Find out how much you can borrow based on your income and expenses. Uses the APRA 3% serviceability buffer applied by all Australian lenders.
Quick start — pick a scenario to pre-fill the calculator:
All figures are monthly unless otherwise stated.
| Item | Value |
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This estimate is for educational purposes only. Actual borrowing capacity varies between lenders based on their credit policies and your individual circumstances.
Add dependants or a HECS/HELP balance above to see the adjusted estimate.
Tap an option to see the instant impact on your borrowing capacity — this doesn't change the fields above.
Pick a comparison — uses your current details as the base and varies one factor.
Borrowing power (also called borrowing capacity) is the maximum amount a lender is willing to approve for a home loan, based on your income, living expenses, existing debts and the interest rate buffer regulators require banks to test against. It's not a fixed number — the same person can be offered meaningfully different amounts by different banks, since each lender weighs income, expenses and risk slightly differently. The calculator above gives a realistic estimate using the same core method Australian lenders use, so you can budget with confidence before you start house-hunting or speak to a broker.
Australian lenders use the Household Expenditure Measure (HEM) or your declared expenses (whichever is higher). APRA requires banks to add 3% to the assessment rate: if applying at 6.25%, your loan is stress-tested at 9.25%.
Most lenders require 5% of purchase price held for at least 3 months as "genuine savings". First Home Guarantee (FHBG) allows 5% deposit without LMI for eligible buyers.
When you apply for a home loan, your lender does not simply look at your income and multiply it by a fixed number. They run a serviceability assessment that considers your gross income, living expenses (using the higher of your declared expenses or a benchmark called the HEM), existing debts, credit card limits, and then applies a mandated buffer rate above the current market interest rate.
The result is your maximum borrowing capacity — the highest loan amount where your assessed repayment (at the buffer rate) still fits within your available income after all expenses.
APRA (the Australian Prudential Regulation Authority) requires all regulated lenders to assess home loan applications at the current interest rate plus 3%. With typical variable rates at approximately 6.5% in 2026, banks assess whether you can afford repayments at 9.5%.
Lenders assess your gross (before-tax) income from all reliable sources, then apply their own "shading" to less certain income types. Base salary is generally accepted at 100%. Regular overtime, bonuses and commissions are typically shaded to 80% of their average over the past 1–2 years, since they're less guaranteed than base pay. Rental income from investment properties is usually accepted at 75–80% of gross rent to allow for vacancies and costs. Casual and contract income is assessable but usually requires a longer history (often 6–12 months) to be counted at full value.
The Household Expenditure Measure (HEM) is a benchmark figure, based on Australian Bureau of Statistics household spending data, that estimates a household's minimum living costs by income level, family size and location. Lenders compare your declared expenses against the HEM for your situation and use whichever is higher in their serviceability calculation — so understating your expenses doesn't help, since the HEM floor still applies. Being realistic (and even itemising subscriptions or memberships you plan to cancel) can help present an accurate picture.
Personal loans, car loans, "buy now pay later" facilities and other credit commitments reduce your available income dollar-for-dollar based on their minimum monthly repayment — even if you always pay them off in full. Paying down or closing existing debts before applying is one of the most effective ways to lift your borrowing capacity.
Even if you pay your credit card off in full every month, lenders assess your limit — not your balance. Most banks count 3–3.8% of your total credit card limit as a monthly repayment obligation, so a $20,000 limit can reduce your borrowing capacity by roughly $60,000–$80,000. Buy Now Pay Later (BNPL) services such as Afterpay and Zip are increasingly treated the same way — as an ongoing credit facility — even though they don't charge interest, because they represent a recurring repayment commitment against your income.
A HECS-HELP balance doesn't stop you from getting a home loan, but the compulsory repayment (calculated as a percentage of your income once you're above the repayment threshold) is deducted from your assessable income. Someone on $90,000 with a HECS debt might have several thousand dollars a year in compulsory repayments factored in, which flows through to a noticeably lower maximum loan amount.
Each dependent child increases the HEM benchmark used to assess your living expenses, since lenders assume a larger household spends more on essentials. The exact loading varies by lender and the age/number of dependants, but it's common for each child to reduce borrowing capacity by tens of thousands of dollars. Our calculator includes an approximate dependant loading in the "Adjusted for Dependants & HECS" result above.
DTI compares your total debt (including the new loan) to your gross annual income. Most major Australian lenders treat a DTI above 6x as higher risk and apply extra scrutiny, with some capping new lending above this level altogether. A $600,000 total debt against $100,000 income is a DTI of 6x — right at the common threshold. The gauge above shows your DTI against this benchmark instantly.
LVR is your loan amount as a percentage of the property's value. It doesn't directly reduce your borrowing capacity (which is driven by serviceability), but it determines whether you'll need Lenders Mortgage Insurance and can affect the interest rate you're offered. Use our Deposit Impact Comparison above to see how a larger deposit lowers your LVR at the same purchase price.
