Borrowing Power Calculator

Applicant details

Number of adults ?
Number of children ?
What type of loan do you need? ?
My/our housing situation will be ?
Where will I be living?
I live in the capital of this state.

Income details

Please enter your pre-tax income in each box. Our calculator will work out your tax automatically.
  • Income details
  • Base income p.a.
  • Tax free income p.a.?
  • Rental income per week?
  • ApplicantApp 1
  • $
  • $
  • $

Commitment details

New mortgages

  • Loan amount
  • Term ?
  • Interest only periodIOP ?
  • Rate type ?
  • InvestmentInvt ?
  • $

Commitment details

Current mortgages

  • Loan amount
  • Rate ?
  • Term ?
  • IOP ?
  • Rate type ?
  • InvestmentInvt ?
  • Repaid ?
  • $

Commitment details

Current commitments

Total credit card limits ?
$
Total personal loan repayments per month
$
Total car loan repayments per month
$
HECs/HELP repayments per month ?
$

Contact a mortgage broker

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Results

Applicant details

This calculator is designed to help you work out how much different banks will allow you to borrow when applying for a home loan.

Although it uses the exact same method as those lenders, you should always consider your own personal circumstances when deciding how much you should borrow.

How can I increase my borrowing power?

If you can’t borrow as much as you would like then you should consider changing your circumstances so you can qualify for a larger loan.

  • Cancel your credit cards.
  • Switch your current loans to interest only (acceptable to some lenders).
  • Fix the rate on your current loans (acceptable to some lenders).
  • Choose a lender that can include overtime, bonus and other income.
  • Choose a lender that allows you to borrow more.

Assessing your borrowing power is closely linked to the living expenses you declare in the lender’s fact find.

More than ever, the focus has been on how banks compare your living expenses to the Household Expenditure Method (HEM) benchmark.

Speak to our mortgage brokers by calling 1300 889 743 or fill in our free assessment form to find out which banks can lend you the most.

Should I borrow to my limit?

In most cases, it doesn’t make sense to borrow to your limit. If life throws you a curve ball then you’ll be unable to recover.

Having a healthy cashflow as well as some funds on standby will help you to ride out many of the small problems in life.

You should look ahead and consider if you will have children or if your housing needs or income will change. Borrow a suitable amount for your future income and expenses.

It’s ok to borrow closer to your limit if you are at the beginning of your career, have a regularly increasing income and are not planning to have children right away. This can allow you to buy the home that will suit you for many years to come without requiring you to sell and buy a new property in a few years time.

How can we help?

Our mortgage brokers are accredited with all major lenders such as ANZ, Bankwest, Commonwealth Bank (CBA), National Australia Bank, St George, Westpac (WBC) and many more. We also have access to their serviceability calculators which means we can calculate your borrowing power before submitting a home loan application.

Call us on 1300 889 743 or fill in our free assessment form and we’ll work with you to get you the amount that you need.

  • Matilda

    Can I not show some of my credit cards while applying for a home loan?

  • Hi Matilda,

    Lenders view non-disclosure of debts as a serious offence and you shouldn’t do such. If you have more credit cards than what’s necessary, then you can reduce the limit, as reducing the limit will improve the amount you can borrow on your home loan. Moreover, if you have unused credit cards, it is best to cancel them.

  • S Lee

    A friend told me that he was able to get a mortgage using his credit card to help with the deposit. Is this really possible?

  • Hi there,
    Yes, it’s possible to get a mortgage deposit using a credit card. This can help you cover the deposit costs but it doesn’t get around the genuine savings requirement. Please check out the “Mortgage deposit using a credit card” page to find out whether or not this is the right option for you:
    https://www.homeloanexperts.com.au/genuine-savings/mortgage-deposit-using-credit-card/

  • Mit

    If I’m buying a rural property that will be producing some income but not fully commercial, will it be considered agribusiness anyway?

  • Hello Mit,
    Rural properties that have a turnover of at least $20,000 a year are usually consider income-producing. However, there are other factors a valuer will consider as well. This includes:
    – Whether or not the income from agricultural activies has produced a profit ahead of the cost of owning the property in 3 of the last 5 years, including the current year.
    – Certainty in the valuer about your intention to develop the land for the purposes of undertaking agricultural activities.

