Your other debts can majorly affect your chances! This is because the bank takes into consideration the repayments, not how long you have left to repay it with, not the balance of the loan. Even if you only have a $10,000 personal loan over 2 years (Let’s assume the repayment are approx. $500pm), that’s money that you wouldn’t be able to pay off a home loan.
If you’re looking at $2,000pm repayments for a home loan, small personal loans (due to their interest rates and loan terms) can take up a big chunk of that. This is because the bank takes into consideration the repayments, not how long you have left to repay it.
The other biggest offenders are credit cards. Banks’s take 3.8% (as of January 2019) of the LIMIT of your credit card, not the balance, into account when looking at your monthly living expenses. So, if you have a $5000 c/card limit, even if you owe nothing on it, the bank will assume you need a minimum of $190 pm to put towards it.
You should DEFINITELY consider your other debts when thinking about buying a home! Reducing other debts as much as you possibly can is a great step when preparing to take out a home loan.
Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.