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Why can't I buy a more expensive property if I have a large deposit?

It’s very common for a client to come to us and talk about their deposit. In the past banks were more lenient and may have lent money solely based on the size of the deposit. These days, banks are looking at more of a combination of deposit and serviceability. So what exactly does this mean? 

When borrowing money the bank will look at what size deposit you have as well as the makeup of your household income and expenses. Basically, how much money do you have available once you have covered your expenses to service a loan?

As an example you may have a 250k deposit and want to purchase a 750k property therefore needing a 500k loan. You will have more than a 20% deposit to purchase this property but your income may be too low to service the 500k loan. You may be in a situation where you only have one household income, or have a temporary reduction income which is where My Mortgage can help out. 

All banks test your serviceability slightly differently and in some circumstances we have seen some banks approve lending of up to 150k more than another. The good news is we work with a range of banks so we can look at your individual situation and make the best recommendation to get you into the property you want. 

If your bank has pushed back on your serviceability, contact the team at My Mortgage now to see what we can do for you.