Will a personal loan reduce my home-loan borrowing capacity?
Yes. A personal-loan repayment is an existing commitment and can reduce mortgage serviceability. The size of the effect depends on the repayment, remaining term and the home lender’s assessment model.
What changes the answer
If a property purchase is near, model the home loan before taking the personal loan.
A smaller personal-loan balance or shorter remaining term may change the result, but there is no universal dollar-for-dollar rule.
What to check before acting
Paying cash instead preserves serviceability but reduces the deposit or emergency buffer, so compare both constraints.
- Use your actual balance, price, term and fees.
- Keep the comparison on the same time horizon.
- Check any tax-sensitive or contract-specific point against the current source document.
Use the enquiry form for an initial broker review. No lender application is made just by enquiring.
Compare my finance optionsSources and verification
General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.