Borrowing Power Calculator
An estimate of how much you could borrow for a home loan from income, expenses and debts, assessed at the loan rate plus APRA’s 3% serviceability buffer.
Estimated maximum loan
$491,000An estimate for a single applicant earning $100,000 with $2,500 a month of living expenses: net income of $6,457 a month leaves $3,957 for repayments, which supports a loan of about $491,000 when assessed at 9.00% (6% plus the 3% buffer) over 30 years.
| Net income per month (after tax) | $6,456.67 |
|---|---|
| Expenses and commitments per month | −$2,500.00 |
| Surplus for repayments | $3,956.67 |
| Assessment rate (6% + 3%) | 9.00% |
| Repayment at the assessment rate | $3,950.70/month |
| Actual repayment at 6% | $2,943.79/month |
How this was calculated
| Net monthly income after tax and Medicare (one applicant) | $6,456.67 |
|---|---|
| Living expenses per month | -$2,500.00 |
| Monthly surplus available for repayments | $3,956.67 |
| Assessment rate: 6.00% + 3% buffer = 9.00%repayment on the maximum loan at the assessment rate over 30 years | $3,950.70 |
| Estimated maximum loan (rounded down to $1,000) | $491,000.00 |
An estimate of the mechanics lenders use, not a lending decision. Each lender applies its own expense benchmark, income shading (for overtime, bonuses and rent), debt-to-income limits and policies.
An estimate for a single applicant earning $100,000 with $2,500 a month of living expenses: net income of $6,457 a month leaves $3,957 for repayments, which supports a loan of about $491,000 when assessed at 9.00% (6% plus the 3% buffer) over 30 years.
Source: APRA Last verified How we keep this accurate
How lenders work out what you can borrow
Every lender starts from the same question: after tax, living costs and existing debts, how much of your income is left each month, and how big a loan would that surplus service if interest rates rose? The calculation is:
- Net income. Gross salary less income tax, Medicare levy and any compulsory HELP repayment. Overtime, bonuses, commissions and rental income are usually counted at 80% or less.
- Expenses and commitments. Your declared living expenses, or the Household Expenditure Measure (HEM) benchmark for your household if that is higher; repayments on car and personal loans; and a notional repayment on credit cards, commonly 3.8% of the limit per month whether or not the card is used.
- The buffer. Since 2021 APRA requires lenders to test repayments at the loan’s rate plus at least 3 percentage points. At a 6% rate you are assessed at 9%.
- The loan. The amount whose principal-and-interest repayment at the assessment rate over the term (30 years) equals the surplus.
Worked example
A single applicant on $100,000 with $2,500 a month of living expenses and no other debts: net income $6,457 a month, surplus $3,957, which services a loan of about $491,000 at 9% (6% plus the buffer). The actual repayment at 6% would be about $2,944 a month. A second income of $60,000 lifts the estimate to roughly $889,000 if expenses rise to $3,500.
Why the real figure may differ
Lenders shade some income types, apply their own expense floors, cap debt-to-income ratios (APRA limits high-DTI lending to 20% of new loans above six times income), treat dependants and rent differently, and price loans by loan-to-value ratio. Treat the result as the mechanics, not a pre-approval; a mortgage broker or lender will run your figures against a specific policy.
Frequently asked questions
How much can I borrow on a $100,000 salary?
Roughly $490,000 as a single applicant with $2,500 a month of expenses and no other debts, assessed at 6% plus the 3% buffer over 30 years. With $500 of car loan repayments and a $10,000 credit card limit the estimate falls to about $380,000. Two applicants earning $100,000 and $60,000 with $3,500 of expenses could borrow around $889,000. Lender policy on expenses and income shading moves these figures by tens of thousands.
What is the APRA serviceability buffer?
A rule that lenders must assess whether you could still afford the loan if the interest rate were at least 3 percentage points higher than the rate you are offered. It has been 3 points since October 2021. On a 6% loan you are assessed at 9%, which reduces borrowing capacity by roughly 25% compared with assessing at the actual rate (about $659,000 falls to $491,000 in the worked example).
Do credit cards reduce borrowing power?
Yes, even if you pay them off every month. Lenders assume a monthly commitment of about 3.8% of the total limit (some use 3% or the minimum repayment). A $20,000 limit counts as $760 a month, which cuts borrowing capacity by around $90,000. Closing unused cards or lowering limits before applying is one of the cheapest ways to increase what you can borrow.
What is HEM and how do lenders use it?
The Household Expenditure Measure, a benchmark of basic living costs by household type, location and income produced by the Melbourne Institute. Lenders use the higher of your declared expenses and HEM. For a single adult in a capital city it is around $2,200 to $2,600 a month in 2026; a couple with two children around $4,500 to $5,500. Declaring unrealistically low expenses does not help because HEM sets the floor.
Does a HECS/HELP debt affect borrowing power?
Yes. The compulsory repayment is deducted from income like tax, reducing the surplus. Since 2025–26 it applies only to income above the threshold: in 2026–27 nil up to $69,528, then 15 cents per dollar above that, 17 cents per dollar above $129,717, and 10% of total repayment income from $186,051. On $100,000 the repayment is about $4,571 a year, which lowers the estimate by roughly $47,000. Since 2025 lenders may exclude HELP debts expected to be repaid within a year.
How much deposit do I need?
Most lenders want 20% of the price to avoid lenders mortgage insurance, so $180,000 on a $900,000 home, plus stamp duty and costs. With LMI a 5% to 10% deposit is possible, and the Home Guarantee Scheme lets eligible buyers borrow with 5% and no LMI. Deposit size does not change the serviceability calculation above, but it sets the maximum price you can pay: price = deposit + loan − costs.
Sources and assumptions
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