1. What is Commbank Borrowing Capacity?

Commbank Borrowing Capacity refers to the maximum loan amount that Commonwealth Bank may be willing to lend based on your assessable income and various lending criteria. It helps potential borrowers understand their borrowing limits before applying for a loan.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Assessable\ Income \) — Your total verifiable income ($)
• \( Factor \) — The lending multiplier determined by the bank based on various factors

Explanation: The factor typically ranges from 4 to 7 and is influenced by your credit history, existing debts, living expenses, and the bank's current lending policies.

3. Importance of Borrowing Capacity Calculation

Details: Understanding your borrowing capacity helps you set realistic expectations when house hunting, prevents disappointment during the loan application process, and ensures you don't overextend yourself financially.

4. Using the Calculator

Tips: Enter your total assessable income in dollars and the appropriate factor. For accurate results, consult with a Commbank lending specialist to determine the correct factor for your specific circumstances.

5. Frequently Asked Questions (FAQ)

Q1: What is included in assessable income?
A: Assessable income typically includes salary, wages, rental income, investment returns, and other verifiable sources of regular income.

Q2: How is the factor determined?
A: The factor is influenced by your credit score, existing debts, living expenses, loan term, interest rate, and the bank's current lending policies.

Q3: Is this calculation definitive?
A: No, this is an estimate. The actual borrowing capacity will be determined through a formal loan application and assessment process.

Q4: What other factors affect borrowing capacity?
A: Other factors include your credit history, number of dependents, existing financial commitments, and the type of loan you're applying for.

Q5: Should I borrow to my maximum capacity?
A: It's generally recommended to borrow conservatively to allow for interest rate rises and unexpected expenses.