Borrowing Power Calculator Australia
Estimate your home loan borrowing power based on your household, income, expenses and deposit. Then check your mortgage readiness with a licensed broker.
Household Information
Children or financial dependants
How Borrowing Power Is Calculated
Lenders use a serviceability assessment to determine how much you can borrow. They compare your income to your expenses and existing commitments, then apply a buffer above the actual interest rate to allow for future rate rises. The amount left over after expenses and the buffer is used to estimate your maximum repayment, which is then converted into a loan amount.
Income
Lenders consider your gross income from employment, self-employment, rental income, bonuses, and government benefits. For couples, both incomes are typically combined. Some lenders apply different assessment rates to casual or contract income.
Debts and Liabilities
Existing debts such as car loans, personal loans, and credit card limits are deducted from your available income. Lenders use a percentage of your credit card limits as a commitment, even if you pay the balance in full. HECS/HELP repayments are also included.
Expenses
Living expenses, childcare costs, and other regular outgoings are factored in. Lenders may use the higher of your declared expenses or their own benchmarks, which vary by household size and location.
Dependants
Children and financial dependants increase the lender's assumed living expenses. This can reduce your borrowing capacity compared to a household with no dependants.
Lender Buffers
Lenders typically assess your ability to repay at an interest rate 2–3% above the actual rate. This buffer ensures you can still afford repayments if rates rise. Our calculator uses a 3% buffer in line with common practice.
Frequently asked questions
How accurate is this borrowing power calculator?
Lenders assess your income, expenses, credit history and their own policies when determining how much you can borrow. This calculator provides a general estimate based on common serviceability assumptions. Your actual borrowing capacity may differ based on lender criteria and policies.
Do lenders count credit card limits?
Yes. Lenders typically assess a percentage of your total credit card limits as a monthly commitment, even if you pay the balance in full. This is because you could draw on the limit at any time. Reducing or closing unused credit cards can improve your borrowing power.
Does having children affect borrowing power?
Yes. Lenders use living expense benchmarks that include dependants. Childcare costs, school fees, and general household expenses for children are factored into your serviceability assessment. More dependants generally mean higher assumed expenses and may reduce your borrowing capacity.
Can a broker increase borrowing power?
Yes. Different lenders have different policies for income verification, expense benchmarks, and assessment rates. A licensed mortgage broker can match you with lenders whose policies may suit your situation better, potentially increasing your borrowing capacity compared to a single lender.
This calculator provides general estimates only and does not constitute financial advice. CredoraLend is not a credit provider. We connect borrowers with licensed mortgage brokers.