Purchasing Power Calculator

We start with your borrowing capacity (income, expenses, debts, and an APRA 3% buffer), add your available deposit and savings, then subtract the upfront costs of buying — state-based stamp duty, conveyancing fees, building and pest inspection, lender fees, and LMI if your deposit is below 20%. The result is your true maximum purchase price, not just what a lender will lend you.

Borrowing capacity is what the bank will lend. Purchasing power is what you can actually spend at settlement. The gap can be $50,000–$80,000 once you factor in stamp duty (which varies dramatically by state — over $40,000 on an $850,000 NSW property without exemptions), legal fees, and inspection costs. Knowing both numbers prevents the common mistake of bidding at the borrowing-capacity ceiling and being short at settlement.

Once you know your purchasing power, target properties 5-10% below it to leave room for negotiation, rate buffers, and unexpected costs. If the number is lower than you hoped, the highest-impact levers are typically: reducing credit card limits, paying down small debts, increasing your deposit, or exploring first home buyer schemes like the First Home Guarantee (5% deposit, no LMI). A broker can also compare lenders to find one with more favourable serviceability for your situation.