What is the formula banks used in the borrowing power calculation?

Banks use a variety of factors to calculate the borrowing power of a potential borrower. The main factors used to determine borrowing power are income, expenses, assets, liabilities, and credit history. Income: Banks will look at your gross income (before taxes) and your net income (after taxes). They will also take into account any other income sources, such as rental income, investments, and other sources of income. Expenses: Banks will evaluate your current monthly expenses, such as rent or mortgage payments, car payments, credit card payments, and other expenses. They will also take into account any future expenses you may have, such as a wedding or a new car. Assets: Banks will look at the value of any assets you have, such as a house, car, investments, or other assets. They will also take into account any equity you have in a property. Liabilities: Banks will look at any liabilities you have, such as student loans, credit card debt, car loans, or other debts. Credit History: Banks will look at your credit history to determine your creditworthiness. They will look at your credit score and any past credit issues you may have had. These are the main factors banks use to determine your borrowing power. Other factors, such as your job stability and the type of loan you are applying for, may also be taken into consideration. If you are looking for the current interest rate offers, you can check out Goodrate on https://goodrate.com.au/home-loan.