Specialist lenders and borrowing capacity

Most specialist or 3rd tier lenders will offer a higher borrowing power as they are not regulated by ASIC. Whereas most lenders are required to add a 3% buffer to the interest rate to determine your borrowing power, specialist or 3rd tier lenders have the capacity to reduce the buffer. As such, many of the specialist lenders apply a 1% or 2% buffer which in general (depending on other policies) increases your borrowing power with the specialist lenders (even if their rate is higher than the mainstream lenders).

Yes as they are not bound by APRA regulations they can offer lower buffers on new and ongoing debts.However you need to factor in the increase in Interest rates. It is always best to consult an experienced mortgage broker.

Yes they do, because they have non-traditional funding sources. Their borrowing capacity is usually more favourable.

In general yes, but not always. Some lenders (including mainstream banks) do have more lenient affordability criteria than others.

Specialist lenders, like Pepper Money, often offer higher borrowing capacities than mainstream lenders. This is because they have a different lending criteria, which may be more flexible and may allow you to borrow more money. However, it's important to note that specialist lenders typically charge higher interest rates than mainstream lenders, so you'll need to weigh up the pros and cons before making a decision. If you're considering a specialist lender, it's important to do your research and compare different lenders to find the best deal for you. You should also make sure that you understand the terms and conditions of the loan before you sign up, so that you don't get any nasty surprises later on.