How much can I borrow? Borrowing power calculator

Borrowing power by income

What a single applicant and a couple can borrow on this calculator’s method, before you enter your own figures. Assumptions, as at 30 September 2026: no other debts, no dependants, living expenses at the indicative HEM floor for each household and income band (October 2026; $2,000 a month for a single person on $100,000, more for a couple or a higher income, as the HEM table below shows; the calculator above starts at $3,000, so enter a lower figure to reproduce a row), net income taken as 72% of gross, repayments capped at 85% of what is left, and a 9.2% assessment rate over 30 years. That rate is the 6.2% average rate on new owner-occupier variable loans in July 2026 (Reserve Bank of Australia, statistical table F6) plus the 3 percentage point serviceability buffer APRA confirmed on 28 May 2026. Every figure moves with the rate: at 10.2% each row is about 8% lower, at 11.2% about 15% lower. Figures are rounded to the nearest $1,000.

Couple: both partners earn the income shown, so the $100,000 row is a $200,000 household, and carries the higher living-expense floor of a couple in a higher income band. Add a 20% deposit for the purchase price (a $166,000 loan buys about $208,000). A credit card limit, a car loan or HECS repayments come off the surplus before the loan is worked out, so treat each figure as a ceiling and run your own numbers above.

The living-expense floor: indicative HEM by household

Lenders compare the living expenses you declare with the Household Expenditure Measure (HEM) for a household like yours and use whichever is higher, so declaring less than HEM does not lift your borrowing power. The real HEM tables are licensed to lenders and not published. This calculator applies the indicative monthly figures below (October 2026), by household and gross household income band, for a capital city; regional households are taken at 92% of the capital figure.

Indicative figures, Your Property Guide estimate, October 2026. The Melbourne Institute's HEM tables are licensed to lenders and not published; these follow the published method and the ranges comparison sites report, scaled by household, income band and location. A lender's own figure will differ. HEM excludes rent or mortgage repayments; school fees, childcare, insurance, HECS and loan repayments are assessed on top of it. For context, the Australian Bureau of Statistics’ last full Household Expenditure Survey (2015-16) put average weekly household spending on goods and services at $1,425, about $6,200 a month including housing; HEM sits well below average spending by design.

How banks assess your borrowing capacity

Australian banks use a serviceability assessment to determine the maximum loan you can afford. The process works roughly as follows.

1. Gross income. Your total income (wages, salary, rental income, etc.) from all applicants is added together.
2. Net income. An after-tax estimate is calculated. This calculator uses a simple 72% net factor as an approximation.
3. Living expenses (HEM). Banks deduct your living costs. They use the higher of your declared expenses or the HEM benchmark, a minimum expense figure that varies by household size.
4. Existing debts. All existing monthly debt repayments (credit cards, car loans, personal loans, other mortgages) are deducted.
5. Serviceability buffer. APRA requires banks to test your repayment capacity at your actual rate plus 3 percentage points. This is why the default assessment rate is 9.2%, above the 6.2% average new variable rate of July 2026.
6. Maximum loan. From the remaining surplus, the bank back-calculates the loan amount whose repayments fit within approximately 85 to 90% of that surplus.

The biggest levers on your borrowing power

Income matters most, but a few moves can shift the number meaningfully in either direction.

Credit card limits, not balances

Banks count the full limit of every credit card you hold, not just what you owe. A $20,000 unused card can shave $80,000 to $100,000 off your borrowing capacity. Cancelling cards you don’t use is often the single biggest thing you can do before applying.

Existing debts and HECS

Personal loans, car loans, BNPL accounts and HECS / HELP debt all reduce borrowing capacity. HECS in particular is treated as a recurring expense by every lender, but its impact varies, some lenders are stricter than others. A broker who knows lender policy can often place the same applicant with a lender that takes a softer view.

Living expenses below HEM

If you genuinely live below the HEM benchmark, declaring real (lower) expenses helps, but only if the lender accepts your declaration over the benchmark. Most apply the higher of the two as a floor.

Joint application versus single

Adding a second income usually lifts the cap substantially, but adds another applicant’s expenses and dependants to the calculation too. For couples it almost always helps; for guarantor or family-pledge arrangements the maths gets more complex.

What this calculator doesn’t do

• It doesn’t apply any specific lender’s income-shading policy.
• It doesn’t factor in self-employed income (typically requires 2 years of financials, with policy varying widely).
• It doesn’t model rental income from an investment property (treated differently from salary).
• It doesn’t cover guarantor or family-pledge structures.
• It doesn’t apply LMI or scheme-specific guarantees (FHBG, FHG, Help to Buy).

For any of those, run the basic numbers here, then verify with a broker or a participating lender. Get connected if you want a free intro to one.