Borrowing Power Calculator (with APRA 3% Buffer)

Banks don't lend on your salary — they lend on what's left after tax, living expenses, existing debts, and a stress-test 3% above the actual rate. This calculator does the same maths.

Leave 0 if applying solo
Leave 0 to use a HEM-style benchmark
Car loans, personal loans, HECS handled below
Assessed at this rate + 3% buffer
Estimated borrowing power
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30-year P&I term, single-household assessment, income taxed at 2026-27 resident rates. Lenders' policies differ — treat this as a realistic midpoint, not a quote.

Uses official 2026-27 rates (last reviewed July 2026). Estimates only — see assumptions below.

How lenders actually calculate it

Every Australian lender runs a version of the same equation: net income − living expenses − existing commitments = surplus, then asks what loan that surplus services over 30 years at your rate plus the APRA 3% serviceability buffer. At a 5.75% product rate you're assessed at 8.75% — which is why borrowing power feels so much lower than the repayment you could "obviously afford".

The inputs that move the number most

Credit card limits — not balances, limits. Lenders assume ~3.8% of your total limit as a monthly commitment; a $20,000 limit you never use still deletes roughly $100,000 of borrowing power. Cancel or cut limits before applying.

HECS — under the marginal system, HECS costs a $100k earner about $4,570/year in repayments, trimming borrowing power by roughly $60,000–$80,000. Regulators have told banks to treat small, nearly-repaid HECS balances more leniently, so mention it to your broker.

Declared expenses — lenders compare your declaration to the Household Expenditure Measure (HEM) benchmark and use whichever is higher. Understating doesn't help; three months of statements will out you anyway.

Why every lender gives a different answer

Policies differ on overtime and bonus income (often shaded to 80%), rental income (usually 80% minus costs), casual income history, and how negative gearing is treated. Differences of $100,000+ between lenders for the same applicant are routine — which is the genuine case for using a broker to place the application, after using a calculator like this to set expectations.

Maximum borrowing ≠ sensible borrowing. The bank's number assumes HEM-level spending forever. Run the repayment through our mortgage calculator at 2% above today's rate and check you'd still sleep at night.

Frequently asked questions

How much can I borrow on a $100,000 salary?
Roughly $500,000–$560,000 as a single applicant with no debts and benchmark expenses at current rates — the exact figure varies by lender. A partner's income adds close to proportionally; debts and credit card limits subtract fast.
What is the APRA 3% buffer?
Lenders must check you could still afford repayments if rates rose 3 percentage points above your actual rate. At a 5.75% rate you're assessed as though paying 8.75%.
Does HECS reduce how much I can borrow?
Yes — the compulsory repayment reduces your net income in the servicing calculation, typically costing $60,000–$80,000 of capacity for a mid-range earner. Paying out a small remaining balance before applying sometimes makes sense.
Do unused credit cards affect borrowing power?
Heavily. Lenders assess a monthly commitment on the full credit limit even at a $0 balance — about 3.8% of the limit per month. Cancel unused cards before applying.
Why do online calculators all give different numbers?
They make different assumptions about expenses, buffers and income shading. This one shows its assumptions (HEM-style floor, 3% buffer, 30-year term) so you can see exactly what's driving the result.

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