Borrowing Power Calculator Explained for Australians
Estimates how much a lender may let you borrow based on income and expenses. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Borrowing Power Calculator.
Why it matters
Buying property in Australia involves a deposit, stamp duty, lender requirements such as the APRA serviceability buffer, and ongoing repayments that move with interest rates. Investors also weigh rental yield, negative gearing and capital gains tax.
What you need to enter
The calculator asks for 6 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Gross annual income ($) | 110000 |
| Monthly living expenses ($) | 3500 |
| Other monthly debt repayments ($) | 0 |
| Interest rate (%) | 6.2 |
| Serviceability buffer (%) | 3 |
| Loan term (years) | 30 |
The formula
Surplus = after-tax monthly income − expenses − debts. Borrowing power = the loan that surplus repays at your rate plus the 3% APRA buffer.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Estimated borrowing power | $427,444.01 |
| Monthly surplus | $3,501.00 |
| Repayment at actual rate | $2,617.96 |
The headline figure is $427,444.01 (estimated borrowing power). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the estimated borrowing power changes with gross annual income
The table below keeps every other input at the example value and moves only “Gross annual income ($)” up and down by 10% and 20%. It shows how sensitive the estimated borrowing power is to that one figure.
| Gross annual income ($) | Estimated borrowing power |
|---|---|
| 88,000 | $275,236.01 |
| 99,000 | $351,340.01 |
| 110,000 | $427,444.01 |
| 121,000 | $503,548.01 |
| 132,000 | $579,652.01 |
At 88,000 the result is $275,236.01; at 132,000 it is $579,652.01. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Lenders count credit card limits, not balances. Closing unused cards can raise your borrowing power.
Keep going
Before relying on the number, read Borrowing Power Mistakes Australians Make and How to Avoid Them. You might also find these guides useful:
- How the Stamp Duty Calculator (NSW) Works (With a Worked Example)
- Home Deposit Savings Calculator: Formula, Example and What the Result Means
- Using a LVR Calculator in Australia: A Step-by-Step Guide
Frequently asked questions
- Do these calculators match what my bank will say?
- Lenders use their own models, expense benchmarks and policies. Use these results to prepare, then speak to a lender or broker.
- Are stamp duty rates current?
- Duty thresholds are indexed or changed regularly. Always confirm with your state revenue office before relying on a figure.
- Is this financial advice?
- No. The calculators give general estimates only and don’t consider your objectives or financial situation.
Run your own numbers in the Borrowing Power Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.