How Much Can I Borrow?
Find out your borrowing power for an Australian home loan in 2026. Free, instant, and no sign-up required.
Borrowing Power Calculator
Estimate your borrowing capacity based on income, expenses, debts, rate, and term. Explore stress scenarios and DTI transparency.
Input Values
Applicant A
Salary or primary income amount.
Bonuses, overtime, rental, dividends, business income.
Household Expenses & Debts
Add common expenses
Loan Details
Results
Monthly Income (total)
$0.00
Monthly Expenses (total)
$0.00
Monthly Capacity
$0.00
Borrowing Power
$0.00
Monthly Repayment (chosen rate)
$0.00
Stress Borrowing Power (+Δ%)
$0.00
Debt-to-Income Ratio (DTI)
0.0%
Serviceability Ratio
0.0%
Indicative Max Purchase Price
$0.00
Borrowing Power vs Interest Rate
Sensitivity of borrowing power to rate changes around your selected rate
Monthly Expenses vs Remaining Income
Proportion of expenses relative to total monthly income
What Affects How Much You Can Borrow
Lenders assess several key factors when determining your borrowing capacity. Understanding these factors can help you maximise the amount you can borrow for a home loan.
Income
Your gross income is the single biggest factor. Lenders consider base salary, overtime, bonuses, rental income, and government payments. Joint applications combine both incomes.
Living Expenses
Banks use the Household Expenditure Measure (HEM) or your declared expenses, whichever is higher. Reducing discretionary spending before applying can improve your position.
Interest Rates
Higher interest rates reduce borrowing power. Lenders also add a buffer (typically 3%) to the current rate to stress-test your ability to repay if rates rise.
Loan-to-Value Ratio (LVR)
Most lenders cap LVR at 80% without Lenders Mortgage Insurance (LMI). A larger deposit means a lower LVR, which can unlock better rates and higher borrowing limits.
How Lenders Calculate Borrowing Power
Australian banks and lenders use a structured approach to assess how much you can borrow. Here are the three key components:
Serviceability Assessment
Lenders calculate whether you can comfortably meet repayments based on your net income after tax, minus living expenses and existing debt obligations. The surplus income determines your maximum loan amount.
Interest Rate Stress Test
APRA requires lenders to assess your ability to repay at a rate at least 3% above the loan product rate. This buffer ensures you can handle future rate increases. For example, if the loan rate is 6.0%, you're assessed at 9.0%.
Debt-to-Income (DTI) Ratio
Many lenders now impose DTI limits, typically capping total debt at 6 to 7 times your gross annual income. If your existing debts are high, this can limit your borrowing capacity regardless of your income.
Tips to Increase Your Borrowing Power
Pay down existing debts
Close unused credit cards and pay off personal loans. Even a $10,000 credit card limit can reduce your borrowing power by $50,000 or more.
Reduce living expenses
Cut discretionary spending in the 3 months before applying. Lenders review bank statements and use the higher of HEM or your actual spending.
Save a larger deposit
A 20% deposit avoids LMI costs and shows lenders financial discipline. It also reduces the loan amount needed and can unlock better rates.
Consider a joint application
Applying with a partner or co-borrower combines incomes, which typically increases your maximum borrowing amount significantly.
Choose a longer loan term
A 30-year loan has lower monthly repayments than a 25-year loan, which can increase your assessed borrowing capacity.
Shop around for lenders
Different lenders use different assessment criteria. A mortgage broker can help you find lenders whose policies suit your financial situation.