Australian Property

Borrowing Power Calculator Australia 2026

Estimate how much you can borrow for a home loan based on your income and expenses. Assessed at APRA's 9.2% serviceability rate.

Step 1 — Income

Person 1

Person 2 (optional)

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Your actual take-home pay after tax. This is the key figure used in the calculation.

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Step 2 — Monthly Expenses

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Step 6 — Your Deposit

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Assessed at 9.2% p.a. (current variable 6.2% + 3% APRA buffer), 30-year P&I loan.

Enter your income and expenses, then press Calculate.

How It Works

Australian lenders assess your borrowing power using a serviceability test. They take your gross income, subtract your living expenses, existing debts and a buffer rate (typically 3% above the actual rate), then calculate the maximum loan you can service.

The formula considers your Debt-to-Income (DTI) ratio — most lenders cap this at 6–7x your gross annual income. Our calculator applies APRA's buffer rate and standard expense benchmarks to give you a realistic estimate of what Australian lenders will approve.

Frequently Asked Questions

How do banks calculate borrowing power in Australia?
Banks use your gross income, subtract living expenses and existing debts, then apply a buffer rate (usually 3% above the current rate) to ensure you can still afford repayments if rates rise. The result determines your maximum loan amount.

What income do lenders count for a home loan?
Lenders count your base salary, regular overtime, bonuses (usually 80%), rental income (80%), and government benefits. Casual income typically needs 12 months of history. Self-employed borrowers usually need 2 years of tax returns.

How can I increase my borrowing power?
Pay off credit cards and personal loans, reduce living expenses, add a co-borrower, increase your deposit to avoid LMI, and consider a longer loan term. Closing unused credit cards also helps — lenders assess the limit, not the balance.

What is the APRA buffer rate?
APRA requires Australian lenders to assess your ability to repay at a rate at least 3% above the loan's interest rate. So if your rate is 6%, the bank tests affordability at 9%. This protects borrowers from rate rises.

Does borrowing power differ between banks?
Yes, significantly. Each lender uses different expense benchmarks, income shading and buffer calculations. Your borrowing power can vary by $50,000–$100,000+ between lenders for the same financial situation.

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Last updated: April 2026

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