These examples use typical bank assessment criteria: 6.5% variable rate + 3% buffer = 9.5% assessment rate, 30-year loan term, HEM living expenses benchmark, no HECS, no existing loans unless noted.
| Situation | Gross Income | Estimated Borrowing Capacity | Monthly Repayment at 6.5% |
|---|---|---|---|
| Single buyer | $70,000 | ~$330,000 – $390,000 | ~$2,085 – $2,466 |
| Single buyer | $100,000 | ~$500,000 – $590,000 | ~$3,160 – $3,731 |
| Single buyer | $130,000 | ~$670,000 – $790,000 | ~$4,234 – $4,993 |
| Couple combined | $120,000 | ~$560,000 – $660,000 | ~$3,540 – $4,171 |
| Couple combined | $160,000 | ~$760,000 – $900,000 | ~$4,803 – $5,690 |
| Couple combined | $200,000 | ~$970,000 – $1,140,000 | ~$6,131 – $7,206 |
| Deposit Amount | LVR | LMI Required? | First Home Guarantee Available? |
|---|---|---|---|
| 5% of property price | 95% | Yes (~$25,000-$35,000 on $700k) | Yes — avoids LMI |
| 10% of property price | 90% | Yes (~$15,000-$20,000 on $700k) | No (>5% deposit) |
| 15% of property price | 85% | Yes (~$8,000-$12,000 on $700k) | No |
| 20% of property price | 80% | No — LMI not required | No |
First home buyers can access schemes that materially change what's achievable: the First Home Guarantee lets eligible buyers purchase with a 5% deposit and no LMI, while state grants and stamp duty concessions reduce upfront costs. These schemes don't increase your borrowing capacity itself (that's still driven by income and expenses), but they reduce the deposit and cash needed to reach a given purchase price. Toggle "First home buyer" in the calculator above to see a reminder of what may apply to you.
Self-employed applicants are assessed on business income, usually averaged across two years of tax returns and notices of assessment, rather than payslips. Lenders often "add back" non-cash deductions like depreciation, but heavily discount irregular or one-off income. Some lenders offer low-doc loan options using BAS statements or an accountant's letter in place of full tax returns, typically at a slightly higher rate.
Casual and contract income is assessable, but most lenders want to see 6–12 months in the current role (or the same industry) before counting it in full. Some lenders average casual income over the past 2 years including any gaps; others annualise recent payslips. If you're new to casual or contract work, a larger deposit or a co-borrower can help offset a shorter income history.
Documents lenders typically request when assessing serviceability:
A rough step-by-step order for using this calculator as part of a real purchase:
Your borrowing power is shaped by far more than your salary — expenses, existing debts, credit card limits, dependants and HECS all move the final number, sometimes by hundreds of thousands of dollars. Use the calculator above to model your own situation, try the dependant/HECS adjustment and deposit comparison, then pair the result with our Mortgage Calculator to see what repayments would actually look like at your estimated capacity. Because lender policies vary, treat this as a well-informed starting point and confirm your exact capacity with a lender or mortgage broker before making an offer.
How much can I borrow on a $100,000 salary in Australia?
On a $100,000 salary with no existing debts and typical living expenses, most Australian lenders will approve borrowing of approximately $500,000 to $590,000 in 2026. The APRA 3% buffer means you are assessed at ~9.5% even though current rates are around 6.5%. HECS debt, credit cards, or dependants reduce this range.
What is the APRA serviceability buffer?
APRA requires all regulated lenders to test mortgage affordability at the current interest rate plus 3%. With variable rates around 6.5% in 2026, banks test whether you can afford repayments at 9.5%. This buffer ensures you have capacity to absorb rate increases before defaulting.
Does my HECS debt reduce how much I can borrow?
Yes. Lenders include compulsory HECS repayments in your monthly obligations. On a $90,000 salary with $50,000 HECS debt, approximately $2,800 per year in compulsory repayments is factored into your serviceability assessment, reducing borrowing capacity by roughly $30,000-$40,000.
Do credit card limits affect how much I can borrow?
Yes, significantly. Banks treat 3% of your total credit card limit as a monthly repayment commitment regardless of your actual balance. A $30,000 total credit card limit counts as $900/month in obligations, reducing borrowing capacity by approximately $90,000-$120,000. Cancel unused credit cards before applying.
What is the minimum house deposit in Australia?
Most lenders accept a minimum 5% deposit. However, deposits below 20% typically require Lenders Mortgage Insurance (LMI), which can cost $10,000-$35,000+. The First Home Guarantee allows eligible first home buyers to purchase with 5% deposit and no LMI. A 20% deposit avoids LMI entirely.
Can couples borrow more than singles?
Yes. Dual-income couples can borrow substantially more than single applicants because both incomes are assessed together. A couple earning a combined $160,000 typically can borrow approximately $760,000-$900,000 versus approximately $670,000-$790,000 for a single person on $130,000 — even though the combined income is higher.
How do banks calculate borrowing power?
