Enter your income, regular expenses, and existing debts to estimate how much an Australian lender may be willing to lend you, with the APRA serviceability buffer and HEM household benchmarks applied. The calculator also lets you compare how federal guarantee and co-purchase schemes could change the deposit size required.

What does borrowing power actually mean?

Borrowing power is the maximum loan amount a lender is likely to approve based on your income, living expenses, existing debts, and the interest rate used for assessment. It is not a guarantee of approval - it is an estimate of the ceiling. The actual amount any lender offers will depend on their own policies, your credit history, and your full financial picture.

Why does the calculator use a higher interest rate than the advertised rate?

Australian lenders are required by APRA to test whether you could still afford repayments if rates rose by at least 3% above the loan rate. This is called the assessment buffer. So if the current rate is 6.95%, the calculator tests your repayments at 9.95%. This buffer is a core reason why your borrowing estimate can be lower than you might expect from the headline repayment figure alone.

What is the HEM and why does it matter?

The Household Expenditure Measure (HEM) is a benchmark figure lenders use as a floor for your monthly living costs. Even if you declare lower expenses, most lenders will not accept a living cost figure below HEM. The calculator uses HEM minimums of around $1,600 per month for a single person, $2,300 for a couple, and an extra $500 for each dependent child. If your actual declared expenses are higher, the higher figure is used - whichever is greater reduces your available surplus.

How do credit cards and existing debts reduce what I can borrow?

Every dollar of monthly debt repayment (car loans, personal loans, HECS/HELP) comes directly off the surplus income available for a home loan. Credit cards are treated differently - lenders typically apply a monthly serviceability charge of around 3-4% of your total credit card limit, regardless of your actual balance or whether you pay in full each month. A $10,000 credit card limit could reduce your borrowing power by roughly $300-$400 per month in the lender's assessment, which can translate to tens of thousands of dollars off your maximum loan.

How does a 5% deposit scheme change my borrowing power compared to saving a 20% deposit?

With a standard 20% deposit you need a larger cash sum but avoid Lenders Mortgage Insurance (LMI). The First Home Guarantee lets eligible first home buyers purchase with as little as a 5% deposit without paying LMI, because the government guarantees the remaining 15% to the lender. This means a smaller saved deposit can get you into a property sooner, but the loan itself is larger, which affects ongoing repayments. The calculator shows both scenarios side by side so you can compare the property price each approach could reach given the same income.

What is the Help to Buy scheme and who may be eligible?

Help to Buy is a federal shared equity scheme where the government co-owns a portion of your home - up to 40% for a new build or 30% for an existing property - in exchange for only needing a 2% deposit. Because the government's equity stake reduces the size of your loan, your borrowing power effectively stretches further for the same income. Income caps apply: $100,000 gross per year for a single applicant and $160,000 for a couple, as at current legislation. Property price caps also vary by state and region. The relevant government authority makes final eligibility determinations.

Why might my actual loan approval differ from this estimate?

This calculator uses standard serviceability assumptions based on published lender guidelines and APRA requirements, but every lender applies its own credit policy on top of these. Factors like your credit score, employment type (casual, self-employed, or PAYG), the property type, existing savings history, and the lender's current appetite for new business can all shift the final number. Use this estimate as a planning guide and a conversation starter, and speak with a mortgage broker or lender for an assessment tailored to your full circumstances.