Borrowing Power Calculator
Before you start looking at properties, it helps to know roughly what a lender is likely to offer you. This calculator gives you an estimate based on your income, living expenses, deposit, and a few other factors that affect how lenders assess your application. It takes about two minutes to run and gives you a realistic starting point before we talk.
How to use this calculator
Start by selecting whether you’re applying alone or with a partner, and whether the property will be your home or an investment. Enter your gross income before tax – if you’re paid weekly or fortnightly you can switch the frequency so you don’t have to convert it manually.
The deposit figure is what you plan to contribute from savings, not your total purchase budget. Living expenses is your honest monthly spend across all categories – groceries, utilities, subscriptions, eating out, everything. Lenders will assess this against their own benchmark figures, so being realistic here gives you a more accurate result.
The interest rate defaults to 6.50% p.a. as a general guide. If you have a pre-approval or a rate in mind, update it to see how it affects the figure. Loan term defaults to 30 years, which is standard for most home loans.
The Refine my estimate section lets you add HECS debt, credit card limits, and other loan repayments. These reduce your borrowing power because lenders factor them into their serviceability assessment. Add them if they apply – leaving them out will give you an overstated result.
The number the calculator returns is an estimate. Lenders each apply their own assessment rates, expense benchmarks, and credit policies, so the actual figure you’re offered will vary. Use this as a planning number, not a guaranteed outcome.
Common Questions
Why does this calculator show a different number to what my bank told me? Every lender uses a different serviceability model. They apply their own assessment rate (typically higher than the actual loan rate), their own living expense benchmarks, and their own policies on income types and liabilities. The figure here is a general estimate. Your bank’s number reflects their specific model, and a broker working across 30+ lenders will often find a lender whose model is more favourable for your situation.
Does HECS debt significantly affect borrowing power? Yes, more than most people expect. Lenders don’t look at your HECS balance – they look at your compulsory annual repayment, which is calculated as a percentage of your gross income. On a $90,000 salary that repayment can be around $7,000-$8,000 per year, which lenders treat as a recurring commitment. Add your HECS details in the Refine my estimate section to see the impact on your result.
Does running this calculator affect my credit score? No. This is a planning tool only – no credit check is performed and nothing is submitted to any lender or credit bureau. Your credit file is only accessed when you formally apply for a loan.
My borrowing power seems lower than I expected. What can I do? A few things move the number meaningfully: reducing credit card limits (even unused cards count against you), paying down existing debts, or increasing your deposit. In some cases the issue is the lender rather than your finances – different lenders treat income types, living expenses, and liabilities differently. It’s worth a conversation before you assume the number is fixed.
Your borrowing power is the starting point, not the full picture. The lender you go with, the rate you negotiate, and the loan structure you use all affect what you actually pay over time. If you want to talk through what your number means and which lenders are likely to offer the best outcome for your situation, book a call.
