Borrowing Power Calculator
See a rough estimate of how much a lender might approve you for, based on the real methodology banks use: your income minus expenses and debts, assessed at a buffered interest rate.
Your details
Estimated maximum borrowing power
$406,609
Assessment rate used
9.00%
Repayment at your actual rate
$2,438/mo
Loan-to-income multiple
4.1x
Lenders assess your new loan's repayment at your actual rate plus a mandatory 3 percentage point buffer (APRA's minimum requirement), not the rate you'd actually pay, which is why the assessment rate above is higher than what you entered. Credit cards are assessed at roughly 3.5% of their limit per month regardless of balance or whether you pay them off in full. HEM living expense benchmarks are broker-reported approximations, not the real bank tables, and every lender's policy differs. This tool provides a rough estimate only, is not financial advice, and doesn't replace a real assessment from a lender or broker.
How to use this calculator
- 1. Your gross annual income, whether you're applying alone or with a partner, and any dependents.
- 2. Your monthly living costs (we'll suggest a typical benchmark), any other loan repayments, and your total credit card limits.
- 3. The calculator assesses a new loan at your rate plus the mandatory serviceability buffer, the same way lenders do.
FAQ
Why is the assessment rate higher than the rate I entered?
APRA requires every lender to test whether you could still afford a loan if rates rose, by assessing serviceability at your actual rate plus a minimum 3 percentage point buffer. You'd only pay your real rate day to day, but your borrowing power is capped by what you could service at the buffered rate.
Why do unused credit card limits reduce my borrowing power?
Lenders assume you could max out any credit card at any time, so they count a monthly repayment obligation against the full limit, not your current balance, even if you pay it off in full every month. Cancelling cards you don't need can meaningfully increase what you can borrow.
What's the HEM benchmark?
The Household Expenditure Measure is a standard minimum living-expense benchmark lenders compare your declared expenses against. If your declared expenses are lower than the HEM figure for your household, lenders use the higher HEM number instead. The exact bank tables aren't public, so the figure used here is an approximation.
Does this guarantee I'd be approved for this amount?
No. Every lender has its own policies, risk appetite and exact HEM tables, and this doesn't account for your credit history, employment type, or the specific property. Treat this as a ballpark to help you plan, then get a real assessment from a lender or mortgage broker.
Related reading
First Home Super Saver Scheme: The Full Guide
How the First Home Super Saver Scheme actually works, a real worked tax example, the deemed-earnings quirk most guides skip, and what the scheme can't fix.
Rentvesting: How It Works (and Whether It's Worth It)
How rentvesting actually works, real Australian uptake statistics, the tax side, the related six-year CGT rule, and the genuine risks worth weighing up.
Bridging Loans Explained
How bridging loans actually work, peak debt vs end debt with a worked example, how capitalised interest works, and the real risks if a sale is slow.
Money tips, straight to your inbox
Free calculators, guides and the occasional useful thing. No spam, unsubscribe anytime.
Disclaimer
This calculator estimates borrowing power using the standard bank serviceability approach: net income minus living expenses (whichever is greater of what you enter or a HEM benchmark) minus existing debts, with the new loan assessed at your entered rate plus APRA's mandatory 3 percentage point buffer. HEM benchmark figures are broker-reported approximations, not official published data, and every lender's exact policy differs. It doesn't account for income shading on bonuses or overtime, your credit history, employment type, or lender-specific risk settings. This tool provides estimates only, is not financial advice, and doesn't replace a real assessment from a lender or mortgage broker.