Upgrading to your next home isn’t just about getting more space, it’s about managing bigger numbers.
The latest data from the Australian Bureau of Statistics (ABS), as of March 2025 puts the average new home loan size for owner-occupier dwellings in Australia at $659,922.
With household costs climbing and borrowing conditions shifting, there’s never been a better time to get your finances in shape before you buy.
Whether you’re upsizing for a growing family or chasing lifestyle perks, being finance-ready gives you options. Getting pre-approved and improving your borrowing power can not only increase what you can afford, it can also put you ahead of other buyers when the right home comes up.
In this guide, we’ll walk through the key steps to boost your borrowing capacity, prepare for home loan pre-approval, and buy your next property with clear eyes and a full plan.
Why pre-approval matters for upgraders
Think of pre-approval as your financial green light. It tells you, and the sellers, exactly how far you can go, giving you clarity, confidence, and stronger negotiating power.
Securing pre-approval not only clarifies your budget but also signals to sellers that you're a serious buyer, potentially giving you an advantage in competitive markets.
Pre-approval isn’t a full loan offer yet, but it’s a conditional sign-off from a lender based on your current financial situation.
It tells you:
What you can afford based on your income, debts, and living costs
How your existing home loan factors into your new borrowing power
How ready you are to make a formal offer once you’ve found the right place
For upgraders, it’s especially valuable. You might still be paying off your first mortgage. You may have equity to leverage, or rental income to consider. Pre-approval helps you map out your full financial picture, so there are no surprises later on.
Tip: Sellers and real estate agents are more likely to take you seriously when you’ve got pre-approval in hand. It can give you an edge in a competitive market.
Calculate your borrowing power
Before you fall in love with your next dream home, it’s important to know what you can realistically afford. Lenders look at a few key factors when working out your borrowing power:
Factor | What it includes |
|---|---|
Income | Your salary, bonuses, rental income or business income |
Current debts | Existing mortgage, car loans, credit cards (even if you don’t owe much) |
Living expenses | Based on your household size, lifestyle, number of dependants |
Credit history | Your credit score and repayment history across any loans or bills |
Deposit or equity | Savings or existing home equity you’ll use toward the next property purchase |
Loan term & interest rate | Shorter loan terms or higher rates will reduce what you can borrow |
Want a quick estimate of your borrowing limit?
Use our Borrowing Power Calculator to get a personalised figure based on your income, expenses, and goals.
You might also be interested in: Buying bigger and smarter: How a buyer’s agent changed the game
Tips to increase your borrowing capacity
Boosting your borrowing power isn’t just about earning more, it’s about making smarter financial moves that reduce your risk in the eyes of a lender. Here are some ways to do that:
1. Pay down existing debts
Got a personal loan, credit card, or buy-now-pay-later account? Even small balances can eat into your borrowing power. Clearing or reducing these can make a big difference.
2. Cancel unused credit cards
Even if you have a $0 balance, lenders still factor in your full credit limit. If you have cards you don’t use, consider closing them altogether.
3. Consolidate multiple debts
If you’ve got multiple loans or liabilities, consolidating them into one with a lower interest rate and single repayment can improve your serviceability.
You might also be interested in: Benefits of consolidating debt
4. Tweak your monthly expenses
Cutting back on discretionary spending: subscriptions, takeaways, extra memberships, can help lower your declared living costs, boosting how much you may be able to borrow.
Download a simple budget planner to see where you can trim the fat.
If you’re an existing Aussie customer, your Aussie App may already have insights into your loan health and repayment behaviour, another way to show lenders you’re a low-risk borrower.
5. Leverage dual incomes
If you’re buying with a partner, combining your income and shared expenses can significantly increase your total borrowing power.
Getting your documents and deposit ready
Lenders want a clear picture of your financial situation before they grant pre-approval. Getting organised upfront can fast-track your application and help avoid delays.
What you’ll need:
Proof of income (payslips, bank statements, BAS if self-employed)
Details of current home loan (statements, loan balance, repayments)
A list of ongoing debts (credit cards, personal or car loans)
Living expenses (household bills, food, transport, childcare, insurance)
Proof of savings or available equity
ID documents (driver licence, Medicare card or passport)
If you're planning to use the equity in your current home as your deposit, an Aussie Broker can help you work out how much you may be able to release without overleveraging.
Don’t forget to factor in upfront costs like:
Loan application or settlement fees
An Aussie Broker can help you budget for these, so you’re not caught off guard.
You might also be interested in: What every buyer must check before signing
The pre-approval process (and how Aussie helps)
Pre-approval is relatively straightforward, but doing it with a broker by your side can make a big difference. Here’s how the process works, step by step:
Step 1: Assess your situation
Your Aussie Broker will look at your income, current mortgage, financial goals and credit history to assess your upgrade strategy.
Step 2: Submit documents
You’ll need to supply the documents listed above. Don’t worry, we’ll guide you through exactly what’s needed.
Step 3: Compare your options
We have access to over 25 leading lenders* and thousands of home loan options. Your broker will help match you with one that suits your goals, equity position, and borrowing power.
Step 4: Apply for pre-approval
We’ll handle the paperwork and deal directly with the lender. Most pre-approvals are valid for up to 90 days, giving you time to house-hunt confidently.
Step 5: Act fast when you find the right property
Once you’ve got pre-approval, you can move quickly when the right opportunity comes up. No scrambling for last-minute finance.
You might also be interested in: Everything you need to know about mortgage pre-approvals
What if your financial situation is complex?
If you’re self-employed, have irregular income, rental properties, trusts, or multiple debts, don’t stress. We’ve helped thousands of Aussies in complex situations secure finance with the right structure.
Your Aussie Broker will tailor the advice to your situation and present your case clearly to lenders, so you’re not left trying to explain it all on your own.
Tools to help you get finance-ready
Borrowing Power Calculator
Quickly estimate how much you could borrow for your upgrade.
Budget Planner
Track your monthly expenses and find areas to improve your serviceability. Ask your broker for a copy.
Aussie App
See your property’s value, equity position, and track market changes in real time.
Book a free^ appointment
Talk to an Aussie Broker to get your finance plan in place and apply for pre-approval.
The takeaway: Don’t upgrade blind
Your next property move could be your biggest yet, so don’t leave your finance to chance. Getting pre-approved and boosting your borrowing power early puts you in the driver’s seat when it matters most.
Whether you’re looking to tap into your equity, buy with confidence, or line up your next home before you sell your current one, an Aussie Broker is here to help.
Let’s make your next home happen.
Ready to take the next step?
Talk to an Aussie Broker about pre-approval.
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