Borrowing Power Calculator
Estimate how much you can borrow for a home loan based on your income, expenses, and existing debts.
Leave as 0 for single applicant
Rent, food, transport, insurance, subscriptions — not existing debts
Car loans, personal loans, BNPL, etc.
Total limit across all cards (lenders use 3% of limit as a commitment)
Lenders assess at actual rate + ~3% buffer. Default 9% is typical.
How It Works
The calculator estimates your borrowing capacity using a simplified version of the bank serviceability test. It takes gross income minus tax, subtracts living expenses (applying HEM floors), existing loan repayments, credit card commitments (3% of limits), HELP repayments, and dependant costs. The remaining surplus is the amount available for mortgage repayments. It then reverse-engineers the maximum loan using the assessment rate and term.
Frequently Asked Questions
How do banks calculate borrowing power?
Banks calculate your net surplus income — gross income minus tax, living expenses (using the higher of declared expenses or HEM benchmark), existing loan repayments, credit card commitments (3% of limit), HELP repayments, and dependant costs. They then determine the loan amount serviceable at the assessment rate (typically actual rate + 3%).
Why do credit card limits reduce borrowing power?
Lenders assume you could draw your full credit limit at any time. They factor in about 3% of your total credit card limits as a monthly commitment, regardless of your actual balance. Reducing or cancelling unused cards can significantly boost borrowing power.
Does HELP debt affect borrowing?
Yes. Lenders include your compulsory HELP repayment (based on the ATO percentage of your income) as an ongoing commitment. For someone earning $90,000, that's about 4.5% of income — roughly $4,050/year or $338/month less borrowing capacity.
What is the HEM benchmark?
The Household Expenditure Measure (HEM) is a minimum living expense figure lenders use. If your declared expenses are lower than HEM for your household size, the bank will use HEM instead. It varies by income band, location, and number of dependants.
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