To make sure you can use the Borrowing Capacity Calculator to its full potential, we’ve put together explanations of each field, how it impacts the calculation and any assumptions that calculator makes.
The Borrowing Capacity is calculated using a loan term of 360 Months (30 Years) and P & I. All calculations are an estimate only. Enter all figures as Gross.
Total Security, Loan Amount and LVR fields
There is a relationship between the Total Security, Loan Amount and LVR fields. Adding, deleting and adjusting figures in any of these fields will affect the others.
Households and Dependents
The Mercury Nexus Borrowing Capacity calculator allows you to indicate when you have applicants and their dependents residing in different households.
Borrowers
SE Income Wizard
If you select Self Employed as a borrower’s income type, you will be able to use the Self Employed (SE) Income Wizard. This allows you to accurately determine two financial years of self-employed income, by considering Net Profit Before Tax, non-recurring expenses, company loans, Director Fees and addbacks.
You can also distribute income to applicants and non-applicants.
Income Policy Matrix
Next to each income type is an info icon. When selected, a slider appears on the right-hand side of the screen with the lenders policy for that income type.
Suppressing Expenses
If you need to calculate a clients borrowing capacity based on different income or expense totals you can click on the eye icon next to the income and expense type fields to enable or disable that field. This means you can easily calculate borrowing capacities by either adding or suppressing it from the income total.
Instead of opening two Borrowing Capacity calculator tabs to compare different income or expense variables and their effect on your client’s borrowing capacity, you can perform all your comparison calculations in one tab using this feature.
Assets
Investment Real Estate Asset
When an investment real estate asset has been selected, the following fields will be available:
Investment Cost is not mapped to the living expenses 'investment property cost' but is calculated as a living expense.
Frequency = frequency of investment costs .
Negative gearing on assets listed as investment property (both proposed and existing investments) uses the ownership percentage of the asset to apportion the tax deduction.
Use as Security and Clearing from this loan
Use as Security should be selected when the existing property is being included as security with the new application.
The Use as Security option will increase the Borrowing Capacity results based on the lender calculation.
When Use as Security is checked, Clearing will be automatically checked and hidden as it assumes a different lender and clearing.
