Borrowing Capacity Calculator

Estimate how much you can borrow based on your income and expenses

Income Details

$
$
Partner's income or additional income sources
$

Expenses & Debts

$
Groceries, utilities, transport, entertainment, etc.
$
Car loans, personal loans, etc.
$
Combined limit across all cards
$

Loan Parameters

%
$
Borrowing Capacity
$0
Max Property Price
$0
LVR
0%
Monthly Repayment
$0

Serviceability Assessment

Debt-to-Income Ratio 0%
Serviceability Ratio 0%

Income vs Expenses Breakdown

Detailed Breakdown

Understanding Borrowing Capacity

How lenders assess how much you can borrow

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Serviceability Assessment

Lenders assess whether you can afford loan repayments based on your income and expenses. They typically want your total debt repayments to be no more than 30-40% of your gross income.

Buffer Rate: Lenders assess at current rate + 3% to ensure you can still afford repayments if rates rise.
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Credit Cards Impact

Lenders assume you'll use 3% of your credit card limits each month, even if you pay them off in full. High limits can significantly reduce borrowing capacity.

Tip: Cancel unused cards or reduce limits before applying for a mortgage.
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HECS/HELP Debt

HECS debt reduces your borrowing capacity as lenders factor in the compulsory repayments based on your income level. The higher your income, the higher the HECS repayment percentage.

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Loan-to-Value Ratio (LVR)

LVR is the loan amount as a percentage of the property value. Most lenders require LVR below 80% to avoid Lenders Mortgage Insurance (LMI).

LMI: Insurance that protects the lender if you default. Can cost thousands to tens of thousands of dollars.
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Increase Your Capacity

Ways to boost borrowing power:

  • Reduce or cancel credit cards
  • Pay off existing debts
  • Increase your deposit
  • Add a co-borrower
  • Reduce discretionary expenses
  • Increase your income
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Important Warnings

Remember:

  • This is an estimate only
  • Each lender has different criteria
  • Borrow what you're comfortable with, not the maximum
  • Consider future expenses (kids, renovations)
  • Factor in rate rises and life changes
  • Get pre-approval before house hunting