  • Reese

    I am a casual worker and most of the bank managers I’ve talked with seem hesitant to lend to me due to my employment status. How much should I be able to borrow up to? Assuming I can meet all serviceability requirements..

  • Hello Reese,

    Although most lenders may lend only up to 90%, we may be able to help you get a 95% home loan if you’re in a strong financial position and have been in your job for 6 to 12 months. It’s much easier if you have a guarantor. This way you may be able to borrow 100%! Please call 1300 889 743 if you’d like to discuss this with an expert home loan specialist.

  • Ducksworth

    What about investment property borrowing power? How is that calculated?

  • Hi,
    Most lenders calculate your investment property borrowing power based on a basic formula that adds up your monthly surplus. Some can even take into account your rental income as well as negative gearing and other tax benefits. Please check out the investment property borrowing power page to learn more:
    https://www.homeloanexperts.com.au/investment-loans/property-borrowing-power/

  • Alaina

    Hello there. I’ve heard conflicting things. Can you clarify at what interest rate do lenders assess your home loan? Is it at the rate you will pay or at a higher assessment rate?

  • Hi Alaina,
    When lenders assess your mortgage borrowing power, they assess it using a higher assessment rate as a buffer for interest rate fluctuations. They do not assess at the actual rates you’re getting. Generally speaking, they add 2% or more on top of your interest rate as buffer. For example, lenders may assess your borrowing power at 7.30% p.a. even though your actual rate may be 5.00% p.a. or less.

  • Davis

    Hi there, I’m trying to figure out the rental income to estimate my borrowing power. Can homeowners write their own indication of the income of their property?

  • Hi Davis,
    No, the rental income appraisal would need to be done by a licensed real estate agent or a bank valuer.

  • Andreea

    Hi, APRA announced changes to how ‘serviceability’ is calculated, does this mean my borrowing power is increased? By how much?

  • Hi Andreea,
    The Australian Prudential Regulation Authority (APRA) proposed amending their guidelines on how banks assess borrowers borrowing power. The proposed changes will likely lead to an increase in borrower’s maximum borrowing capacity. Currently, lenders are required to assess home loans on the ability of the borrower to repay at a mortgage rate higher of 7% or the home loan rate plus 2%. With most lenders using 7.25% to assess serviceability, APRA’s new suggested amendment could see people’s maximum borrowing capacity increase.

    Under the current model, a single borrower with an income of $100,000 p.a. with no dependents and standard living expenses while being assessed at 7.25% can borrow a maximum of $626,670 for a 30-year mortgage. (CBA calculator). However, with the new model, if the same borrower is assessed at 6% his maximum borrowing power increases to $713,034, an increase of $86,000 approximately. That’s roughly an increase of 14 per cent in your borrowing power.

  • Lowri

    Hi,
    I’m currently renting at $310 per week, which I would rather put towards paying off my own home instead of renting. But your borrowing calculator says I can borrow only up to $70,000. I receive $31,000 from centrelink and I have 3 children. The only debt I currently have is a $173 fortnightly car payment. I’m looking to purchase a $300,000 house. Can you explain why that is?

  • Hi Lowri,
    When lenders calculate your borrowing power they do not test it on actual interest rates, they have a buffer for interest rate fluctuations. They assess home loans with an additional 2.5% on top of your interest rate. So, in actuality even though your repayment may be $300 per week , you may be assessed at $500 per week. You need to pass this rate to qualify for a home loan. Unfortunately, we can’t do much to change lender policies.

  • Alessandra

    Hi, I’ve heard that your credit card limit affects your borrowing power. How much of an effect does reducing your credit limit have on your borrowing power? Let’s say I reduced my total credit limit from $20,000 to $10,000. How much more can I now borrow? Thanks.

  • Hi Alessandra,
    Lenders use your total credit limit to calculate how much of your monthly repayment goes towards paying off the credit card, irrespective of your actual credit card balance. If you were to reduce your credit card limit from $20,000 to $10,000, your borrowing power on a $100,000 income with no other debt will jump from $556,000 (approx) to $592,000 approx. Suffice to say it has a considerable impact on your borrowing power. We can provide you with an accurate borrowing power once we’re able to do a full assessment. Please fill in this enquiry form: https://www.homeloanexperts.com.au/free-quote so one of our specialist mortgage brokers can get in touch with you to discuss your situation.