Income type
Is all income treated equally?
No. Base salary is counted in full. Overtime, bonuses, commission, casual and self-employed income are commonly discounted, and the discount varies by lender and industry.
CALCULATOR
How much could you borrow?
The number that decides what you can look at — and it varies more between lenders than most people realise.
RUN THE NUMBERS
Estimate what you could borrow
Enter your income, what you spend and what you already owe. The estimate shows the surplus it is built from, the rate it is tested at, and how much the answer moves when a single assumption changes.
Children or others you support. Lenders raise their expense benchmark for each one.
Per year, before tax. Lenders count only part of it.
Commonly 70 to 80 per cent for rent. Vacancy, management and maintenance are the reason.
What goes out
Per month, everything except rent or mortgage. Lenders compare this to a benchmark and use the higher figure.
Per month — car, personal and any existing property loans.
The limit, not the balance. An unused card still reduces capacity.
A common assessment approach is around 3.8 per cent of the limit each month. It varies by lender.
Compulsory repayments come out before the surplus is worked out.
The loan being assessed
Added to the rate before testing whether you can afford it. Three percentage points is the prudential expectation.
Used to work out a purchase price. Duty and registration fees come out of it too.
Above 80 per cent lenders mortgage insurance normally applies, and it is not included here.
Applies the NSW first home buyer duty concession when working out the purchase price.
Estimated borrowing capacity
$1,043,029
A general estimate on the assumptions you set — not a pre-approval, and not any particular lender's number.
- Monthly surplus
- $8,430
- Assessed at
- 9.05%
- Repayment at the real rate
- $6,287per month
- Indicative purchase price
- $634,480
- Household income after tax
- $151,560
- Living expenses a year
- $50,400
- Commitments a year
- $0
- Loan towards that purchase
- $507,584
- Duty and registration fees
- $23,104
The purchase price above is limited by your deposit, not by what you could borrow. Lifting the deposit, or borrowing above 80% of the property value with lenders mortgage insurance, is what moves it.
What moves the number
- As entered$1,043,029
- With the cards closed$1,043,029
- If expenses are $400 higher$993,538
- At a one point higher buffer$956,576
What this calculation assumes
- Income tax is worked out on each applicant separately using the current ATO scale. Salary sacrifice, fringe benefits and reportable super contributions are not modelled.
- Living expenses are taken as you enter them. A lender will compare your declared figure to its own benchmark for a household of your size and income, and assess on whichever is higher.
- Credit card limits are treated as a monthly commitment at the percentage you set. Lenders differ on this, and some treat interest-free and buy-now-pay-later facilities differently again.
- The assessment rate is your rate plus the buffer you set. Lenders also apply floor rates, and some assess existing debts at a different rate again.
- Lenders mortgage insurance is not included. Above 80 per cent of the property value it usually applies, and the premium can be substantial.
- The purchase price shown assumes your deposit covers the gap plus NSW duty and registration fees, with nothing held back for the other costs of buying.
Rates and thresholds: 2026-27 financial year, from Revenue NSW. Checked 27 August 2026. Verify against the source before you rely on them.
WHAT IT TELLS YOU
Borrowing power is what a lender believes you can afford to repay
It is calculated from your income, minus your living expenses, minus commitments on existing debts, with the remaining surplus tested against repayments at a buffered interest rate well above the actual one.
The single most important thing to understand is that this figure is not fixed. Two lenders assessing identical circumstances can arrive at meaningfully different numbers, because they treat income types, expenses and existing debts differently.
That variation is not a rounding error. For some households it is the difference between a purchase being possible and not.
WHAT MOVES THE NUMBER
What lenders weigh
Living expenses
Do lenders use your real spending?
They use the higher of your declared expenses and a benchmark figure for your household size and income. Being frugal does not necessarily increase your capacity.
Existing commitments
What counts against you?
Other loans, HECS repayments, and credit card limits — the limit, not the balance. An unused card with a high limit can reduce capacity substantially.
READING THE RESULT
An estimate is a starting point, not an answer
What the calculation covers
- A general estimate of capacity — based on the income and expenses you enter.
- The effect of clearing debts — so you can see what reducing commitments would free up.
- Sensitivity to income changes — useful when a pay rise or a change of role is coming.
What a lender does differently
- Each lender has its own policy — so one estimate cannot represent the market.
- Assessment rates include a buffer — capacity is tested well above the actual rate.
- Credit card limits count in full — even where the balance is zero.
- Investment income is shaded — rental income is generally discounted for vacancy and costs.
COMMON QUESTIONS
Questions about this calculation
Why do different calculators give me different numbers?
Because each one embeds a particular lender's assumptions about income treatment, expense benchmarks and assessment rates.
The spread between lenders is real and can be significant. That is precisely why comparing across a panel matters more than optimising one calculator.
Does a credit card reduce how much I can borrow?
Yes, and usually by more than people expect, because lenders assess the card's limit rather than its balance. A card with a substantial limit and nothing owing still reduces your capacity.
Reducing or closing unused cards before applying is one of the simplest ways to increase capacity.
How is HECS or HELP debt treated?
The compulsory repayment is treated as an ongoing commitment and reduces assessed surplus income, which reduces borrowing capacity.
Lenders differ in how they handle balances that are close to being paid out, which occasionally makes a practical difference.
Will a bigger deposit increase my borrowing power?
A larger deposit does not increase your assessed capacity — that is driven by income and commitments. It does increase your total purchase budget and can improve your pricing by lowering your LVR.
Capacity and budget are related but separate questions.
How can I improve my borrowing capacity?
Reduce or close unused credit card limits, pay out small personal or car loans, avoid new debt in the months before applying, and keep your spending records clean and explicable.
Where income is variable, a longer consistent history helps. Choosing a lender whose policy suits your income type often matters most of all.
OTHER CALCULATORS
Other numbers worth running
GET IN TOUCH
Want the estimate checked against real lender policy?
Would rather talk it through?
(02) 9659 1694Important information
This page explains a calculation. Any figures you produce from it are estimates based on the assumptions described, not a quote, an offer of credit, or an indication that finance will be approved.
The information on this page is general in nature. It has been prepared without taking your objectives, financial situation or needs into account, so it is not personal advice and you should consider whether it is appropriate for you before acting on it.
Any rates, figures or examples shown are indicative only. Lending is subject to approval, and lender eligibility criteria, terms, conditions, fees and charges apply. Talk to us about what your own circumstances allow.