Borrowing Power Calculator — How Much Can I Borrow? 2026
How much an Australian lender will let you borrow from net income after 2026–27 tax, living expenses, loans and credit-card limits, assessed at your rate plus the 3% APRA buffer, with the 6× income cap and the price your deposit supports.
| Net income after tax (monthly) | — |
|---|---|
| Commitments counted | — |
| Surplus available for repayments | — |
| Assessment rate (rate + 3% buffer) | — |
| Loan supported at the assessment rate | — |
| Debt-to-income ratio | — |
| Actual repayment at your rate | — |
| Purchase price with your deposit (80% / 90% LVR) | — |
In short
Australian lenders take net income after tax (plus 80% of rent), subtract living expenses (at least the HEM benchmark), loan repayments and 3.8% a month of every credit-card limit, and lend what the surplus supports at the loan rate plus a 3-percentage-point APRA buffer, capped around six times gross income — a couple on $110,000 and $70,000 with $4,200 living costs, a $450 car loan and $10,000 of card limits can borrow about $847,000 at 5.89%.
Who this is for: Buyers checking how much a lender will approve before house-hunting, and anyone wondering whether cutting card limits or a car loan would lift their limit.
How Australian lenders work out how much you can borrow
Serviceability starts with net income — your gross salary after tax, Medicare and LITO (2026–27 rates), plus 80% of any rental income — and subtracts your commitments: living expenses (the lender uses the higher of your figure and the HEM benchmark for your household), other loan repayments and 3.8% a month of every credit-card limit, used or not. What is left is the surplus available for a mortgage.
The surplus must cover the repayment not at today's rate but at the rate plus a 3 percentage point buffer required by APRA since 2021, which is why a 5.89% loan is assessed at 8.89%. The loan that surplus supports at the assessment rate is your borrowing power, further capped by most lenders at about six times gross income. The calculator then shows what you could pay for a home with your deposit at 80% LVR (no lenders mortgage insurance) and 90% LVR.
See also: Home Loan Repayment Calculator — Australia, Australian Income Tax Calculator 2026–27.
Assumptions
- Net income = gross minus 2026–27 tax, LITO and 2% Medicare; rental income counted at 80%.
- Commitments = living expenses (you should enter at least the HEM figure), other loan repayments and 3.8% a month of credit-card limits.
- Loan = surplus amortised at the rate plus 3% over the term; capped at 6× gross income.
- Lender floor rates, HELP repayments, dependants and income shading on bonuses are not modelled.
Worked example
Net income about $11,780 a month; commitments $4,200 + $450 + $380 = $5,030; surplus $6,750. At the 8.89% assessment rate that supports about $847,000 (4.7× gross income). The actual repayment at 5.89% would be $5,020 a month. With the $120,000 deposit: up to $600,000 at 80% LVR without LMI, or about $967,000 at 90% LVR with LMI, before stamp duty and costs.
Frequently asked questions
Why is my borrowing power lower than the bank’s online calculator?
Lenders apply HEM minimum expenses, shade variable income and add HECS and card limits; this calculator applies the same rules but your bank’s HEM figure for your postcode may be higher than the expenses you entered.
Does HECS/HELP debt reduce borrowing power?
Yes — the compulsory repayment (up to 10% of income) is treated as a monthly commitment; clearing a small balance can raise borrowing power noticeably.
Do unused credit cards matter?
Yes. Lenders count about 3.8% of every limit as a monthly commitment, so a $20,000 unused limit removes roughly $75,000 of borrowing power at current rates.
What is the 3% buffer?
APRA requires lenders to test whether you could still afford repayments if your rate rose by 3 percentage points; it applies to new loans and most refinances.
Is rental income counted in full?
Usually 70–80% to allow for vacancies and costs; the calculator uses 80%.
How much deposit do I need?
20% of the price avoids lenders mortgage insurance; 5–10% is possible with LMI or the federal Home Guarantee Scheme for first-home buyers.
What is HEM?
The Household Expenditure Measure — a benchmark of basic living costs by household type, income and postcode that lenders use as a floor for your declared expenses.
Does a HECS debt count?
Yes; the compulsory repayment percentage of your income is treated as an ongoing commitment.
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