Dollars & Distractions – Episode 3: The Truth About Borrowing Capacity: What Online Calculators Don’t Tell You

Dollars and Distractions Podcast | Featuring Maryanne Elliott and Bec WatsonUnderstanding how much you can borrow for a home loan is one of the biggest questions for first home buyers.Many people turn to online borrowing calculators, but these tools often miss key factors lenders use when assessing a mortgage application.In this episode of Dollars and Distractions, mortgage broker Maryanne Elliott and Bec Watson from 360 Mortgage Solutions breaks down the truth about borrowing capacity and explains why personalised advice can make a huge difference when planning to buy property.You’ll learn how interest rates, bank buffers, living expenses, debts, and lifestyle choices can significantly impact your borrowing power — and why what a calculator says you can borrow might not reflect reality. If you’re planning to buy your first home or simply want to understand how banks assess mortgage applications, this episode will help you make smarter financial decisions. WhatYou’ll Learn in This EpisodeWhat borrowing capacity actually means when applying for a mortgageWhy online borrowing calculators can be misleadingHow lenders assess your loan using higher “buffer” interest ratesThe role of living expenses and lifestyle spending in loan approvalsHow debts like credit cards and Buy Now Pay Later services affect borrowing powerWhy speaking with a mortgage broker can provide a more accurate picture of your borrowing potentialMany borrowers are surprised to learn that lenders don’t assess home loans using the advertised interest rate. Instead, banks apply a buffer rate, meaning your borrowing capacity is tested at a significantly higher interest rate to ensure you could still afford repayments if rates increase. Maryanne also explains that lenders carefully review living expenses and discretionary spending, which means everyday financial habits can directly influence how much you’re able to borrow. Another common oversight is Buy Now Pay Later services, which many borrowers assume don’t affect their application — but lenders often treat them the same as other debts. Sound Bites“That’s not the rate they assess you at.”“Buy now pay later is counted as a debt.”“Mandatory expenses include car insurance and rego.”Episode Chapters00:00 – Introduction to Borrowing Power01:24 – Understanding Borrowing Capacity05:17 – The Role of Online Calculators09:08 – Living Expenses and Their Impact13:00 – Managing Debt and Credit Cards16:56 – The Importance of Financial ClarityAbout 360 Mortgage Solutions, helping Australians navigate the home loan process with confidence. With over a decade of experience in banking and finance, Maryanne specialises in helping first home buyers understand their borrowing power and enter the property market with clarity and confidence. Keywords borrowing capacity, mortgage borrowing power, home loan borrowing calculator, mortgage broker advice, interest rates and borrowing capacity, bank buffer rates, living expenses mortgage assessment, first home buyer mortgage tips, buying a home Australia