This is an estimate only. Your real borrowing power depends on which of 50+ lenders fits your income shape, and it is always subject to lender assessment.
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Lenders take your gross income, apply shading (discounts for variable income, 80% for bonuses, 75% for rental, 90% for self-employed), then subtract your existing commitments and living expenses (the higher of your declared expenses or HEM benchmarks).
They test affordability at the assessment rate, your actual rate plus a 3% APRA buffer. Credit cards are assessed at 3.8% of the total limit regardless of balance.
Every lender calculates differently. The gap between the most and least generous lender can be $100,000+ in borrowing power. That's why using a broker matters.
What Should You Do With Your Borrowing Power Estimate?
Treat the figure above as a starting range, not a promise; as a rule of thumb, at a 9.2% assessment rate over 30 years, every $100 a month of spare surplus supports roughly $12,000 of loan. Lenders shade income differently, and the same application can produce borrowing power that differs by $100,000 or more between the most and least generous lender on my panel. Before you set an auction budget on this number, I check your income shape against actual lender policy, which matters most if you are self-employed, on contract, or earning bonus or rental income. My guide on how much you can borrow in 2026 walks through what lenders assess line by line.
If the estimate came in lower than you hoped, small changes move it materially: closing unused credit cards, clearing a car loan, or trimming declared expenses before you apply. Self-employed borrowers often have more room than the calculator suggests once the right lender reads their financials, and first home buyers can sometimes boost capacity with a guarantor loan. Either way, confirm the real number before you commit to a property; every figure here is an estimate only and subject to lender assessment.
How this calculator works
This calculator estimates borrowing power the way most Australian lenders assess a home loan application. It starts with your gross annual income, applies income shading to variable income types, deducts an estimated HECS/HELP repayment, then subtracts your existing commitments and living expenses to find the monthly surplus available for loan repayments.
Affordability is tested at an assessment rate equal to your selected interest rate plus a 3 percentage point serviceability buffer, consistent with current APRA guidance. The maximum loan is the amount your monthly surplus can service at that assessment rate over the selected loan term, calculated with the standard amortisation formula and rounded down to the nearest $1,000.
Key assumptions used by the calculator:
- Income shading: PAYG salary counted at 100%, casual or contract income at 80%, self-employed income at 90%, bonus and commission at 80%, rental income at 75%.
- HECS/HELP: an annual repayment is estimated from combined gross salary using income-banded repayment rates from 1% to 10% and deducted from assessed income.
- Credit cards: assessed at 3.8% of the total limit per month, regardless of the balance owing.
- Living expenses: the higher of your declared monthly expenses or a HEM-style floor of $2,400 per month plus $500 per dependant.
- Assessment rate: your selected rate plus a 3% buffer, applied over the selected term with monthly compounding.
This is a general estimate only, not credit advice or a loan offer. Every lender applies its own policy, shading rates, and expense benchmarks, so actual borrowing power varies from lender to lender.
Should You Refinance Instead?
Whatever brought you to this page, it is worth knowing what your current loan should cost today. Lenders reserve their sharpest rates for new customers, so long-term borrowers quietly pay a loyalty premium. John reviews your rate against 50+ lenders for free and tells you plainly whether a refinance beats your current deal.
Borrowing power FAQ
Typical switching costs run from about $700 to $1,200, covering discharge fees, government registration and a new application. On a $600,000 loan, a 0.50% rate cut saves about $181 a month, so most Sydney refinances recover their costs within three to nine months.
Often, yes, on larger balances. A 0.25% cut on a $600,000 loan saves about $91 a month, roughly $1,095 a year, which typically repays switching costs inside a year. Below that, the case depends on your balance, remaining term and fees; John runs the break-even numbers for you for free.
Most refinances settle within two to four weeks from application. Fast-track digital discharges can be quicker; a slow discharging lender is the most common delay. John manages the whole process, including chasing your current bank.