Calculator
Borrowing power calculator
A realistic estimate of your maximum loan, stress-tested the way lenders are required to test it. Deliberately conservative — it is better to be pleasantly surprised.
You might borrow up to
$597,000
Stress-tested at 8.44% — your rate plus the 3% buffer lenders must add.
- Monthly repayment at your rate
- $3,367
- Monthly surplus used
- $4,568
- Expenses assessed
- $3,400
Your declared expenses came in under the benchmark minimum for a household this size, so the higher benchmark figure was used — lenders do the same.
A rough guide, not a pre-approval. Real lenders assess your credit file, employment stability, deposit source, and their own policy — outcomes vary widely between them. How lenders assess you explains what moves this number.
How this is calculated
- Gross income is reduced to net using resident income tax rates plus the 2% Medicare levy.
- Living expenses are set to the higher of what you declared and a household benchmark based on the number of applicants and dependants.
- Expenses and other debt repayments are subtracted from net monthly income to give a surplus, then shaded by 10% — lenders keep a margin rather than lending against every last dollar.
- That surplus is treated as the maximum repayment and converted back into a loan amount at your rate plus a 3% buffer, over the term you chose.
What it does not know
Your credit file, your employment stability, whether your income is base salary or commission, how long you have been self-employed, where your deposit came from, and the individual policy of each lender. Those factors drive most of the variation between real-world outcomes.
Income tax is approximated: offsets, HELP repayments, salary sacrifice and the Medicare levy reduction thresholds are not modelled. How lenders decide what you can borrow explains what actually happens to an application, and which levers are worth pulling before you apply.
FAQ
Borrowing power questions
Why is this number lower than I expected?
Mostly the buffer. Lenders must assess your loan at your rate plus at least 3%, so a loan at 5.5% is tested at 8.5%. On top of that, declared expenses are floored at a household benchmark and variable income is discounted. The result is a figure well below what the raw repayment would suggest you could manage.
Will a lender actually lend me this much?
Maybe more, maybe considerably less. This model does not know your credit history, how stable your employment is, where your deposit came from, or the specific policy of any lender. Two lenders can differ by over $150,000 on the same application. Get a real assessment before you make an offer.
How much difference do credit cards make?
A lot, because lenders assess the card limit rather than the balance. A $15,000 limit you never touch is commonly assessed at around $570 a month, which can reduce your borrowing power by more than $60,000. Cancelling or reducing unused limits is usually the fastest way to improve your position.
Should I declare lower living expenses to borrow more?
It will not work, and it can hurt you. Lenders compare your declared figure to a household benchmark and use whichever is higher. Understating expenses simply gets overridden, and if your bank statements contradict what you declared it raises questions about the whole application.
Does the calculator include my rent?
No, and you should not include rent you will stop paying once you move into the property. Do include rent if you are buying an investment property and will keep renting where you live.