Estimate how much you can borrow for a home in Australia the way lenders test it: your after-tax income, minus living expenses and other debts, with repayments checked at your interest rate plus APRA’s 3 percentage point buffer. A single buyer earning $100,000 with $2,500 a month of living expenses and no other debts could borrow about $470,962 over 30 years at 6.49%, with repayments of $2,973.70 a month.
Borrowing Power Calculator
How much a lender may let you borrow · 2026–27 tax rates · Updated 13 October 2026
- Take-home income per month
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- Expenses and debts per month
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- Left over for loan repayments
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- Assessment rate (your rate + buffer)
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- Repayment at your actual rate
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- Loan as a multiple of income
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Principal and interest. After-tax income uses 2026–27 resident tax rates, the low income tax offset, the 2% Medicare levy and compulsory HELP repayments. Each lender uses its own model and expense benchmark, so treat this as an estimate, not a loan offer.
How lenders work out your borrowing power
Australian banks don’t simply multiply your salary. They run a serviceability test, which asks whether you could still afford the repayments if interest rates rose. This calculator follows the same steps:
- Take-home income. Gross income is reduced by 2026–27 income tax, the low income tax offset and the 2% Medicare levy. If you have a HELP debt, the compulsory repayment comes off too (15c for each $1 of income over $69,528 in 2026–27).
- Commitments. Your monthly living expenses, repayments on car and personal loans, and about 3% of your total credit card limits, even if the cards are paid off every month.
- Surplus. Whatever is left each month is the most the lender lets you put towards the new loan.
- Assessment rate. APRA expects banks to test repayments at the loan rate plus a 3 percentage point buffer, so a 6.49% loan is assessed at 9.49%.
- Loan size. The surplus is treated as a principal-and-interest repayment at the assessment rate over the loan term, and converted back into a loan amount.
| Setting | Value used | Where it comes from |
|---|---|---|
| Serviceability buffer | 3 percentage points | APRA, confirmed 28 May 2026 |
| Default interest rate | 6.49% p.a. | Average owner-occupier variable rate after the September 2026 cash rate rise |
| Tax rates | Nil to $18,200, then 15%, 30%, 37% and 45% | ATO resident rates 2026–27 |
| Credit cards | 3% of the limit per month | Common lender practice |
| High debt-to-income loans | 6 times income or more | APRA limit of 20% of new lending since February 2026 |
Borrowing power by income
| Gross income | Take-home per month | Borrowing power | Repayment at 6.49% |
|---|---|---|---|
| $60,000 | $4,198.33 | $202,153 | $1,276.41 |
| $80,000 | $5,323.33 | $336,061 | $2,121.93 |
| $100,000 | $6,456.67 | $470,962 | $2,973.70 |
| $120,000 | $7,590.00 | $605,862 | $3,825.48 |
| $150,000 | $9,202.50 | $797,798 | $5,037.38 |
| Couple: $100,000 + $80,000 | $11,780.00 | $926,053 | $5,847.20 |
Borrowing power doesn’t rise in a straight line with income. Each extra dollar of salary is taxed at your marginal rate, while your living expenses stay the same, so the surplus grows faster than income at first and then more slowly in the higher tax brackets.
What reduces how much you can borrow
| Change (single, $100,000 income) | Borrowing power | Difference |
|---|---|---|
| No debts (starting point) | $470,962 | – |
| $10,000 of credit card limits | $435,253 | −$35,709 |
| HELP debt | $425,623 | −$45,339 |
| $600 a month car loan | $399,544 | −$71,418 |
| Interest rate 7.49% instead of 6.49% | $432,900 | −$38,062 |
As the table shows, closing unused credit cards or paying out a small car loan can lift your borrowing power by tens of thousands of dollars. If APRA’s buffer were removed, the same $100,000 earner would show about $626,639, which is why the buffer matters so much.
Living expenses and the HEM benchmark
Most lenders compare the expenses you declare with the Household Expenditure Measure (HEM), a benchmark of typical spending for your household size, income and location, and use whichever is higher. The HEM figures are licensed to lenders and are not published, so this calculator uses the living-expense figure you enter. If you enter a very low amount, a real lender will probably swap in a higher benchmark and offer less.
Important limits of this estimate
- Lenders often count only part of bonuses, overtime, commissions and rental income, and some add a minimum ‘floor’ assessment rate.
- Interest-only loans, investment loans and self-employed income are assessed differently.
- Borrowing power is not the same as what you should borrow. Leave room for rate rises, maintenance and savings.
- You also need a deposit and money for stamp duty, legal fees and lenders mortgage insurance if your deposit is under 20%.
FAQs
How much can I borrow on $100,000 a year?
With $2,500 a month of living expenses and no other debts, about $470,962 at a 6.49% rate over 30 years. With a HELP debt it falls to about $425,623.
Is the 3% buffer still in place in 2026?
Yes. APRA reviewed its settings on 28 May 2026 and kept the serviceability buffer at 3 percentage points, alongside the limit on new loans of six or more times the borrower’s income.
Does a partner’s income double my borrowing power?
Not quite. A second income adds to the surplus, but couples usually have higher living expenses. In the table above, two incomes totalling $180,000 support about $926,053 compared with $470,962 for one $100,000 income.
Does the loan term matter?
Yes. A 30-year term gives the largest loan because each repayment is smaller. A shorter term lowers your borrowing power but saves a lot of interest.
Related calculators
- Mortgage Repayment CalculatorRepayments on the loan you choose
- Pay Calculator 2026–27Your take-home pay
- HECS-HELP Repayment CalculatorHow your study loan affects your pay
Sources
- APRA: APRA maintains current macroprudential policy settings · 28 May 2026
- APRA: Activating debt-to-income limits as a macroprudential policy tool
- ATO: Tax rates for Australian residents 2026–27
- ATO: Study and training support loans repayment thresholds 2026–27
- ATO: Medicare levy reduction for low-income earners
- Mozo: Home loan serviceability (credit card limits and HEM)
- Reserve Bank of Australia: Cash rate target · 4.60% from 30 September 2026
- InDaily (AAP): Interest rates hit high as RBA reveals latest call (Canstar average rate)
Figures current as of 13 October 2026
Each formula is checked against a separate test sheet with at least three worked examples. Results are estimates based on the numbers you enter and the published rules; your actual figures may differ. This is general information, not financial or tax advice.
Spotted a mistake? Contact us and we will fix it and update the date above.