Borrowing Power Calculator
This calculator applies the assessment rules lenders actually use — the APRA 3% interest buffer, living-expense floors and credit-card treatment — rather than the flattering estimates comparison sites prefer. Your true ceiling still varies between lenders by $50,000–$150,000 for the same application; that spread is exactly where a broker earns their keep.
Assumes 30-year P&I, credit cards assessed at 3.8% of limit monthly, and minimum expense floors. Estimate only — lender policies differ materially.
Why every lender gives a different number
Each lender applies its own expense benchmarks (HEM), shades variable income differently — overtime, bonus, commission and rental income might count at 100% with one assessor and 60% with another — and treats existing debts by its own rules. Self-employed and multi-entity income widens the spread further. The practical consequence: the lender you happen to ask first sets a ceiling that may be tens of thousands below your genuine market capacity. We model your file against multiple lenders' actual calculators before anything is lodged.
How to increase your borrowing power
The levers, in rough order of impact: close unused credit cards (limits count whether used or not); consolidate or clear small debts; document all income properly, especially variable and self-employed streams; run six clean months of bank statements; and pick the lender whose policy fits your income shape — read our complete borrowing power guide for the full playbook, or start the first home process with the scheme stack included.
Frequently Asked Questions
- Why does the calculator add 3% to my rate?
- Because lenders must — APRA requires serviceability assessed at your rate plus a 3-point buffer, proving you could still pay if rates rose. It's the main reason your borrowing power is lower than the repayment you feel you could afford.
- Is this estimate the same as pre-approval?
- No — it's a directional model. Pre-approval is a lender's assessed decision on your documented file. We convert one into the other by preparing your file completely and choosing the lender whose policy suits it.
- Do credit cards really reduce borrowing power?
- Substantially: lenders assess roughly 3.8% of your total limits as a monthly commitment, used or not. A $20,000 unused limit can cost tens of thousands in capacity — closing it is the fastest borrowing-power raise there is.
Turn the estimate into an answer
Calculators model arithmetic; lending runs on policy. A director will pressure-test your numbers against live lender policy — free, same business day.
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Reviewed by Brian Hermosilla, Director — 20+ years in banking & finance · CR 485802 · MFAA #716100. Estimates only; not credit or financial advice.