How Much Can I Borrow?

A simplified formula for calculating borrowing power is:

[(Net Monthly Income – Monthly Expenses) ÷ Assessment Rate] × Loan Term

However, lenders use more complex calculations involving interest-rate buffers, minimum expense benchmarks, existing debts, credit-card limits and accepted income. A quick estimate is five to six times annual income.

For example, $90,000 × 5.5 equals $495,000. This is only a guide, as debts, dependants, expenses, HECS, loan structure and lender policy can significantly change the result.

First, identify what is reducing the result. Common causes include high credit-card limits, personal loans, living expenses, a short loan term, a small deposit or income the lender does not fully accept.

You may improve your position by reducing debt, closing unused cards, increasing your deposit or choosing a more suitable lender.

A broker can compare lender policies and explain whether your borrowing power could improve without submitting multiple unsuccessful applications.

The main factors are income, debts, living expenses, credit history, assets, deposit size, loan structure and property type. Lenders may discount overtime, bonuses, commission, rental income or self-employed earnings. They also consider credit-card limits, HECS, personal loans and household expenses.

A larger deposit may reduce the required loan, but it does not replace serviceability. Property restrictions, interest-only repayments and shorter loan terms can also reduce the amount available.

Eligible investors may be able to borrow up to 95% of a property’s value, although Lenders Mortgage Insurance generally applies above 80%. The available amount depends on income, debts, credit history, genuine savings, rental income, property type and lender policy.

You may also use equity from another property or consider a guarantor arrangement. However, the maximum loan-to-value ratio offered by a lender may still be higher than the amount your income can support.

You may improve borrowing capacity by reducing credit-card limits, paying off short-term debts, lowering genuine living expenses, increasing income or saving a larger deposit. Choosing the right lender can be equally important.

Lenders assess rental income, overtime, bonuses, existing mortgages and interest-only loans differently. The lender with the lowest advertised rate may not provide the highest borrowing capacity, so comparing servicing policies before applying can prevent unnecessary credit enquiries.

No. Each lender uses different assessment rates, expense benchmarks and rules for acceptable income and existing debts. Differences may include how they assess overtime, bonuses, rental income, credit cards, HECS, investment loans and interest-only repayments.

This means one lender may approve a higher amount than another for the same borrower. A borrowing-power estimate from one bank or calculator should not be treated as a market-wide result.

Yes. HECS-HELP repayments reduce the income available to service a home loan, which can lower borrowing power. The impact depends on your income, outstanding balance and the lender’s servicing policy.

From 30 September 2025, some borrowers who fail serviceability because of HECS may qualify for a lender exception that removes the repayment from the assessment. This is not automatic and should be confirmed with the lender before applying.

Online calculators provide a useful starting estimate but rely on general assumptions about income, expenses, interest rates and debts. They may not accurately assess overtime, bonuses, rental income, self-employed earnings, foreign income or multiple properties.

A broker can review your documents and apply the policies of several lenders. As a result, your actual borrowing power may be higher or lower than the calculator estimate. Use calculators for early budgeting, not as confirmation of approval.