Borrowing Power Calculator – How Much Can You Borrow?

Lenders work out what you can borrow from what is left over each month, not from what you earn. They shade your income, take off tax, HECS, living expenses and every commitment you already have, then test the leftover against a rate around 3 percentage points higher than the one you would actually pay. The calculator above runs it on your numbers, and the rest of this page walks through every step so you can see where the figure comes from.

Why we give you a range and not a single number

Every other borrowing power calculator in Australia gives you one figure. The trouble with a single figure is that it suggests the banks all agree with each other, and they do not. Run the same payslips past a full lender panel and the answers spread by roughly 20 to 30 per cent, which on an ordinary suburban purchase is often more than $100,000.

The spread comes from ordinary differences in lender policy. One lender might shade your overtime to half where another takes all of it, and expense benchmarks get loaded at some lenders and not at others. None of it is published anywhere you can see, so a single number was never going to be accurate.

Two lenders can look at the exact same payslips and land six figures apart on what you can borrow. That is why it is imperative that you are placed with the lender that suits your current situation. Your own bank will only ever tell you what product of theirs you fit in.

A worked example, from payslip to answer

Below is a couple earning $110,000 and $85,000 with one child, a $12,000 credit card limit and a HECS debt, taken through each step a lender works through.

Step 1 — Gross income

Step 2 — Tax

Step 3 — HECS / HELP

Step 4 — Living expenses

Step 5 — Existing commitments

Step 6 — Monthly surplus

Step 7 — Assessment rate

Step 8 — Maximum loan

L = S x [ 1 - (1 + r)^-n ] / r

They land at about $885,000 with a mainstream lender and $949,000 with the most generous on our panel. With $140,000 in cash that supports a purchase price of roughly $980,000, with the lenders mortgage insurance added to the loan rather than paid up front.

How a lender actually works this out

Lenders do not work from a percentage of your income. They work out what is left over after everything else has been paid, and the method is simple enough once you have watched it done.

The lender starts with your income and discounts the parts that are not guaranteed. Base salary counts in full. Overtime is usually shaded to somewhere between half and all of it depending on the lender, bonus and commission are typically averaged over two years and shaded, and rent from an investment property is shaded to around 80% to cover vacancy, management and maintenance. That shaded figure is your assessable income, and it is already lower than the number on your payslip.

Tax comes off. So does your compulsory HECS or HELP repayment, which is the step almost every public calculator skips even though it applies to most first home buyers. Living expenses come off next, and the lender will not just take your word for what you spend. It compares what you declared against the Household Expenditure Measure benchmark for a household of your size, in your state, at your income, and uses whichever is higher. HEM excludes rent, existing mortgage repayments, private health insurance and private school fees, so those get added on top rather than being covered by it.

Then your existing commitments come off. Credit cards are assessed at 3.5% of the limit every month, whether or not you owe anything on the card, so a $15,000 limit you never touch is treated as a $525 monthly commitment. Car loans, personal loans and buy-now-pay-later arrangements come off at their actual repayment. Existing home loans are assessed at their own rate plus the buffer rather than at what you currently pay, and a loan with another lender often carries about a percentage point of extra loading on top of that.

What is left is your monthly surplus. The lender then tests whether that surplus could cover the new loan at an assessment rate, not at the real rate. APRA requires a buffer of 3.00 percentage points above the product rate, so a loan advertised at 5.92% today is assessed at about 8.92%. The buffer is there so you can still afford the loan if rates go up after you buy.

The maximum loan is the present value of that surplus over a 30-year term at the assessment rate. Two more checks then run. Your debt-to-income ratio is total debt divided by gross income, and since 1 February 2026 APRA has capped lending at a ratio of 6 or above to 20% of any lender's new mortgage book, so a high ratio leaves you fewer lenders to choose from without ruling you out. And your loan-to-value ratio decides whether lenders mortgage insurance applies, which it does above 80%.

HECS and HELP debt, which most calculators ignore

If you have a HECS or HELP balance, your compulsory repayment comes out before the lender works out what you can service. On the 2026-27 thresholds nothing is payable below $69,528. Above that it is 15 cents in the dollar on the excess, stepping up to 17 cents above $129,717, and above $186,050 it becomes a flat 10% of your entire repayment income rather than just the part above the threshold.

