Borrowing Power Calculator
Estimate how much you could borrow for a home loan.
Your Income & Loan Details
Estimate how much you could borrow, assessed with the 3% lender buffer.
Car, personal and other loan repayments go in “existing repayments” (not HECS-HELP). Enter card limits, not balances — lenders assess the full limit.
You could borrow approx.
$553,883
Repayments about $3,321/month at 6% over 30 years (assessed at 9%).
Where your net income goes each month
- Living expenses$2,000
- Available for loan$4,457
Buying at the maximum price gives a loan-to-value ratio (LVR) of 84.7%. Above 80% LVR, lenders mortgage insurance (LMI) is usually charged unless you qualify for a waiver or government scheme.
| Rate | Assessed at | Borrowing power | Repayment/mo |
|---|---|---|---|
| 5% | 8% | $607,370 | $3,260 |
| 6%(yours) | 9% | $553,883 | $3,321 |
| 7% | 10% | $507,841 | $3,379 |
| 8% | 11% | $467,978 | $3,434 |
How Much Can I Borrow? Using the Borrowing Power Calculator
This borrowing power calculator estimates how much you could borrow for a home loan using the same basic serviceability test Australian lenders apply. Enter your income (or both incomes for a joint application), dependants, living expenses, debts and credit card limits, and it shows your estimated home loan borrowing power, the repayments on that loan, and the maximum purchase price once your deposit is added.
How Borrowing Power Is Calculated
Monthly surplus = net income − living expenses − existing loan repayments − 3.8% of credit card limits
Borrowing power = the loan that surplus would repay (principal & interest) at your interest rate + 3% over the loan term
- Net income: each applicant’s take-home pay after 2026-27 income tax, the Medicare levy and the low income tax offset. Other taxable income such as rent is counted at 80%.
- Living expenses: the higher of what you declare and a simplified benchmark — $2,000 a month for a single, $3,000 for a couple, plus $700 per dependant.
- Credit cards: assessed at 3.8% of the total limit each month, even if you pay the balance in full.
- 3% buffer: APRA expects lenders to assess new loans at least 3 percentage points above the actual rate, so you can still afford repayments if rates rise.
Worked Example
A couple applying jointly earn $90,000 and $70,000 a year, have one dependant, no other loans and $10,000 in total credit card limits. They’re looking at a rate of 6% p.a. over 30 years and have a $100,000 deposit.
- Combined net income: $5,890 + $4,757 = $10,647 a month
- Living expenses: no figure declared, so the couple + one dependant benchmark of $3,700 applies
- Credit card commitment: 3.8% × $10,000 = $380 a month
- Monthly surplus: $10,647 − $3,700 − $380 = $6,567
- Assessed at 6% + 3% = 9%, that surplus supports a loan of about $816,118
At the actual 6% rate, repayments on $816,118 would be about $4,893 a month. Adding the deposit gives a maximum purchase price of about $916,118, an LVR of 89.1% — so LMI would likely apply — and a debt-to-income ratio of 5.1. If rates were 1% higher, their borrowing power would fall to about $748,277; at 1% lower it would rise to about $894,928.
Borrowing Power vs. What You Can Comfortably Afford
The maximum a lender will approve isn’t a target. The serviceability test assumes your spending stays at the benchmark level for the life of the loan, so borrowing the full amount can leave very little room for savings, a growing family, or a period on one income. A good check is to compare the repayment shown above with what you currently save or pay in rent each month — if it’s a stretch now, it will be harder if rates rise.
Ways to Increase Your Borrowing Power
- Cut credit card limits: every $10,000 of limit reduces your assessed surplus by about $380 a month, even with a zero balance.
- Close or pay down other debts: car loans, personal loans and buy now, pay later accounts all reduce what’s left for a mortgage.
- Apply jointly: a second income usually adds more to net income than it adds to the living-expense benchmark.
- Save a larger deposit: it doesn’t change how much you can borrow, but it lifts the price you can pay and keeps your LVR lower — ideally at or below 80% to avoid LMI.
Frequently Asked Questions
- How much can I borrow for a home loan in Australia?
- It depends mainly on your after-tax income, your living expenses, any existing debts and credit card limits, and the interest rate the lender assesses you at. Australian lenders must check you could still afford repayments if rates rose by at least 3 percentage points, so the amount you can borrow is usually much lower than what today's repayments alone would suggest. Enter your details above for an estimate based on that same method.
- How do you calculate borrowing power for a home loan?
- Lenders start with your net (after-tax) monthly income, subtract the higher of your declared living expenses or a benchmark, then subtract existing loan repayments and an allowance for credit card limits. What's left is the monthly surplus available for a new loan, and your borrowing power is the loan amount that surplus could repay at the actual rate plus a 3% buffer over the loan term.
- How much can I afford to borrow, compared with how much the bank will lend?
- They're not the same thing. Your maximum borrowing power is the most a lender's serviceability test allows, which assumes you'll keep spending only the benchmark amount and leaves little room for savings, holidays or a change in income. Many people choose to borrow less than their maximum so repayments stay comfortable if rates rise or a household income drops.
- Is this a home loan eligibility calculator?
- It estimates the size of loan you could be eligible for based on income and commitments, but it can't confirm eligibility. Lenders also look at your credit history, employment type and length, deposit source, the property itself and their own policy limits, which this calculator doesn't assess.
- Why do different lenders give me different borrowing power?
- Each lender uses its own living-expense tables, its own floor or buffer rate, different shading for bonus, overtime, rental or self-employed income, and different assumptions for credit cards and HECS-HELP debt. That's why two lenders can quote borrowing amounts tens of thousands of dollars apart for the same household.
- How can I increase my borrowing power?
- Reduce or cancel credit card limits you don't use (lenders count roughly 3.8% of the limit per month even with a zero balance), pay off or close car and personal loans, and keep everyday spending in check before you apply. Applying jointly with a second income or saving a larger deposit can also lift how much you can borrow or how much you can spend on a property.
- What happens if I borrow more than 80% of the property value?
- When your loan-to-value ratio (LVR) is above 80%, most lenders charge lenders mortgage insurance (LMI), a one-off premium that protects the lender, not you. It can often be added to the loan, and some first home buyer schemes or professional waivers let eligible buyers avoid it.
- Will a bank or mortgage broker's borrowing power calculator match this one?
- Not exactly. Every bank, lender and mortgage broker runs its own serviceability calculator with its own policy settings, so their figures won't exactly match this one. This is an independent estimate from easycalculator.com.au and isn't affiliated with any lender or broker — use it to get a ballpark figure, then confirm your actual borrowing power with your chosen lender or broker.