How Much Can I Borrow?

Your borrowing power is calculated as:

[(Net Monthly Income - Monthly Expenses) / Assessment Rate] x Loan Term in Months

If the calculation is too long and difficult to understand, we have a quicker alternative.

You can estimate your borrowing power by multiplying your annual gross income by 5 or 6. For example, if your annual gross income is $90,000, then your estimated borrowing power would be: 90,000 x 5.5 = $495,000

Please note that when calculating using the quick estimate, there are many factors that lenders will need to consider like:

• Existing debts (credit cards, personal loans)
• Living expenses
• Number of dependants
• Loan interest rate (with a buffer applied)
• Loan term

This can happen if you have high debt, a low credit score, a high loan-to-value ratio, high expenses or a small deposit.

If your borrowing power is lower than expected, you can take steps to improve your financial health and even explore alternative lending options.

This is where the expertise of a mortgage broker can help.

At Home Loan Experts, we can negotiate with lenders to secure competitive rates and terms, maximising your borrowing power and saving you money over the life of the loan. Call us on 1300 889 743 or complete our free online enquiry form today.

There are eight factors that affect your borrowing power:

• Income: A higher and more consistent income could enable you to borrow more.
• Debts and financial commitments: Large existing debts can decrease borrowing power.
• Living expenses: High expenses may signal instability to lenders, lowering your borrowing power.
• Credit history: A good credit history indicates reliability and may increase borrowing power.
• Assets: Tangible and intangible assets add to credibility and borrowing capacity.
• Deposit size: Larger deposits reduce lender risk, meaning you may be able to borrow more.
• Home loan type, term and interest rate: Lower fees and interest rates increase borrowing power.
• Value of the property: Property valuation influences the maximum loan amount.

You can borrow up to 95% of the property value, but Lenders Mortgage Insurance (LMI) might apply if you borrow over 80%.

You may be able to borrow more than 95% by using a guarantor loan or by accessing equity from another property.

Your borrowing power will depend on your income, family size, location, current debts, type of loan and the lender that you choose. The easiest way to increase your borrowing power is to choose a lender that can lend more to someone in your situation. Some banks are conservative when lending to investors, some use higher estimates for living expenses in their assessments, and others will lend you less if you have an interest-only loan. However, you can also change your situation to improve your borrowing capacity.

No. Every lender applies their own policies and buffers, which is why results can differ.

Yes. Lenders treat it as ongoing debt, which reduces your usable income and therefore your borrowing power.

From 30 September 2025, customers unable to meet serviceability requirements due to an existing HECS debt may be eligible for an exception that removes the HECS repayment from their servicing assessment.