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.
How much can I borrow for a home loan?
A single applicant on $100,000 with no dependants, no other debts and living costs at the HEM benchmark could borrow about $568,000, indicatively, at 5.93% p.a. (6.11% comparison rate, calculated on a $150,000 loan over 25 years) as at 27 August 2026 plus the 3% APRA buffer over 30 years. Lender assessment varies.
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is based on a loan of $150,000 over a term of 25 years.
The information provided on this site is general in nature and does not take into account your objectives, financial situation or needs. Before acting on any information, consider whether it is appropriate for you and read the relevant Credit Guide and lender disclosures.
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.
Borrowing power by income, at today's rate
Using the lowest verified owner-occupier variable rate in Ratesniffers' 80% LVR snapshot, 5.93% p.a. (6.11% comparison rate, calculated on a $150,000 loan over 25 years) as at 27 August 2026, assessed near 8.93% p.a. once APRA's 3% serviceability buffer is added, here is an indicative maximum loan by gross annual income for a single applicant with no dependants, no other debts and living expenses at the HEM floor, a clean baseline so income is the only thing changing between rows. A partner's income, dependants, existing debts or credit card limits will move your own number up or down from this baseline; use the calculator above to model your actual situation.
| Gross annual income | Indicative max loan |
|---|---|
| $80,000 | $431,000 |
| $100,000 | $568,000 |
| $120,000 | $699,000 |
| $150,000 | $885,000 |
| $180,000 | $1,060,000 |
| $220,000 | $1,260,000 |
Assessed at 5.93% p.a. plus the 3% buffer, 30-year term, as at 27 August 2026. Indicative only; lender assessment varies.
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is based on a loan of $150,000 over a term of 25 years.
The information provided on this site is general in nature and does not take into account your objectives, financial situation or needs. Before acting on any information, consider whether it is appropriate for you and read the relevant Credit Guide and lender disclosures.
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 at 27 August 2026, the lowest verified owner-occupier variable rate in Ratesniffers' 80% LVR snapshot is 5.93% p.a. (6.11% comparison rate, calculated on a $150,000 loan over 25 years).
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.
How is borrowing power calculated?
A lender adds up assessable income, converts it to net monthly income after tax, then subtracts living expenses (the higher of what you declare and the HEM benchmark), repayments on existing debts, and a monthly charge on every credit card limit. What remains is the surplus available for the new loan. The lender then works out the largest loan whose repayment, assessed at the interest rate plus a 3% buffer over the loan term, fits inside that surplus. That loan size is your borrowing power at that lender; the calculator above runs the same steps.
Does a bigger deposit increase borrowing power?
No. Borrowing power is set by serviceability, the income left over after expenses, debts and the buffered repayment, and a bigger deposit does not change any of those inputs. What a bigger deposit changes is the loan-to-value ratio: it lets you buy a dearer property with the same loan, avoid lenders mortgage insurance under 80% LVR, and often qualify for a lower rate tier. A lower rate does lift borrowing power slightly, because the assessed repayment shrinks, but the deposit itself does not.
How much can I borrow on $100,000 salary?
Indicatively about $568,000 for a single applicant with no dependants, no other debts or credit cards, living expenses at the HEM benchmark and a 30-year term, assessed at the calculator's default rate as at 27 August 2026 plus the 3% APRA buffer. A partner's income lifts the figure, while dependants, car loans, HECS or credit card limits reduce it. It is indicative and general information only; every lender shades income and floors expenses differently, so the approved amount varies.
How much can a single income of $120,000 borrow?
For a solo applicant on $120,000 gross with no dependants, no other debts and living expenses at the HEM floor, the income table above shows the indicative maximum loan at today's lowest tracked variable rate under APRA's 3% buffer. Add a partner's income, dependants, existing debts or credit card limits and the number moves from that baseline.
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.
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is based on a loan of $150,000 over a term of 25 years.
The information provided on this site is general in nature and does not take into account your objectives, financial situation or needs. Before acting on any information, consider whether it is appropriate for you and read the relevant Credit Guide and lender disclosures.
Related calculators and rate tables
- Mortgage repayment calculator: the monthly repayment on the loan size this page says you could borrow.
- Income required calculator: the same serviceability test run backwards, from a target price to the income it needs.
- Compare current home loan rates: a lower rate lowers the assessed repayment and lifts borrowing power with it.
- Refinance home loan rates: for households whose existing loan is priced above the current range.
- Guide to borrowing power: the buffer, HEM and income shading rules explained in plain language.