Borrowing power calculator
How much could a lender let you borrow?
This estimates how a lender might assess your borrowing power using standard serviceability methods: your income after tax, living expenses, existing commitments, and an assessment rate with a buffer. It is an estimate of how a lender might assess you, not an offer or a promise. Everything runs in your browser and nothing you enter is saved or sent.
RBA cash rate: 4.35% (as at August 2026)
How the borrowing power calculator works
Lenders work out how much you can borrow by checking whether your income comfortably covers your living costs, existing debts, and the new loan repayments. This calculator follows the same standard method.
It starts with your income after tax, calculated for each applicant separately. Some income types are counted at a reduced rate, the way lenders treat them: casual income and bonuses at 80%, rental income at 80%. It then subtracts living expenses using the Household Expenditure Measure (HEM) for your household, your credit card and other loan commitments, and the repayment on the new loan.
Existing debts are not counted at the repayment you make today. A lender works out what each debt would cost at a buffered rate over a standard term, calculated on the full credit limit rather than the balance owing, and counts whichever figure is higher. This is why a car loan you are close to paying off can still take a large bite out of your borrowing power, and why an unused credit card limit costs you.
The new loan is assessed at your interest rate plus a 3% buffer (with a floor of 5.30%), not your actual rate, so there is room if rates rise. Your borrowing power is the largest loan whose assessed repayment still leaves your income covering everything, which is where your net surplus ratio reaches 1.0.
Worked example: A single applicant earning $120,000 with no debts is assessed, at a 9.00% assessment rate over 30 years, as able to borrow roughly $641,000. The repayment shown alongside uses the actual rate you enter, not the higher assessment rate.
Assumptions
- Income tax estimated using FY2026-27 resident rates and a 2% Medicare levy.
- Tax is calculated for each applicant separately, never pooled, and the effective tax rate is applied to each income component.
- Casual income is taxed in full, then counted at 80%. Bonus and commission are counted at 80% before tax. Rental income is counted at 80% and not taxed.
- Child support, Family Tax Benefit, Carer Payment, and other non-taxable income are counted in full and not taxed.
- Living expenses use the Household Expenditure Measure (HEM) for your household type and income, with dependants capped at 3. There is no separate expenses input.
- Credit cards are assessed at 45.6% of the limit each year regardless of the balance, and are entered as a debt row like any other commitment.
- Each existing debt is counted at the higher of your declared repayment annualised, and the repayment that debt would need at your rate plus a 3% buffer (floored at 5.30%) on the full credit limit. Where the rate or remaining term is left blank, the floor rate and a 294 month term are used.
- Buy now pay later is counted at the balance owing or the annualised repayment, whichever is lower, and at whichever figure is provided if only one is.
- Debt to income compares the loan applied for plus every credit limit held against gross income before shading. Rental income is excluded from that income figure.
- Rent, board and child maintenance are counted only where you indicate they continue after settlement. Rent that stops when you move into the property is not a commitment.
- The assessment rate is your entered rate plus a 3% buffer, with a floor of 5.30%.
- Borrowing power is the loan whose repayment, at the assessment rate, brings your net surplus ratio to 1.0. The repayment shown alongside uses your entered rate.
- Repayments are principal and interest over the full term, with no offset, redraw, fees, or interest-only period. Fortnightly and weekly figures are true amortising equivalents of the monthly repayment, not an accelerated repayment schedule.
Frequently asked questions
Why is my car loan counted at more than I actually pay?
Lenders do not assess the repayment on your current contract. They work out what the debt would cost if it were charged at your rate plus a buffer, over a standard assessed term, on the full credit limit rather than the balance owing. Whichever is higher, your real repayment or that assessed figure, is the number used. A $35,000 car loan at 8.50% with $650 a month going out can be counted at closer to $910 a month.
Does an unused credit card limit affect how much I can borrow?
Yes. Lenders assess 45.6% of your total credit card limit as an annual commitment whether the card has a balance on it or not, because you could draw the full limit tomorrow. A $20,000 limit you never use is assessed as $9,120 a year of commitments. Reducing or closing limits before you apply is one of the few levers that works quickly.
What is a debt to income ratio and why does it matter?
It compares your total debt, including the loan you are applying for and every credit limit you hold, against your gross income before tax. A ratio of 6 means you would owe six times what you earn in a year. Many lenders look more closely above 6, particularly where the deposit is under 20%, and most treat above 8 as outside policy. It is a separate hurdle from serviceability, so it is possible to comfortably afford the repayments and still be declined on this measure.
How much can I borrow on a single income in Australia?
It depends on your income, living costs, and any existing debts. As a rough guide, a single person on an average full-time income with no other debts may be assessed to borrow somewhere around five to six times their income, but every lender differs. Enter your details above for an estimate.
Does child support count as income for a home loan?
Some lenders count child support and family payments, others do not, and conditions often apply (for example the age of the youngest child). This calculator counts non-taxable income like child support in full, but because policies vary so widely, this is exactly the kind of thing a broker can match to the right lender.
What is an assessment rate or serviceability buffer?
Lenders do not test your loan at your actual rate. They add a buffer (commonly 3%) to allow for rate rises, with a minimum floor rate. This calculator uses your rate plus 3%, floored at 5.30%. It is why your assessed borrowing power is lower than your actual repayments might suggest.
Why do lenders use HEM for living expenses?
The Household Expenditure Measure is a benchmark of typical household spending, scaled to your income and household size. Lenders use it as a minimum expense figure so that borrowing power is not overstated by understated expenses. A lender uses the higher of your declared expenses and HEM, but this calculator uses the HEM benchmark only, which is one reason a lender's real assessment can differ.
Is this a guarantee of how much I can borrow?
No. It is an estimate of how a lender might assess you using standard methods. Real approvals depend on your full application, credit history, employment, and each lender's specific policies, which vary significantly.
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Important
The results from this calculator are estimates for general information and education only. They are based on the assumptions stated and the figures you enter, and do not take your personal circumstances, lender policies, or eligibility into account. They are not financial advice, credit assistance, or an offer of credit. Speak to a licensed finance broker or your lender before making decisions. Broker Codex is a directory platform and does not provide credit assistance.
Lenders each apply their own assessment rates, income policies, and expense benchmarks. Your actual borrowing power can differ significantly from this estimate in either direction.