How do banks calculate bond affordability?

Note: You can use our Bond Calculator to determine what you’ll pay on your home loan.

The bank calculates your bond affordability by assessing your credit record.

Your credit record is a three-digit number that summarises your financial situation. The better you’ve been at making payments on time, keeping your income higher than expenditure etc, the higher your credit record.

Your credit record tells the bank how much of a risk you’ll be, and how likely you are to repay the bond. They will determine the bond you qualify for accordingly.

You need a credit score of at least 610 for the bank to consider your home loan application, while anything above 661 is considered a decent credit score.

Here’s a more detailed breakdown:

• 781 to 850. Excellent.
• 661 to 780. Good.
• 610 to 660. Fair.
• 500 to 610. Poor.
• 300 to 499. Very poor.

If you get prequalified with ooba Home Loans, we will assess your credit score and provide an estimate of what you can afford.

You can get prequalified by contacting an expert at ooba Home Loans or by using our free, online prequalification tool, the Bond Indicator.