Borrowing power calculator
A quick, honest estimate of how much a bank might lend you, worked out the way lenders do it, including the 3% rate buffer.
How it works
- Work out take-home pay with the 2026-27 tax rates and the Medicare levy.
- Subtract living expenses (yours, or a benchmark if that's higher), other repayments and 3.8% of credit card limits a month.
- Find the loan where that leftover money covers repayments at your rate plus 3%.
- Cap it at 6 times gross income, a limit most lenders work within.
max loan = surplus × (1 − (1 + r)−n) ÷ rHere r is the monthly test rate and n is the number of months.
Worked example
A single person on $100,000 with no kids or debts takes home $6,457 a month. Our benchmark expenses of $2,100 leave $4,357. Tested at 9% (a 6% rate plus the 3% buffer) over 30 years, that supports a loan of about $541,000, with actual repayments of about $3,244 a month at 6%. Add a $10,000 credit card limit and it drops to about $494,000.
Assumptions, checked 4 Nov 2026: the 3% buffer is from APRA, tax rates are the 2026-27 ATO resident rates, and the expense benchmarks are our own conservative estimates ($2,100 single or $3,000 couple a month, plus $650 for each child).
Common questions
How do banks work out borrowing power?
They take your after-tax income, subtract living expenses and existing debts, and check you could still make repayments if rates were 3 percentage points higher (APRA's serviceability buffer). This calculator follows the same steps.
Why is my result lower than I expected?
Usually because of the 3% buffer, credit card limits (banks count a repayment on the full limit, even if the balance is $0) or living expenses. Cutting an unused card limit can add tens of thousands to what you can borrow.
What living expenses should I enter?
Your real monthly spending, not counting rent or the mortgage you're applying for. If you leave it blank, we use a conservative benchmark based on household size, similar to the minimums banks use.
Is this what a bank will actually lend me?
No, it's an estimate. Every lender has its own policy, and some cap lending at about 6 times your gross income. Talk to a lender or broker for a real figure.