Borrowing Power
An indicative figure for what you may be able to borrow, from your income, dependants and existing debts.
Your household
Tax rates for this financial year.
An indicative estimate using a simplified expense benchmark and the standard serviceability buffer. Lenders apply their own criteria, so your actual borrowing power can differ materially. This is not a pre-approval or credit advice.
How this works
We take your income after tax and the Medicare levy, subtract a living-expense benchmark for your household and your existing debt repayments, then hold back a safety margin. What is left is treated as the most you could put toward a loan each month. We convert that into a loan size at an assessment rate, which is the market average plus the serviceability buffer lenders are required to apply.
- Resident tax rates for this financial year, with the 2% Medicare levy and its low-income reduction.
- A simplified living-expense benchmark. Lenders use the higher of their own benchmark and what you actually spend.
- The assessment rate starts at the market average plus 3%. You can change it.
- A 15% safety margin is held back from your monthly surplus. Bonus, overtime and rental income, HECS and credit card limits are not modelled.
Questions people ask
Lenders have to check you could still afford the loan if rates rose, so they test your repayments at a rate about 3 percentage points above the actual one. It is a regulatory buffer, and it is the main reason borrowing power is lower than people expect.
No. It is a starting point for a conversation. A pre-approval involves documents, a credit check and a specific lender’s policy.
Existing debts and credit card limits, the number of dependants, and how each lender treats variable income. Closing an unused credit card often helps more than people expect.