Borrowing Capacity Calculator

Borrowing capacity is an estimate of how much a lender may allow you to borrow based on your income, expenses, existing debts, dependants, deposit, interest rate assumptions, and lender assessment rules. It is not a formal loan approval, but it can help you understand your likely borrowing range before applying.

A borrowing capacity calculator estimates how much you may be able to borrow by assessing your income against your ongoing expenses, debts, living costs, credit limits, loan term, interest rate, and lender serviceability buffers. Different lenders use different policies, so your actual borrowing capacity can vary between banks.

Yes. HECS or HELP debt can reduce borrowing capacity because lenders factor compulsory repayments into your serviceability assessment. As a general guide, HECS debt may reduce borrowing capacity by around $25,000 to $45,000 for every $10,000 of debt, depending on your income, lender policy, and overall financial position.

Yes. Lenders usually assess credit cards based on the approved limit, not the amount owing. Many lenders use around 3.8% of the credit card limit as a monthly repayment commitment, while some may use around 3%. Reducing or closing unused credit card limits may improve borrowing capacity.

Most lenders assess credit card commitments using approximately 3.8% of the approved limit per month, although some lenders may use around 3%. This means a $10,000 credit card limit could be assessed as a monthly commitment of roughly $300 to $380, even if the card has no balance.

The APRA serviceability buffer is an additional interest rate margin lenders apply when assessing whether you can afford a home loan. A 3% buffer is commonly added on top of the proposed interest rate to test whether applicants could still afford repayments if rates increased. Some lenders may apply lower buffers, such as 1% or 2%, depending on the loan type and policy.

Each lender has its own assessment policy for income types, overtime, bonuses, rental income, self-employed income, living expenses, dependants, credit cards, existing debts, and serviceability buffers. This means one lender may offer a higher or lower borrowing amount than another, even when assessing the same borrower.

Reducing ongoing expenses can help, but lenders may still apply minimum household expenditure benchmarks. Paying down debts, reducing credit card limits, consolidating liabilities, increasing income, or choosing a lender with more suitable policy can often have a stronger impact on borrowing capacity.

Yes. Dependants usually increase the living expenses used in a lender’s assessment, which can reduce borrowing capacity. The impact depends on the number of dependants, household income, existing commitments, and the lender’s expense model.

No. A borrowing capacity calculator provides an estimate only. Formal approval depends on lender policy, credit history, income verification, expenses, property type, deposit, loan-to-value ratio, and supporting documents. A broker or lender can provide a more accurate assessment.

You may be able to improve borrowing capacity by reducing credit card limits, paying down personal loans or car loans, lowering discretionary expenses, increasing assessable income, extending the loan term, reviewing HECS or HELP debt impact, or comparing lenders with different serviceability policies.

A broker can compare lender policies, identify which banks may assess your situation more favourably, and help you understand what steps could improve your borrowing position before applying. This is especially useful if you have HECS debt, credit card limits, variable income, self-employed income, or multiple existing debts.