Borrowing Capacity Calculator Australia
Borrowing Capacity Estimate
How this is calculated
This calculator applies a 3% serviceability buffer above the entered rate, as required by APRA (Australian Prudential Regulation Authority). All Australian banks are required to use this buffer when assessing loan applications.
This estimate is indicative only. Your actual borrowing capacity depends on your credit score, lender policies, deposit size, and other factors. Speak with a mortgage broker for a precise figure. Source: APRA (apra.gov.au).
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Frequently Asked Questions
How much can I borrow for a home loan in Australia?
As a general rule, most lenders will lend up to 4–6 times your gross annual income, subject to your expenses and existing debts. The exact amount depends on your lender's credit policy, the property type, and current interest rates.
What is the 3% serviceability buffer?
APRA requires all Australian banks and lenders to test whether you could still repay your loan if interest rates were 3% higher than the current rate. This is the serviceability buffer and is required under APRA's Prudential Practice Guide APG 223. Source: APRA (apra.gov.au).
How do I increase my borrowing capacity?
You can increase your borrowing capacity by reducing monthly expenses, paying off existing debts, increasing your income, saving a larger deposit, or extending your loan term.
Does my credit score affect borrowing capacity?
Yes. A poor credit score can reduce the amount lenders are willing to lend, or result in a higher interest rate. Check your credit score for free via Equifax, Experian, or Illion before applying.
Can I borrow more with a guarantor?
Yes. A guarantor (usually a parent) can allow you to borrow more or avoid LMI by using equity in their property as additional security. This is sometimes called a family pledge or family guarantee loan.