For Australians chasing the keys to their next home, every dollar counts – and right now the price at the bowser is the quiet force reshaping how much you can borrow.
As petrol surges on global turbulence, banks are counting those extra kilometres in their calculators, meaning the road to your dream address could start with a smarter commute.
The upside? A few small changes to how you travel can keep your property plans in top gear.
Lenders are scrutinising everyday spending more than ever, and fuel is fast moving from a background cost to a frontline factor in borrowing capacity.
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Julian Finch, founder and CEO of Finch Financial, says what looks like a minor weekly top‑up can snowball when a bank runs its numbers.
“Fuel prices might seem like a small weekly expense, but when petrol rises sharply it can significantly affect how banks assess your financial position,” Finch said.
“When lenders calculate borrowing capacity, they look closely at your ongoing living costs. If petrol prices spike and you’re spending more on fuel every week, it reduces the income available to service a home loan.”
Australians hoping to buy a home may see their borrowing power shrink because of rising petrol prices.
The backdrop is working against borrowers.
Geopolitical shocks and volatility in energy markets are pushing oil higher, and those spikes are flowing straight through to pump prices.
Finch says it’s already showing up in household budgets and, crucially, on bank statements.
“For households that rely heavily on driving for work, school or daily life, those higher costs can add hundreds of dollars a month to their expenses,” he said.
“Tradies driving around in big utes that cost a lot to fill are going to be hardest hit.”
Inside the credit model, that translates into tighter serviceability.
Banks benchmark living costs against the Household Expenditure Measure and overlay your actual, observed spending over recent months.
The recent surge in global tensions and conflict is pushing fuel prices higher and lenders are factoring those increased costs into household living expenses when assessing mortgage applications.
If your statements show consistently higher fuel outlays, the model assumes that’s your new normal.
The result is a smaller surplus after expenses, which shrinks how much a bank is comfortable lending – even before you factor in today’s higher rates and the still‑stiff buffers applied to stress test repayments.
The pain is sharpest for Australians who can’t easily leave the car at home.
Think tradies running big utes that are costly to fill, families juggling multiple vehicles, and buyers in outer suburbs or regional towns where the nearest job, school or supermarket means a long drive.
Finch Financial chief executive and mortgage expert Julian Finch.
For heavy commuters, a jump at the bowser can add hundreds a month to transport costs. Multiply that across a quarter’s worth of statements and it can lop serious dollars off loan approvals.
The good news is you’re not powerless.
Because lenders test what they can see, borrowers have a chance to shape the picture in the months before applying.
Finch suggests trimming recorded fuel spend where possible: consolidate errands, car‑pool, swap the second car for public transport a few days a week, or put the most efficient car on the longest commute.
“Every dollar of recurring expense counts when a bank is assessing your ability to repay a loan,” he said.
“Right now, petrol is one cost that could be rising faster than people expect.”
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