Borrowing Power Estimator
Estimate how much you may be able to borrow based on your income, expenses, existing debts, and loan settings.
This is an educational estimate only. Lenders may use different rules, credit policies, and verification checks.
How to use this borrowing power calculator
This calculator gives you a quick estimate of your potential home loan size. Start by entering your total household income, then add your regular monthly expenses and any existing loan repayments. Set your expected interest rate, loan term, and deposit.
- Click Calculate Borrowing Power to see your estimate.
- Review both the estimated maximum loan and the estimated purchase price (loan + deposit).
- Try different values to see how your borrowing power changes.
What borrowing power actually means
Borrowing power is the amount a lender might be willing to lend you based on serviceability (your ability to make repayments), debt levels, and risk policy. It is not just about your salary. Two households with the same income can have very different borrowing limits depending on their expenses, existing debts, credit score, and loan settings.
Inputs that matter the most
1) Income
Higher stable income generally increases borrowing capacity. Lenders may treat base salary, bonuses, overtime, and rental income differently, so final assessed income may be lower than your headline number.
2) Living expenses
Higher recurring spending reduces the amount left over for mortgage repayments. Keeping a clear and realistic budget is one of the easiest ways to improve serviceability.
3) Existing debts
Credit cards, car loans, personal loans, and buy-now-pay-later obligations all reduce borrowing power. Even unused credit card limits can affect lender calculations.
4) Interest rate and buffer
Most lenders test your application at a higher “assessment rate” (actual rate + buffer). This stress test checks whether you could still repay if rates rise.
5) Loan term
A longer term lowers required monthly repayments, which can increase borrowing power. However, it also means more interest paid over the life of the loan.
How this calculator estimates your result
The calculator first works out your monthly surplus:
- Monthly surplus = (gross annual income ÷ 12 + other income) − living expenses − existing debt repayments
It then estimates the loan size that this surplus could service at the assessment rate over your chosen loan term. A debt-to-income cap is also applied in this model to prevent unrealistic outcomes.
Ways to improve borrowing power
- Reduce high-interest consumer debt before applying.
- Lower discretionary monthly spending for at least 3–6 months.
- Increase your deposit to reduce loan size and risk profile.
- Avoid applying for new credit cards right before your mortgage application.
- Keep employment stable and document all income clearly.
Common mistakes to avoid
- Using gross borrowing limits as a comfortable budget target.
- Ignoring additional purchase costs (stamp duty, legal fees, inspections, moving).
- Assuming all lenders assess income and expenses the same way.
- Forgetting future life changes like childcare, reduced work hours, or rate rises.
Frequently asked questions
Is borrowing power the same as pre-approval?
No. This tool is an estimate. Pre-approval is a lender process that includes document checks, credit assessment, and policy review.
Does a bigger deposit always increase borrowing power?
A bigger deposit can improve your overall buying position and reduce lender risk, but your borrowing limit is still mainly driven by serviceability and debt profile.
Should I borrow my maximum?
Not always. Borrowing less can reduce financial stress and leave room for rate rises, maintenance costs, and lifestyle flexibility.
Final note: Use this estimate as a planning tool, then speak with a qualified mortgage broker or lender for a personalized assessment.