Why you still might not be able to borrow - even if you have a lot of equity.

It can happen that you can have a property with a lot of equity, or you have a very large deposit, but we tell you that your income isn’t sufficient to borrow the money you’d like. I get that this is frustrating but we need to separate the two factors.

There are three key characteristics of borrowing that the banks investigate:

  • Character (who are you, do you have good repayment history, do you have stable work etc, and we will disregard this factor for now),

  • Collateral (equity or deposit that you have)

  • and the third is Capacity.

Two Red Shoes

Capacity is the test of your ability to afford the ongoing repayments o