The Finance Algorithm

Borrowing Power Calculator

How much you could borrow, worked out the way lenders test it

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$100k

Before tax income

$
$0

Leave the slider at $0 if applying solo

$
$3k

Food, utilities, transport: lenders use HEM if too low

$
$0

Car loans, personal loans and other monthly repayments. Enter credit cards below instead.

$

The total limit on all your cards, even ones you clear each month. Lenders count 3% of it as a monthly repayment.

Lenders deduct the compulsory HELP repayment from your income.

%
6.8%

APRA adds a 3% buffer on top when assessing, so the average rate is tested at 9.80%.

The button asks our AI to explain these figures in words.

Your borrowing power

Maximum borrowing

$400,620

Monthly repayment

$2,612

At your entered rate

Tested at

9.80%

Rate + APRA buffer

This loan is 4.0× your gross income

Since 1 February 2026 APRA has limited each bank's new loans at six times income or more to 20% of its lending, so loans at that level are harder to get.

4.01×Under 6×
  • Under 6×
  • 6× or more

Every dollar of monthly gross income, allocated

At max borrowing, $2,612/month would go to repayments. Surplus is what's left over.

$8,334monthly gross
Tax22.5%
Living36.0%
Repayment31.3%
Surplus10.1%

How much more (or less) you could borrow if rates moved

Same income & expenses: just the rate changes.

$480k-2%@ 4.80%$437k-1%@ 5.80%$401kCurrent@ 6.80%$369k+1%@ 7.80%$341k+2%@ 8.80%
Lenders test the loan at your rate plus APRA's 3% buffer, and they apply their own minimum for living expenses (the Household Expenditure Measure), which isn't published. If your expenses are below it, the lender's figure will be lower than this one.

How it works

Your borrowing power is the largest loan a lender will approve. Lenders work out what's left of your income after tax, living expenses and other debts, then test whether that covers the repayments at your rate plus APRA's 3 percentage point buffer. This calculator follows the same steps with 2026-27 tax rates, HELP repayments and APRA's guidance on credit cards.

  1. 1Enter your gross annual income (before tax)
  2. 2Add partner income if applying jointly
  3. 3Enter your monthly living expenses
  4. 4Include any existing debt repayments
  5. 5Add your credit card limits and whether either of you has a HELP debt
  6. 6Get your estimated borrowing power

The figures today

As of 7 November 2026, the lowest variable home loan rate is 5.93%, from SCCU's BROKER HOME LOAN, while the typical best across 104 institutions is 6.38%. The lowest 3-year fixed home loan rate is 6.24%, from Credit Union SA's 3-Year Fixed 40 Year Home Loan Package, while the typical best across 80 institutions is 6.69%. The RBA cash rate is 4.85%. Those are for an owner-occupier paying principal and interest at an 80% LVR.

The average new owner-occupier home loan was $842,000 in NSW and $664,000 in Victoria in the June quarter 2026, from the ABS. A two-bedroom unit on a new lease in NSW rents for a typical $785 a week.

Home loan rates todayWho passed on the last RBA moveHouse prices and loan sizesRents by postcode

Worked examples

Single First Home Buyer

Taylor earns $85,000, has $2,500 monthly expenses, no other debts and a $5,000 credit card limit.

Your gross annual income
$85,000
Partner's gross annual income
$0
Monthly living expenses
$2,500
Monthly debt repayments
$0
Credit card limits
$5,000
HELP / HECS debt
None
Interest rate
6.8%

Estimated borrowing power: about $343,000, tested at the average variable rate plus APRA's 3% buffer. The card counts as $150 a month, so closing it would lift the figure to about $360,000.

Couple with a HELP Debt

Chris earns $100,000 and Sam $80,000. They spend $4,500 a month including their two children, have a $500/month car loan, and Chris has a HELP debt.

Your gross annual income
$100,000
Partner's gross annual income
$80,000
Monthly living expenses
$4,500
Monthly debt repayments
$500
Credit card limits
$0
HELP / HECS debt
You
Interest rate
6.8%

Estimated borrowing power: about $742,000. Chris's compulsory HELP repayment is about $4,571 a year, and paying off the car loan would lift the figure to about $800,000.

Questions people ask

Why is my borrowing power less than expected?
Lenders test you at your rate plus a 3% buffer, use the higher of your declared expenses and their HEM benchmark, and often count bonus or overtime at less than its full amount. Credit card limits also count against you even if you clear the balance each month.
How can I increase my borrowing power?
Close or reduce credit card limits, pay off other debts, cut spending that shows on your bank statements, or apply with a partner. Lenders' policies on bonus and overtime income differ, so it can be worth asking more than one.
Does HECS/HELP affect borrowing power?
Yes. Lenders deduct the compulsory repayment, which from 2026-27 is 15% of income above $69,528. At $85,000 that's $2,321 a year, which cut borrowing power by about $22,000 when tested at 9.8% - choose HELP debt above to see the effect on yours.

The terms, in plain English

Serviceability
Your ability to make loan repayments. Lenders test this at your rate + 3% buffer to ensure you can handle rate rises.
HEM (Household Expenditure Measure)
A benchmark of minimum living expenses, published to lenders by the Melbourne Institute, that lenders use when your declared expenses are lower. The figures aren't public, so this calculator uses the expenses you enter.
Buffer Rate
An additional 3% added to the loan rate when assessing if you can afford repayments. Required by APRA.
Pre-approval
A conditional approval for a loan amount, usually valid for about three months depending on the lender, and subject to final checks before settlement.

Official sources

Calculate Your Repayments

See exactly what you'll pay each month once you know how much you can borrow.

Check if You Need LMI

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Stress Test Your Loan

See if you can handle rate rises by testing your budget at higher rates.