Borrowing Power Calculator
Get an estimate of how much you could potentially borrow based on your income, expenses, and financial commitments. This helps you understand your budget before shopping for a car, home, or personal loan.
Knowledge is power when it comes to your finances.
Your Financial Details
Loan Type
Sets common defaults. Adjust the term and rates below if needed.
Used to estimate how much could be serviced over the selected term
Your likely rate. Lenders may assess at a higher rate.
Commonly 2–3% above the expected rate
Assessment rate used: 9.50% p.a.
Your total yearly income before tax
Children or others you financially support
Rent, food, utilities, transport, etc.
Uses the higher of your entered expenses and $2,000 based on dependents.
Monthly repayments on other loans/finance
Assessed at ~3% of limit per month ($0/mth)
Your Estimated Borrowing Power
Estimated Maximum
$206,000
Moderate Borrowing Capacity
No impact to your credit score
This is an estimate only and not a quote. It uses simplified assumptions, including an estimated net income, assessed credit card commitments (limits), a minimum living expense benchmark (if enabled), and an assessment rate (expected rate + buffer) over the selected term. Lenders vary significantly in how they assess income and expenses. Apply for a personalised assessment. This information is general in nature and not financial advice; consider your circumstances and seek independent advice where appropriate.
Understanding Your Borrowing Power
Income Matters
Higher income generally means higher borrowing power, but lenders look at your net income after tax.
Expenses Count
Lower living expenses leave more room for loan repayments, increasing what you can borrow.
Existing Debts
Current loans and credit card limits reduce your borrowing capacity significantly.
Family Size
Each dependent adds to your estimated living expenses, reducing borrowing power.
Tips to Increase Your Borrowing Power
Close unused credit cards
Even cards with zero balance reduce your borrowing power. Close any cards you do not use.
Pay down existing debts
Reducing or eliminating current loan balances frees up more of your income for a new loan.
Reduce discretionary spending
Lower expenses for a few months before applying can improve your assessed surplus income.
Consider a co-borrower
Adding a partner or family member with income can significantly boost borrowing capacity.
Increase your deposit
A larger deposit means borrowing less, making approval easier and improving your rates.
Check your credit report
Fix any errors on your credit file and address any outstanding defaults before applying.
Frequently Asked Questions
How is borrowing power calculated?
Borrowing power is calculated based on your income, regular expenses, existing loan repayments, and the number of dependents you have. Lenders use a formula that considers your net surplus income after expenses and applies a serviceability buffer to determine how much you can afford to repay.
Why is my borrowing power lower than expected?
Your borrowing power may be lower than expected due to existing debts (including credit card limits, not just balances), high living expenses, irregular income, or the number of dependents you have. Lenders also apply a buffer rate (usually 2-3% above the loan rate) to ensure you can still afford repayments if interest rates rise.
How can I increase my borrowing power?
You can increase your borrowing power by reducing expenses, paying off existing debts, closing unused credit cards, increasing your income, or adding a co-borrower. Saving a larger deposit can also help, as it reduces the loan amount needed.
Does this calculator give an accurate result?
This calculator provides an estimate based on general lending criteria. Actual borrowing power varies significantly between lenders and depends on factors like your credit history, employment type, and the type of loan you are applying for. For an accurate assessment, apply for a personalised quote.
Do credit cards affect borrowing power?
Yes. Lenders typically assess your credit card limit, not your current balance. For example, a $10,000 credit card limit may reduce your borrowing power by $30,000-$50,000, even if the card has no balance. Closing unused cards can significantly improve your borrowing capacity.
How do dependents affect my borrowing power?
Each dependent (child or other person you financially support) reduces your borrowing power because lenders factor in the additional cost of living expenses. The reduction varies by lender but is typically $200-$400 per dependent per month.
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