How is borrowing power calculated?

Lenders work out your monthly surplus — your after-tax income minus living expenses and other debt commitments — then find the largest loan whose repayments that surplus can cover, at an assessment interest rate over the loan term (usually 30 years). This calculator does the same, using the standard loan-repayment maths.

What is the 3% serviceability buffer?

APRA requires lenders to test whether you could still afford the loan if interest rates rose. They add a buffer of 3 percentage points to your actual rate and assess your repayments at that higher "assessment rate". It's been 3 percentage points since October 2021.

Why does it use after-tax income?

Lenders assess what actually lands in your bank account, so borrowing power is based on net (after-tax) income, not your gross salary. This calculator runs your salary through Australian income tax (using Fairsum's verified rates) to get your net income.

The Household Expenditure Measure is a benchmark of typical living costs that lenders use as a minimum. If the expenses you enter are below the lender's HEM figure, they'll use the higher HEM amount — which can lower your real borrowing power. HEM figures are proprietary, so this calculator uses the expenses you enter and flags the HEM floor.

Is this an estimate or a loan offer?

An estimate. Every lender has its own policies — expense benchmarks, how they treat overtime or bonuses, credit-card assumptions, and minimum interest-rate floors all differ. Use this as a guide and confirm with a lender or mortgage broker. It also excludes costs like LMI and stamp duty.

Borrowing Power Calculator — Australia

Estimate how much you could borrow for a home loan. Enter your income, expenses and debts — we work out your after-tax income and apply the APRA serviceability buffer to estimate your maximum loan and property price. It's a guide, not a loan offer.

Financial year

Your gross salary

Partner gross salary (optional)

Living expenses (per month)

Other debt repayments (per month)

Credit-card limit (total)

Interest rate (your rate)

Loan term (years)

Deposit (optional)

Estimated borrowing power

FY2026-27

Max property price $0.

Estimate only — not a loan offer. Lenders differ (expense floors, income shading, fees), so your real limit may be lower.

Monthly serviceability

Net (after-tax) income$0.00

Living expenses− $0.00

Debt + card commitments− $0.00

Monthly surplus$0.00

The loan

Assessment rate (6% + 3% buffer)9.00%

Repayment at 6% (per month)$0.00

Maximum loan$0

Lenders stress-test your repayments at your rate plus an APRA buffer of 3% — so you're assessed at 9.00%, not your actual rate. They also apply a minimum living-expense benchmark (HEM), so if your real spending is higher, your borrowing power will be lower.

Source & currency. Assessment rate = your rate + the APRA serviceability buffer of 3 percentage points (in place since October 2021). After-tax income uses Fairsum's verified resident income-tax rates for the selected year. Credit-card commitment assumes ~3.8% of the limit per month and a 30-year term — typical conventions that vary by lender. Verified against APRA/ATO on 2026-06-30.

Assumptions. Net (after-tax) income · principal & interest over the term at a constant rate · each applicant taxed individually · base salary only (no overtime/bonus shading) · credit-card limit assessed at ~3.8%/month · excludes the HEM expense floor, LMI, stamp duty and purchase costs · figures are rounded.

Disclaimer. This is a general estimate only and is not a loan offer, lender assessment, or financial advice. Every lender applies its own policies — minimum living-expense benchmarks (HEM), how they treat variable income, credit-card assumptions, and interest-rate floors all differ — so your real borrowing power may be lower. It excludes Lenders Mortgage Insurance, stamp duty and other purchase costs. Your figures are calculated in your browser and aren't sent anywhere. Confirm any figure with a lender or licensed mortgage broker.

Frequently asked questions

How is borrowing power calculated?: Lenders work out your monthly surplus — your after-tax income minus living expenses and other debt commitments — then find the largest loan whose repayments that surplus can cover, at an assessment interest rate over the loan term (usually 30 years). This calculator does the same, using the standard loan-repayment maths.
What is the 3% serviceability buffer?: APRA requires lenders to test whether you could still afford the loan if interest rates rose. They add a buffer of 3 percentage points to your actual rate and assess your repayments at that higher "assessment rate". It's been 3 percentage points since October 2021.
Why does it use after-tax income?: Lenders assess what actually lands in your bank account, so borrowing power is based on net (after-tax) income, not your gross salary. This calculator runs your salary through Australian income tax (using Fairsum's verified rates) to get your net income.
What is HEM?: The Household Expenditure Measure is a benchmark of typical living costs that lenders use as a minimum. If the expenses you enter are below the lender's HEM figure, they'll use the higher HEM amount — which can lower your real borrowing power. HEM figures are proprietary, so this calculator uses the expenses you enter and flags the HEM floor.
Is this an estimate or a loan offer?: An estimate. Every lender has its own policies — expense benchmarks, how they treat overtime or bonuses, credit-card assumptions, and minimum interest-rate floors all differ. Use this as a guide and confirm with a lender or mortgage broker. It also excludes costs like LMI and stamp duty.