Borrowing Power Calculator
How much a bank might lend you, including the 3% serviceability buffer.
On $95,000 a year, you take home about $6,173 a month after tax. Take off $2,500 of living costs, and $3,673 a month is left for a home loan. Banks check you could still pay at 9.50% (6.5% plus the 3% buffer), so you could borrow about $436,857, with repayments of $2,761 a month at 6.5%.
| Take-home pay (after tax) | $6,173 |
| Living expenses | -$2,500 |
| Left for a home loan | $3,673 |
Monthly figures. An estimate: each bank has its own rules for bonuses, overtime, rental income and living costs, so a broker or lender may say more or less.
Each income is taxed separately at this year's resident rates (with the low income tax offset, Medicare levy and any HECS). Living costs are the higher of what you enter and a rough version of the benchmark banks use. Credit cards count as 3.8% of the limit a month. What's left must cover principal and interest repayments at your rate plus 3%, and the largest loan it covers is your borrowing power.
Rates checked September 2026 against the ATO and APRA's serviceability buffer guidance.
How banks work out how much you can borrow
A bank's first question is whether you could keep up the repayments if rates rose. It takes your income after tax, subtracts your living costs and every other debt, and checks that what's left would cover the loan at a higher test rate. The largest loan that passes is your borrowing power.
The test rate is your loan rate plus a 3% buffer, which APRA, the banking regulator, expects every bank to use at a minimum. On a 6.5% loan the bank checks you could pay at 9.5%, even though your actual repayments are worked out at 6.5%.
Worked example: $95,000 salary
A single buyer on $95,000 with $2,500 a month of living costs, no other debts and a 6.5% loan over 30 years:
- Take-home pay: $6,173 a month after $19,020 income tax and the $1,900 Medicare levy for 2026-27
- Left after living costs: $3,673 a month
- At the 9.5% test rate that covers a loan of about $436,857
- Actual repayments at 6.5%: $2,761 a month
- With a 20% deposit that means a property of up to about $546,000
What reduces your borrowing power
Every dollar a month that goes somewhere else is a dollar that can't go to the loan, and at a 9.5% test rate over 30 years each $100 a month is worth about $11,900 of borrowing. Using the $95,000 example:
- HECS/HELP debt: the compulsory repayment comes out of your pay first. On $95,000 it's about $318 a month in 2026-27, which cuts borrowing power to about $398,991.
- Credit card limits: banks count the limit, not what you owe. Many assume you pay 3.8% of it every month, so $10,000 of limits counts as $380 a month and cuts borrowing power to about $391,665. Closing cards you don't use, or lowering the limits, is one of the quickest ways to borrow more.
- Car and personal loans: a $600 a month car loan cuts borrowing power to about $365,501.
- Buy now pay later: most lenders now treat these accounts like any other debt.
- Higher living costs and dependants: see below.
Living costs and the HEM benchmark
Banks ask what you spend each month, then compare it with the Household Expenditure Measure (HEM), a benchmark for households like yours. If your figure is lower than the benchmark, they use the benchmark. That means cutting your spending on paper doesn't help once you're below it.
HEM figures aren't published, so the calculator uses a rough stand-in: $1,800 a month for a single, $2,700 for a couple and $500 for each dependant. If what you enter is higher, your figure is used. Banks also look at your bank statements, so be realistic.
Borrowing as a couple
Each person's income is taxed separately, so two incomes go further than one income of the same total. A couple on $95,000 and $70,000 takes home about $10,930 a month, leaving $8,230 after living costs, and could borrow about $978,767.
That's close to 6 times their combined income. Loans of 6 times income or more are where many lenders start to restrict or decline, so the calculator shows your debt-to-income ratio and flags it at 6 or above.
What this calculator doesn't cover
Each bank has its own rules, so treat the result as a starting point rather than an approval. Banks may count only part of bonuses, overtime, commission, rental income or self-employed income, and they may use a higher test rate or different living-cost figures. Some lend more to first home buyers under government schemes, and a broker can compare several lenders' calculators at once.
Your deposit also matters. Borrowing more than 80% of the property's value usually means paying lenders mortgage insurance, unless you use the 5% Deposit Scheme. The mortgage calculator shows repayments, LMI and offset savings, and the stamp duty calculator shows the upfront cost in your state.
Frequently asked questions
About $437,000 on your own, with $2,500 a month of living costs, no other debts and a 6.5% loan over 30 years. A HECS debt, credit cards or a car loan will lower that.
APRA expects banks to check you could still afford repayments if your rate were at least 3 percentage points higher. On a 6.5% loan they test you at 9.5%.
Yes. Your compulsory HECS repayment comes out of your pay, so there's less left for a home loan. On $95,000 it's about $318 a month in 2026-27, which cuts borrowing power by roughly $38,000.
Yes. Banks count the limit, not the balance. Many assume 3.8% of the limit a month, so a $10,000 limit counts as a $380 a month repayment.
Close or lower credit card limits, pay off small loans and buy now pay later accounts, and keep your spending steady in the months before you apply. A second income or a longer loan term also helps.
Each bank has its own test rate, living-cost figures and rules for counting bonuses, overtime and rental income, so results can differ by tens of thousands of dollars.