Banks take your gross income, deduct the higher of your declared living expenses or the HEM benchmark, subtract existing debt repayments and credit card commitments, then work out the maximum loan whose repayment (at your rate plus the APRA buffer) still fits within what's left.
Does Buy Now Pay Later affect borrowing power?
Increasingly, yes. Many lenders now treat BNPL facilities like Afterpay or Zip as an ongoing credit commitment, similar to a credit card, even though they don't charge interest. Closing unused BNPL accounts before applying can help.
What is HEM (Household Expenditure Measure)?
HEM is a benchmark of minimum household living costs, based on ABS spending data, that varies by income, family size and location. Lenders use the higher of HEM or your declared expenses when assessing serviceability.
Can self-employed people get a home loan?
Yes. Lenders typically assess two years of tax returns and notices of assessment, with add-backs for non-cash deductions like depreciation. Some lenders offer low-doc options for self-employed borrowers using BAS statements, usually at a slightly higher rate.
Can I borrow with casual employment?
Yes, though most lenders want 6–12 months in your current casual role before counting the income at full value. Some average your income over the past two years, including any employment gaps.
Does overtime income count toward borrowing power?
Yes, but it's usually "shaded" — most lenders count around 80% of your average overtime, bonus or commission income over the past 1–2 years, since it's considered less reliable than base salary.
Does rental income count toward borrowing power?
Yes. Lenders typically accept 75–80% of gross rental income from investment properties, with the discount allowing for vacancies, management fees and maintenance costs.
How do dependants affect borrowing power?
Each dependent child increases the HEM living expense benchmark applied to your application, since a larger household is assumed to spend more on essentials. This can reduce borrowing capacity by tens of thousands of dollars per child — see the Adjusted for Dependants result in the calculator above.
Can I still borrow if I have existing loans?
Yes, but the minimum monthly repayment on car loans, personal loans and other credit reduces the income available for a new mortgage repayment, dollar for dollar. Paying these off before applying can materially increase your capacity.
What Debt-to-Income (DTI) ratio is acceptable to lenders?
Most major Australian lenders apply extra scrutiny above a DTI of 6x (total debt divided by gross income), and some cap new lending altogether above this level. The DTI gauge in the calculator above shows where your scenario sits.
What documents do banks need to assess borrowing power?
Typically recent payslips or tax returns, 3–6 months of bank statements, statements for any existing debts and credit cards, evidence of genuine savings, ID, and details of dependants and HECS/HELP balances.
How can I increase my borrowing power?
Reduce or cancel unused credit cards and BNPL accounts, pay down existing debts, save a larger deposit, consider a longer loan term, add a co-borrower, and compare multiple lenders since HEM and shading policies vary significantly between banks.
Can first home buyers borrow more than other buyers?
Not directly — your income and expenses determine borrowing capacity regardless of buyer status. However, first home buyer schemes like the First Home Guarantee reduce the deposit and upfront LMI cost needed to reach a given purchase price.
What interest rate do banks use to assess borrowing power?
Banks use your proposed loan rate plus a minimum 3 percentage point buffer required by APRA. If you're offered 6.25%, your serviceability is tested as though the rate were 9.25%, regardless of what you'll actually pay.
How accurate is this borrowing power calculator?
This calculator uses the same core method — HEM/declared expenses, the APRA buffer, and standard commitment shading — that Australian lenders apply, so it's a solid estimate. Actual approvals vary by lender policy and can differ by $50,000-$150,000 for the same applicant, so treat this as a guide rather than a guarantee.
Does my credit score affect borrowing power?
Credit score itself doesn't feed directly into the serviceability formula, but a poor credit history can affect which lenders will approve you at all, and may result in a higher interest rate — which in turn lowers your serviceability-based borrowing capacity.
Can I use a borrowing power calculator before getting pre-approval?
Yes — that's exactly what it's for. Use it to budget realistically before you start inspecting properties or approach a lender, then confirm the figure with formal pre-approval once you're ready to start looking seriously.
Does a bigger deposit increase my borrowing power?
Not directly — your maximum loan amount is driven by serviceability (income and expenses), not deposit size. However, a bigger deposit increases the maximum property price you can afford (loan + deposit) and can help you avoid LMI. See the Deposit Impact Comparison table above.
Can I borrow more with a longer loan term?
Generally yes. A 30-year term produces a lower assessed monthly repayment than a 20-year term for the same loan amount, which can increase your maximum borrowing capacity — at the cost of paying more total interest over the life of the loan.
Why do different lenders offer different borrowing amounts for the same person?
Each lender sets its own HEM benchmark, income shading rules, and risk appetite. It's common for the same applicant to receive borrowing capacity offers that differ by $50,000-$150,000 across different banks — which is why comparing lenders or using a broker is worthwhile.
Is pre-approval the same as guaranteed borrowing power?
No. Pre-approval is an indicative assessment, typically valid around 90 days, based on the information provided at the time. Final approval requires full verification of your finances and the specific property once you've made an offer.