Borrowing Power Calculator
Estimate how much a lender might let you borrow, based on your income, expenses and a standard interest rate buffer.
- Monthly surplus used to service the loan
- $5,000
- Assessment rate used (rate + buffer)
- 9.20%
This calculator provides estimates only. It is general information, not financial or taxation advice, and doesn't account for your full personal circumstances. Confirm figures with your lender or a licensed adviser before making a decision.
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How this calculator works
Lenders don't assess your borrowing power at today's advertised interest rate — they add a serviceability buffer (a standard practice guided by APRA, currently around 3 percentage points) to your rate first, to check you could still afford the repayments if rates rose. This calculator estimates your borrowing power the same way: it works out your monthly income left over after expenses and other debts, then calculates the largest loan you could service at the buffered rate.
Enter your net monthly income (after tax, combined if there's more than one applicant), your living expenses, any other debt repayments (credit cards, car loans, buy-now-pay-later), the rate you've been quoted, and the buffer. The calculator finds the loan amount whose repayment — at rate plus buffer — equals your monthly surplus.
Worked example: $8,000 net monthly income, $2,500 in living expenses and $500 in other debt repayments leaves a $5,000 monthly surplus. Assessed at 6.2% + a 3-point buffer (9.2%) over 30 years, that surplus supports a loan of around $610,460.
This is a simplified estimate — real lender assessments also weigh your credit history, dependents, employment type, existing assets, and use their own (often more conservative) expense benchmarks like the Household Expenditure Measure rather than your self-reported figure. Treat this as a ballpark, not a pre-approval.
Frequently asked questions
- Why does the calculator use a higher rate than I was quoted?
- Lenders test your ability to repay at a buffered rate — typically your rate plus around 3 percentage points — to make sure you could still service the loan if interest rates rise after settlement. This is standard practice across Australian lenders.
- Why might a lender offer me less than this estimate?
- Lenders use their own expense benchmarks (often higher than what people self-report), factor in dependents, credit score, employment type and existing liabilities like credit card limits (even undrawn), and each has its own risk appetite — so real offers commonly come in lower than a simplified estimate.
- Does increasing my deposit change my borrowing power?
- Not directly in this calculation — borrowing power here is about how much loan your income can service, not the property price. A bigger deposit reduces how much you need to borrow relative to a property's price, which is a separate question from how much a lender will lend you.