Borrowing Power Calculator

Understanding your borrowing capacity is the first step in your property journey. Our borrowing power calculator helps you estimate how much you can borrow based on your financial situation.

How It Works

This calculator considers:

• Your gross income (before tax)
• Living expenses and commitments
• Existing loan repayments
• Credit card limits
• Number of dependents
• Interest rates and loan terms

Factors That Affect Borrowing Power

Income

• Employment Income: Salary, wages, overtime, bonuses
• Self-Employment: Business income after expenses
• Investment Income: Rental income, dividends
• Other Income: Centrelink, child support

Expenses

• Living Expenses: Food, utilities, transport
• Existing Debts: Personal loans, car loans
• Credit Cards: Limits affect borrowing capacity
• Dependents: Children and other dependents

Interest Rates

• Assessment Rate: Lenders test at higher rates
• Buffer Rate: Usually 2-3% above actual rate
• Fixed vs Variable: Different assessment criteria

Tips to Increase Borrowing Power

1. Increase Income

• Document all income sources
• Include rental income projections
• Consider a co-borrower
• Wait for salary increases

2. Reduce Expenses

• Pay down credit card debt
• Close unused credit cards
• Reduce discretionary spending
• Consolidate existing debts

3. Improve Credit Score

• Pay bills on time
• Check credit report for errors
• Avoid multiple credit applications
• Build positive credit history

4. Save a Larger Deposit

• Reduces loan amount needed
• Access better interest rates
• Avoid Lenders Mortgage Insurance
• Shows financial discipline

Important Considerations

Responsible Borrowing

• Don't borrow the maximum amount
• Allow buffer for rate increases
• Consider future expenses
• Plan for emergencies

Lender Variations

• Different lenders have different criteria
• Some specialize in certain borrower types
• Policy changes affect capacity
• Professional advice recommended

Next Steps

Once you know your borrowing power:

1. Get Pre-Approval: Lock in your borrowing capacity
2. Set Budget: Search within your means
3. Consider Costs: Include stamp duty, legal fees
4. Seek Advice: Our brokers can maximize your capacity

Calculator Disclaimer

This calculator provides estimates only. Actual borrowing capacity depends on:

• Lender policies and criteria
• Full financial assessment
• Property valuation
• Market conditions

For an accurate assessment, speak with our lending specialists.

Get Professional Assessment

This calculator is for illustrative purposes only. Actual borrowing capacity will be determined by the lender based on their lending criteria.