Borrowing Power Calculator
Estimate how much you could borrow for a home or investment loan, tested the way Australian lenders do it: at your interest rate plus APRA's 3% buffer, with every property and card you already have.
Your situation
You could borrow about
$0
Enter your income and the interest rate you expect to pay on the new loan.
An estimate, not a loan offer. Lenders use their own living expense benchmarks, which may be higher than what you enter (especially with dependants). They differ on overtime, bonuses and rent (often counted at 80%), on negative gearing, and on how they test existing loans; here they are tested at each loan's rate plus 3%. Credit cards are counted at 3% of the limit a month; some lenders use 3.8%.
How lenders work out your borrowing power
A lender starts with your income after tax, takes off your living expenses and any other debt repayments, and checks that what's left would cover repayments on the new loan. They don't test at the rate you'll pay: APRA, the banking regulator, requires them to add a buffer of 3 percentage points, so a 6.5% loan is tested at 9.5%. That's why your borrowing power is lower than your budget might suggest.
If you already own property, lenders test those loans the same way, at their rate plus the buffer, and count part of the rent (usually 80%) as income. Since February 2026, APRA also limits banks to making 20% of their new loans at a debt-to-income ratio of six or more, counting every loan you have, not just the new one.
Worked example: a couple on $210,000
A couple earn $120,000 and $90,000 before tax, spend $4,500 a month on living costs, have one credit card with a $10,000 limit and expect a 6.5% rate over 30 years.
- Take-home pay per month
- $13,480
- Less living costs and card limit
- −$4,800
- Left for a home loan
- $8,680
- Tested at
- 9.5%
- Estimated borrowing power
- $1,032,000
That's 5.0 times their income. Closing the credit card would lift it by about $36,000, because lenders count 3% of the limit as a monthly repayment whether or not the card is used.
Common mistakes
Forgetting card limits
An unused $15,000 credit card can cut tens of thousands from your borrowing power. Lower the limit or close it before you apply.
Under-stating living costs
Lenders compare what you declare with a benchmark for your household and use the higher figure, so low numbers rarely help.
Leaving out existing loans
Every property loan you keep is tested at its rate plus the buffer, which usually costs more borrowing power than its rent adds.
Assuming the maximum is affordable
Borrowing power is what a lender may approve, not what is comfortable. Check the repayment against your real budget.