Calculators
Borrowing Capacity
Calculate how much you can borrow for a home loan.
How to use this
What the inputs actually mean
Income means gross income before tax, and it should include only what you can document. Commitments means every liability, including credit card and overdraft limits whether you use them or not, because lenders count the limit rather than the balance. Dependants matter more than people expect, since they lift the expense benchmark a lender applies.
How to read the result
Treat it as a ceiling under ideal assumptions rather than a pre-approval. It models affordability, which is only one of the two tests you have to pass. The second is the debt to income cap that most lenders now apply at around six times gross income, and on higher incomes that cap frequently binds before affordability does.
Why a real assessment usually comes back lower
Lenders test your repayments at a rate three percentage points above the actual rate, replace your declared living expenses with a benchmark if yours look low, and apply their own policy overlays on income type. A tool cannot see any of that, which is why the gap between an online figure and an approval is normal rather than a mistake.
Frequently asked questions
Why is my real borrowing capacity lower than this estimate?
Because a lender tests affordability at a rate three percentage points above the actual rate, applies its own living expense benchmarks, and separately caps total debt at around six times gross income. A calculator models none of those overlays.
Do credit card limits reduce how much I can borrow?
Yes, and more than most people expect. Lenders generally assess the full limit as though it were drawn, so an unused card still costs you capacity. Reducing or closing limits before you apply is one of the simplest improvements available.
Does a HECS debt affect this figure?
It does in a real assessment. Your compulsory repayment is deducted from the income a lender can use, so capacity falls even though the debt never appears on your credit file.
Is borrowing capacity the same as purchasing power?
No. Borrowing capacity is the loan a lender might approve. Purchasing power is that loan plus your deposit, less the cash costs such as transfer duty, and it is the number that actually sets your price range.
How can I increase my borrowing capacity?
Clear or reduce consumer debts and undrawn limits, avoid new liabilities in the months before applying, keep documented income stable, and have the file matched to a lender whose policy suits your income type.
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