g. subscriptions, dining out, online shopping) 

• Track your spending with budgeting tools or apps 

• A few smart lifestyle changes can improve your borrowing power more than you might expect. 

  
  

3. Increase Your Income (Even Slightly) 

Even a modest income boost can improve your borrowing capacity. 

This might include: 

• Overtime or bonus income 

• A second job or freelance work 

• Rental or investment income 

• Including a partner’s income if applying jointly 

  
  

Speak to a trusted mortgage broker Bathurst & Lithgow to see what forms of income can strengthen your application. 

4. Improve Your Credit Score 

A healthy credit score gives lenders more confidence and can help you secure a better interest rate. 

To lift your credit score: 

• Always pay bills and debts on time 

• Limit the number of credit enquiries on your file 

• Check your credit report for mistakes 

• Lower credit card limits if you’re not using them 

A stronger credit file = higher borrowing potential. 

5. Work with a Mortgage Broker Bathurst & Lithgow 

Before applying for a loan, consult a local expert. At Sparks Finance, we’ll help you: 

• Assess your current borrowing power 

• Identify ways to improve it 

• Compare 30+ lenders to find the right solution 

• Apply with confidence and support 

With expert advice, you’ll avoid common mistakes—and possibly save thousands over the life of your loan. 

Planning Ahead Pays Off 

Improving your borrowing power takes time, but even a few weeks of preparation can lead to better loan options and lower interest rates. 

Whether you’re entering the market, refinancing, or upsizing in Bathurst or Lithgow, the right strategy today can set you up for long-term financial success.