Borrowing Power Calculator
Estimate maximum mortgage loan amount based on income, expenses, and APRA buffers.
Last reviewed by the myCalculator Editorial Team
Input Parameters
Calculation Results
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Formula & How Borrowing Power Calculator Works
Lenders do not assess you at the rate you will actually pay. They add a buffer, currently 3 percentage points above the loan rate under APRA guidance, and subtract your living costs and credit card limits from your income. A $600,000 loan at 6.25% over 30 years has actual repayments of about $3,694 a month, but a lender tests it at 9.25%, a repayment of about $4,936 a month, and checks you could afford that. Credit card limits count whether you use them or not, so closing unused cards can raise your capacity. This is an estimate: each lender uses its own method, so ask a broker for a firm figure.
- Enter Your Gross Annual Income ($): Input your target parameter value.
- Enter Partner Gross Annual Income ($): Input your target parameter value.
- Enter Monthly Living Expenses ($): Input your target parameter value.
- Enter Total Credit Card Limits ($): Input your target parameter value.
- Enter Number of Dependents: Input your target parameter value.
- Apply Formula: Calculate using
Borrowing Capacity = Net Surplus Income / Assessed Stress Buffer Rate (8.5%). - Review Results: View exact computed answers, metrics, and worked mathematical proofs.
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Frequently Asked Questions (FAQs)
Why does credit card limit affect borrowing power?
Banks assess credit cards on total limit (assumed 3% monthly repayment), not zero balance.
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Authoritative Standards & Verified Reference Citations
Calculations and mathematical logic on this page are grounded in published statutory rules, regulatory standards, and official government data published by the following bodies:
Consumer guidance on mortgage borrowing capacity, compound interest formulas, and loan fees.
Official cash rate target announcements, monetary policy statements, and national economic statistical data.
Official U.S. Federal Funds Rate and comprehensive macroeconomic time-series data.
Key Eurozone interest rates, deposit facility rates, and monetary policy operations.
Residential mortgage serviceability buffer framework (3.0% stress test hurdle rate).
Dedicated Australian home loans, borrowing capacity, mortgage repayments & refinance modeling.