On a $120,000 salary that is a real commitment, and it reduces borrowing capacity by tens of thousands. The same thresholds apply to VET Student Loans, SFSS and apprenticeship loans. Clearing the balance before you apply helps in some cases and wastes good deposit money in others, so it is worth checking first.

Investors: the rules changed on 12 May 2026

If you are buying an investment property, most public calculators are still running the old rules. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed the Senate on 25 June 2026. From 1 July 2027 negative gearing is limited to new builds, and properties held — or under a binding contract — at 7:30pm AEST on 12 May 2026 are grandfathered.

Lenders did not wait for the start date. Serviceability policies changed across the panel through May and June 2026. For an established property bought after the cutoff, interest deductions are now capped at the rental income when your capacity is assessed, so the negative gearing benefit that used to lift investor borrowing power is gone.

On a typical investor file that is around $250,000 of capacity gone. New builds, and any property you were already contracted on before the cutoff, are still assessed under the old rules.

Deposit, LMI and what it really costs

Below a 20% deposit, lenders mortgage insurance applies. It covers the lender if you default, you pay the premium, and the cost climbs sharply as your deposit gets smaller.

Two costs get missed regularly. Your state charges stamp duty on the LMI premium itself, adding roughly 8% on top. And LMI is usually capitalised into the loan rather than paid at settlement, so it does not come out of your cash to close but does increase what you repay.

First home buyers should check the Australian Government 5% Deposit Scheme (renamed from the Home Guarantee Scheme on 1 October 2025) before assuming LMI is unavoidable. Both the income caps and the place caps were abolished at the same time, so the means test and the annual queue that used to rule people out are gone. It allows a 5% deposit with no LMI, up to a property price cap for your state.

Repayments by loan amount

These pages show the repayment at every rate, the income required, and a worked example at that level.

What actually moves the number

Each figure below comes from running the whole assessment again with one thing changed, so these are the real numbers for this household rather than a rule of thumb. Biggest gain first.

• Pay out the $28,000 HECS/HELP balance — adds about $63,000 to what they could borrow. The compulsory repayment stops, which lifts your surplus. Worth checking against what else the cash could do.
• Close the $12,000 of credit card limits you are not using — adds about $53,000 to what they could borrow. Lenders assess the limit rather than the balance, so a card sitting at zero still costs you.
• Reduce your card limits from $12,000 to $6,000 — adds about $26,000 to what they could borrow. If you want to keep a card, keeping a smaller limit still buys back capacity.

Most households find the same thing. Credit card limits and small consumer debts cost far more capacity than people expect, because a car loan repayment comes straight out of the surplus the lender is testing. If you want to pay a loan down faster once you are in, our extra repayment calculator and offset account checker show what that does over the life of the loan.

Questions people ask

How much can I borrow on my salary?

There is no single multiple, though most households land between four and six times gross income before debts are counted. Your surplus decides it, which is how two people on identical salaries end up $200,000 apart.

Why is the bank’s number lower than the calculators I have used?

Usually one of three things: your declared expenses were below the benchmark and the lender used the benchmark, a credit card limit you never use was assessed at 3.5% a month, or a HECS debt went uncounted. All three are handled above.

Does a high debt-to-income ratio mean I will be knocked back?

No, but fewer lenders will be open to you. Some have room in the APRA quota described above and some do not, and knowing which is which is the part a broker does for you.

The assumptions behind these numbers

Every figure we publish carries its source and how far we trust it. If a number here is out of date, the answer is wrong, so we review them on a schedule and show you the date we last checked.

Anything marked unverified is indicative and confirmed on application — it still guides the answer, we just cannot source a 2026 figure for it yet.
Last reviewed 2026-09-02 by Mansour Soltani, Credit Representative 527161. Rates are reviewed monthly and after any RBA move, HEM benchmarks quarterly, and HECS thresholds and tax rates every 1 July.

Related calculators

• Stamp duty calculator — duty and first home concessions by state.
• Loan repayment calculator — repayments on any amount, rate and term.
• Extra repayment calculator — what paying more each month does to the term.
• Offset account checker — whether an offset is worth the package fee.
• First home buyers and First Home Guarantee — the 5% deposit, no-LMI route.
• Find my loan match — the quiz that narrows the panel to lenders that fit you.