Borrowing Capacity Calculator

We apply a standard serviceability model: gross income (PAYG, self-employed, rental, government payments) minus an APRA-aligned 3% interest rate buffer applied to your repayments, minus living expenses (typically benchmarked against the Household Expenditure Measure if your declared figure is lower), minus existing debt commitments (credit cards are assessed at 3.8% of the limit per month, not the balance). The result is the maximum loan amount most major lenders would approve at today’s rates.

Income type and stability move the dial the most — PAYG income is treated more favourably than recently commenced self-employment. Existing debts have an outsized impact: a $20,000 credit card limit can reduce borrowing capacity by $80,000–$100,000 even if the balance is zero. HECS/HELP repayments, dependants, and the size of your deposit all flow through to the final number. Conservative living expenses and closing unused credit lines often unlock more than borrowers expect.

Treat the figure as a guide, not a guarantee. Lender-specific policies (income shading, add-backs for self-employed applicants, professional-package discounts) can shift the result up or down. Before bidding at auction, request a formal pre-approval — that involves a credit check, document review, and a written confirmation from a specific lender. A mortgage broker can compare 40+ lenders quickly to find the one most favourable to your situation.