Borrowing Power Calculator
Estimate how much a lender might let you borrow, based on your income, living costs, debts and the 3% rate buffer banks must use.
Living expenses: lenders use the higher of your own figure and a household benchmark (like the HEM). Leave the box blank to use our benchmark. Tax is worked out at 2026–27 resident rates, including the low income tax offset and Medicare levy. Other income is counted at 80%, and credit cards at 3.8% of the limit each month.
Printed from ClearCalc (clearcalc.com.au/borrowing-power-calculator/). Estimates only, not financial advice.
How borrowing power is worked out
Lenders don't just multiply your salary. They check whether you could still afford the repayments if rates rose, after tax, living costs and other debts. This calculator follows the same steps:
- Take-home pay. Your income after tax and the Medicare levy, at 2026–27 rates. Each partner is taxed separately, which is why two incomes go further than one income of the same total.
- Living expenses. The higher of what you tell us and a benchmark for your household size and income, similar to the Household Expenditure Measure (HEM) most banks use.
- Other commitments. Car and personal loan repayments, plus about 3.8% of every credit card limit each month, even if you pay the card off in full.
- The rate test. APRA expects lenders to check you could repay at least 3 percentage points above your actual rate. At 6.0%, you're tested at 9.0%.
- The income cap. Many lenders limit total debt to about six times gross income, so we cap the result there too.
The spare cash left at the test rate is turned into a loan amount over your loan term. For example, a single person earning $100,000 with no debts and typical expenses could borrow roughly $539,000. If they spend $3,000 a month instead, that falls to about $429,000.
Ways to borrow more
- Cut or close credit cards. A $10,000 limit you never use can reduce your borrowing power by around $45,000.
- Pay off small debts such as car loans or buy now, pay later accounts before you apply.
- Choose a longer term. A 30-year loan gives the lowest repayment, so it supports the biggest loan.
- Grow your deposit. It doesn't change how much you can borrow, but it lifts the price you can pay and may avoid lenders mortgage insurance.
Borrowing power isn't the same as what you should borrow
The maximum a bank will lend can leave little room for rate rises, children or a drop in income. Check the repayment fits your real budget with the home loan calculator, see your pay after tax with the pay calculator, and test a rate rise with the interest rate rise calculator. For a quick look at common salaries, see borrowing power by salary.
Every lender has its own rules for expenses, income and buffers, so real offers can be 10–20% higher or lower than this estimate. A mortgage broker or lender can give you a pre-approval based on your full situation.
Frequently asked questions
How much can I borrow on a $100,000 salary?
A single applicant on $100,000 with no debts, no dependants and typical living costs could borrow roughly $539,000 at a 6.0% rate, tested at 9.0%. Spending more each month, having children or holding credit cards will lower that.
What is the serviceability buffer?
It's the margin APRA expects banks to add to your interest rate when checking whether you can afford a loan, currently at least 3 percentage points. If your rate is 6.0%, the bank checks you could make repayments at 9.0%.
Why do credit cards reduce my borrowing power?
Lenders assume you could max out your card at any time, so they count a monthly repayment of about 3–3.8% of the limit, even if your balance is zero. Lowering or closing unused cards can lift your borrowing power.
Is the 6 times income limit a rule?
Not a law, but APRA watches loans above six times income closely and many lenders limit or decline them. We cap the estimate at six times your gross income, less any credit card limits.
Official sources used for this calculator include: Moneysmart – Home loans, APRA – Australian Prudential Regulation Authority, Housing Australia – Home Guarantee Scheme. See how we calculate.
Reviewed by the ClearCalc team. Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.