Borrowing power calculator

Are you about to enter the property market? Perhaps you’re considering upsizing or want to buy an investment property?

Find out how much you might be able to borrow from a bank or lender with Your Mortgage’s Borrowing Power Calculator!

Our free tool can give an estimate of how large a home loan a lender may be willing to offer to you based on your income and expenditure.

Salary
$
Other Income
$
Partner's Salary
$
Partner's Other Income
$
Dependants
Household Living Expenses
$
Other Loan Repayments
(e.g. car loan, credit card, personal loan, etc...)
$
Interest Rate
%
Loan Term (max. 30 years)
years

You can borrow up to $ 0.00

Your monthly repayment would be $ 0.00

Total interest paid $ 0.00

Total cost $ 0.00

Summary
Your total salary & other income
$ 0.00
Dependants
0
Total monthly expense
$ 0.00
Interest rate
0.00 %
Loan terms
30 years
Amount to borrow
$ 0.00
Monthly repayment
$ 0.00
Total interest paid
$ 0.00
Total cost
$ 0.00

How to use our borrowing power calculator

Your Mortgage's borrowing power calculator considers the same factors that banks and lenders do when contemplating your borrowing capacity ahead of offering you a home loan.

There are three key pieces of information needed to use this calculator: your annual income, monthly expenses, and your ideal loan details.

  • Annual income
    Simply provide details of all your income streams, including your pre-tax salary, rental income, and any other regular income sources.

  • Monthly expenses
    After that, enter information regarding your overall day-to-day expenses, existing loan repayments, and any other financial commitments. If you're unsure of your exact expenditure, simple provide an estimate.

  • Loan details
    Lastly, fill in the details of your ideal home loan, including the interest rate and loan term.

Unsure about what kind of home loan you might be eligible for? You can compare some of the lowest-rate mortgage products below.

Lender

Variable
More details
Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
Online ExclusiveUp to $4k cashback

Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
Variable
More details

Discounted Basic Variable Home Loan ($250k+)

    Variable
    More details
    • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.

    Variable Rate Home Loan LVR < 80%

    • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
    Variable
    More details

    Basic Home Loan (Principal and Interest) (LVR < 60%)

      Variable
      More details

      Basic Home Loan (New Customer) (LVR < 60%)

        Variable
        More details

        Basic Variable Home Loan (Principal and Interest) (New Customer) (LVR < 70%)

          Important Information and Comparison Rate Warning

          Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 22, 2024.

          How much can I borrow?

          The amount of money a lender is willing to provide you via a home loan is known as your borrowing capacity or borrowing power.

          The main factors that determine your borrowing power are your income, expenses, and the size of your deposit.

          Lenders will likely also consider whether you have any existing debts, if you're using a guarantor for your home loan, and the interest rate on the mortgage product you're applying to.

          Here's how these factors can impact your borrowing capacity.

          Income and expenses

          The more income you can prove, the greater your borrowing capacity is likely to be. Ultimately, a lender just wants to see that a potential borrower can meet their expected repayments relatively painlessly.

          On the other end of the spectrum are your expenses. If your expenses are greater than your income, your borrowing capacity will probably be low (if existent at all) as a lender will likely assume you're unable to manage home loan repayments.

          Interest rate and loan term

          Another factor that will determine your borrowing power is the interest rate on the mortgage you're applying for.

          The interest rate and length of a loan largely determine how much your regular repayments will be. Your bank or lender will likely want to see that you can meet your repayments, and then some.

          Existing credit cards and loan repayments

          Finally, your credit card, use of buy now pay later (BNPL) products, and existing loans can also lower your borrowing capacity.

          A lender will likely look at any and all debt you have access to and remove its value from the figure it would otherwise lend you.

          And yes, it considers 'accessible' not 'drawn down' debt, so if your credit card has a limit of $20,000, your borrowing capacity could be $20,000 less, even if you never use card. It's the same with BNPL products, so it might be worth shutting down your Afterpay account before applying for a home loan.

          Can I increase my borrowing power?

          Borrowing at the tippy-top of your capacity can be a dangerous game - you don't want to overstretch yourself financially and struggle to meet your repayments!

          Though, if your dream home demands you borrow more than you can right now, there might be ways you can boost your borrower power. Here are a few:

          • Save a bigger deposit
            The bigger your deposit is, the bigger your borrowing power might be. That's because lenders typically like to see a consistent record of savings. Not to mention, a larger deposit may reduce the amount you need to borrow.

          • Pay off your debts
            Existing debts reduce your borrowing capacity. By paying off personal loan or car loan debt, or closing credit cards and BNPL accounts, you might be able to bolster the amount you can borrow to buy a home.

          • Enquire with different lenders
            If your preferred lender won't quite stretch to your budget, it might be a good idea to enquire with another to see if it will. However, it's worth bearing in mind that making multiple home loan applications in a short space of time could dent your credit score.

          • Reduce your spending
            Trimming your spending for a few months could provide a double benefit, helping you save for a larger deposit while also increasing your borrowing power.

          • Reduce your credit limits
            Cancelling unused credit cards and lowering the limit on those you keep could improve your borrowing power, as lenders will generally reduce your borrowing power by the full limit on any credit card you hold.

          • Increase your income
            Increasing your income is a great way to boost your borrowing capacity. It could be worth considering taking on extra shifts at work, getting a second job, or negotiating a pay rise.

          Understanding your borrowing power

          Here are some posts and articles that can help you to be more informed about how much you can borrow.

          Frequently Asked Questions

          ‘Borrowing power’ refers to how much a lender is willing to lend to you via a home loan. Factors that can impact your borrowing power include your income, expenses, debts, and the size of your deposit.

          The number of dependents you support will likely factor into your borrowing power.

          Children and other dependents typically require additional spending, which impacts how much you can afford in home loan repayments.

          Unfortunately, it’s rare for a lender to make its borrowing power calculation methods public knowledge.

          Generally speaking, most lenders use similar methods to calculate borrowing capacity, such as the controversial Household Expenditure Measure (HEM). However, each will have its own way of calculating your expenses and borrowing capacity based on its appetite for risk.

          Your credit history isn’t generally included in borrowing power calculations, but your financial history is something a lender will look at when assessing your home loan application.

          For that reason, it’s important to check your credit score before applying for a loan.

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