How to find your ‘safe borrowing ceiling’

If rates go up, you need to be able to ensure that can still repay your loan. Find your safe borrowing ceiling with these two steps:

1. Multiply your deposit by five: An 80 per cent loan cap means you avoid lenders' mortgage insurance and have an equity buffer if prices fall.

2. Divide your before-tax salary by 3 to show the repayment you should be able to afford.

Source: The Age

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