AFT

Modelled with APRA-style assessment buffer (+3% on your rate)

Borrowing Power Calculator Australia (2026)

This borrowing power calculator estimates how much you may be able to borrow using a bank-style serviceability approach, not just a simple income multiple. It is designed for Australian borrowers who want clearer guidance before speaking with a broker, including first-home buyers, upgraders, refinancers, and investors comparing scenarios. The model factors in income shading, living expenses, credit card limits, existing loan repayments, and an APRA-style assessment buffer (+3% on your entered rate). You can compare conservative and aggressive capacity views, test a target loan amount, and understand whether monthly commitments look manageable once a new mortgage is added. Use it to set realistic expectations and identify practical levers to improve serviceability before submitting an application.

Your details

Assumptions: applicant incomes are taxed separately; secondary income is shaded to 80% and rental to 75%; assessed living expenses use the higher of your declared value and HEM-style benchmark; loan sizing is assessed at your rate + 3%.

Assessment basis

Got a target loan in mind? Switch to My target loan to assess a fixed amount.

Borrowers

Dependents

Income

≈ $10,000 / month

≈ $0 / month

≈ $0 / month

Expenses & liabilities

≈ $3,500 / month

≈ $0 / month

Loan assumptions

%

Results

View

Borrowing mode

Risk is evaluated on the selected capacity amount.

Estimated borrowing capacity (conservative)

Assessment rate; 70% of surplus. Capacity estimate only.

$326,275

Estimated borrowing capacity (aggressive)

Assessment rate; 90% of surplus. Higher repayment pressure.

$419,496

Monthly repayment (safe)

P&I at your contract rate on the selected capacity loan.

$1,998

These are borrowing-capacity estimates, not low-risk guarantees. Projected financial load can still be elevated if borrowing near the calculated limit.

Serviceability breakdown

Net monthly income (after tax)
$7,768
Assessable income / tax (annual)
$120,000 / $26,788
HEM-style benchmark (monthly)
$3,140
Bank-assessed living expenses
$3,500
Existing debt commitments used for assessment
−$450

Credit card limits are converted to an estimated monthly commitment for serviceability (about 3% of total limits), then added to other loan repayments.

Card limits commitment: $450 ($15,000 x 3%).

This is not a bank fee or charge - it is a lender assessment assumption that reduces borrowing capacity.

Surplus
$3,818
Estimated repayment capacity
$2,672 / $3,436

Based on bank assessment rate (interest + 3%)

At bank assessment rate (9.2%), your borrowing is based on repayments up to: $2,672 - $3,436 per month

Assessment rate
9.20% p.a.
Total monthly commitments
$2,448
Total debt ratio (% of net income)
31.5%
Current commitments before new loan
$450 (5.8%)

Projected overall financial load: Healthy

If you take this new loan, total commitments are projected to consume about 31.5% of your net monthly income.

New loan impact: Tight (higher risk zone) (in isolation)

Repayment is between 25% and 40% of net monthly income.

Ratio: 25.7% of net monthly income (safe capacity loan, contract-rate repayment).

Projected total debt ratio: 31.5% of net monthly income (existing loans + cards + new mortgage repayment).

Pro insights

  • Banks use minimum expense benchmarks (HEM-style floors). Here, assessed monthly expenses are the greater of what you declare and that benchmark.
  • Loans are assessed at a higher interest rate: your 6.20% p.a. becomes 9.20% p.a. for sizing (+3% APRA-style buffer).
  • Credit limits use a 3% per month imputed repayment for serviceability (simplified).
  • Secondary income counted at 80% and rental at 75% for assessable income (typical shading).

Improve borrowing power

  • Reduce declared living expenses by about $100/month → ~$8,546 higher safe borrowing (approx., assessment-rate bound).
  • Lower total card limits by $5,000 → ~$12,820 more safe borrowing (3% imputed monthly liability).
  • Add $5,000 primary annual income (applicant 1) → ~$24,927 more safe borrowing after tax (marginal estimate).
  • Illustrative co-borrower: second income ~$85,000/yr (taxed separately) could lift safe borrowing by ~$318,440 in this model — actual bank outcomes vary.
Also explore:Mortgage calculator·Stamp duty NSW

How borrowing power is calculated by banks

This calculator converts your income to a monthly basis, applies income shading for secondary and rental streams, estimates tax per applicant, and then measures surplus after bank-assessed living costs and existing liabilities. Bank-assessed living costs use the higher of your declared expenses and the HEM-style benchmark for your household profile.

The available repayment envelope is then mapped to loan size using a reverse principal-and-interest mortgage formula at an assessment rate (your rate +3%). We show both a conservative and aggressive capacity view so you can compare borrowing range with projected commitment pressure.

What reduces borrowing power with banks

Higher living expenses, higher existing debt repayments, and larger credit card limits all reduce serviceability. Even if cards are repaid each month, lenders typically apply an imputed repayment on total limit for assessment. Dependents also increase benchmark living costs in this model.

Income quality also matters: secondary and rental income are commonly shaded in credit policy. If you are planning a specific purchase, pair this tool with the mortgage calculator and NSW stamp duty calculator to assess repayment resilience and upfront costs together.

Why banks assess at a higher rate (APRA buffer)

Australian lenders generally assess home loans above the headline contract rate. In this calculator, assessment uses your entered rate plus 3%, which is a common APRA-aligned serviceability buffer. This does not change your contract repayment directly; it reduces the maximum loan size considered prudent under stress.

Want to see how this fits your real spending?

Pair borrowing-power estimates with day-to-day budgeting so your property plan stays grounded in actual cashflow.

Try budgeting app Velopes

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