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Borrowing power calculator
An indicative maximum loan estimate based on your income, expenses and existing debts. Uses the APRA 3% serviceability buffer and HEM expense floor every Australian lender applies.
Pre-tax salary, including superannuation? Use base salary excluding super for accuracy.
Set to 0 if you're applying solo.
Children or financially dependent adults.
Rent (if applicable), groceries, utilities, transport, insurance, subscriptions.
Car loan, personal loan, HECS-HELP minimums.
Lenders count 3.8%/month of your card limits as servicing, cancel unused cards before applying.
Today's lowest variable: 5.89%.
Use 30 years for max servicing capacity.
Indicative max loan: $539,000
Indicative maximum loan
$539,000
Conservative ballpark, every lender's policy differs
Monthly repayment at displayed rate
$3,196
At 5.89% over 30 years
Monthly repayment at assessment rate
$4,297
At 8.89% (APRA 3% buffer)
Net monthly income
$7,001
After tax + Medicare levy
Monthly affordability
$4,297
Net income minus all expenses + debts + card servicing
How this is calculated
We compute your net monthly income (after PAYG tax + Medicare levy) and subtract: HEM expense floor (or your declared expenses, whichever is higher), your existing monthly debt repayments, and 3.8% of your total credit card limits per month (the rate APRA requires lenders to use). The remainder is your "monthly affordability", that's what we solve back into a maximum loan, using a stress-test rate of your displayed rate + 3% (the APRA serviceability buffer).
Why your real number may be higher: some lenders allow shading down on HEM in higher income bands, treat negatively-geared investment expenses differently, and have different rules for partner income, bonuses, commission, and self-employed applicants. A broker can run your scenario across 85+ lenders to find the highest-servicing policy.
Want a real number, not a ballpark?
These figures are estimates. A 30-min broker consult will run your specific scenario against the actual lender policies, no fees, no obligation.
Important: This calculator provides an estimate only and does not constitute credit advice. Actual rates, repayments, fees and approval are subject to lender policy and your individual circumstances. Comparison rates are based on a $150,000 loan over 25 years on a secured basis, see footer for the full disclaimer.
How much can I borrow for a home loan?
As a rule of thumb, Australian lenders lend roughly 5 to 6 times gross household income, so a household earning $120,000 might borrow in the region of $600,000 to $720,000. The real figure comes from a serviceability test, and every new loan is assessed at your rate plus a 3% buffer, so today's lowest variable rate of 5.89% p.a. is assessed near 8.89% p.a.
How do banks calculate borrowing power?
The method is broadly the same at every lender, even though the numbers differ. A lender adds up your assessable income (often shading rent, bonus and overtime to 70 to 80%), subtracts the greater of your declared expenses or the HEM floor, subtracts the assessed repayments on your other debts and credit-card limits, and applies the 3% APRA buffer to the new loan. Whatever loan size still leaves your assessed surplus at or above zero is your borrowing power at that lender. Because each lender shades income and floors expenses differently, the same applicant can see a spread of $100,000 or more across the panel.
What reduces how much I can borrow?
- Credit card limits. Lenders count the limit, not the balance, at roughly 3.8% a month, so a $10,000 limit can cut borrowing power by tens of thousands even if you clear it monthly.
- Other debts. Car loans, personal loans, HECS/HELP and buy-now-pay-later all reduce assessed surplus.
- Dependants. Each child lifts the HEM expense floor.
- The rate buffer. A higher interest rate means a higher assessed repayment, so a sharper rate genuinely lifts capacity.
- Income type. Casual, self-employed or commission income is often shaded more heavily than PAYE salary.
How can I borrow more?
The fastest levers are reducing or closing credit cards and personal loans, bringing declared expenses to a realistic (not inflated) level, adding a co-borrower's income, and choosing a lender whose serviceability rules suit your income type. A lower rate helps too: because the assessed repayment shrinks, the cheapest live rates can lift your capacity without changing anything about your income. As of 29 July 2026, the lowest variable owner-occupier rate Ratesniffers tracks is 5.89% p.a.
Borrowing power questions, answered
How much can I borrow for a home loan?
As a rough guide, Australian lenders lend around 5 to 6 times gross household income, so a household on $120,000 might borrow roughly $600,000 to $720,000. But that is only a starting point: the real figure comes from a serviceability test that subtracts your living expenses, existing debts and a 3% rate buffer from your income. Use the calculator above for an indicative number, then a lender or broker confirms the exact amount.
What income do I need to borrow $500,000?
Very broadly, borrowing $500,000 needs a gross household income in the region of $90,000 to $110,000, assuming modest living expenses, no other debts and a clean credit history. More debt, dependants or a higher assessment rate push the required income up. The Income Required calculator works this backwards from a target loan.
What is APRA's 3% serviceability buffer?
Australian lenders must assess your loan at your actual interest rate plus a 3% buffer (raised from 2.5% in October 2021). It is a stress test: if you can afford the repayment at the higher rate, you are considered able to absorb future rate rises. On a 6% loan you are assessed at 9%, which materially lowers the maximum you can borrow.
What is HEM and why does it matter?
The Household Expenditure Measure is a benchmark of typical living costs by household size, location and income band, published by the Melbourne Institute. Lenders use the higher of HEM or your declared expenses, so understating your spending will not lift your borrowing power beyond the HEM floor.
Why does my borrowing power vary by lender?
Each lender has its own income shading rules (rent, bonus, overtime, dividend treatment), expense floors, debt-to-income caps and credit-card limit assumptions. The same applicant can see borrowing capacity vary by $100,000 or more across the panel, which is why comparing lenders matters as much for capacity as for rate.
How can I increase how much I can borrow?
The fastest levers are reducing or closing credit cards and personal loans (lenders count the limit, not the balance), lowering declared expenses to a realistic level, adding a co-borrower's income, and choosing a lender whose serviceability rules suit your income type. A lower interest rate also lifts capacity because the assessed repayment is smaller.
Is this calculator the figure a bank will lend me?
No. It is a directional estimate using APRA's framework. The actual approved amount depends on the specific lender's serviceability calculator, your credit profile, deposit, employment status and the property itself. Treat it as a planning number, not an approval.
Next: work out repayments on your target loan with the repayment calculator, see the income needed for a target price with the income required calculator, or compare today's home loan rates.