In this episode of You Have My Interest, we’re taking a closer look at the difference between borrowing capacity and purchase capacity - two terms that are often used interchangeably but can lead to very different outcomes when planning to buy a property.This topic was prompted by a recent client scenario, where a buyer was exploring the option of using a lenders mortgage insurance (LMI) waiver due to having a smaller deposit. After reviewing their situation and running the numbers, we actually recommended that they proceed with paying LMI instead. Why? Because it gave them access to a higher loan-to-value ratio and increased their overall purchase capacity.
