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Borrowing Power Calculator

How much can you actually borrow? Uses ATO 2024-25 income tax, the 2% Medicare levy, HECS/HELP thresholds, the HEM living-expense benchmark, and the APRA 3% serviceability buffer — the same framework every Australian bank applies. Updates as you type.

Income & Household
Before tax, including base salary, regular allowances. Use the figure on your last payslip × pay periods.
If applying jointly. Leave at 0 for single applicants.
Commitments
Lenders assess at 3% of the limit, even if cards are unused.
Car loans, personal loans, BNPL averages.
Lender uses the higher of this and the HEM benchmark. Leave at 0 to use HEM.
Loan Assumption
Lenders add the APRA 3% buffer on top automatically.
Lets us project the maximum purchase price.
How this calculator works

Applies ATO 2024-25 resident tax brackets + 2% Medicare levy + HECS/HELP 2024-25 schedule, then deducts the higher of your declared expenses or the HEM benchmark for your income/household. Existing debts are assessed at 3% of credit-card limits plus declared monthly repayments. The remaining surplus is divided by the monthly repayment per $1 of loan at your rate + 3% APRA buffer over the loan term. The output is the maximum loan a typical APRA-regulated lender would extend. Indicative — confirm with your lender or broker.

Enter your income and household details to see your maximum borrowing capacity

Frequently asked questions

How is borrowing capacity calculated in Australia?

Lenders start with your gross income, deduct income tax (ATO brackets), the 2% Medicare levy, HECS/HELP repayments, your living expenses (or the HEM benchmark — whichever is higher), and existing debt commitments (3% of credit-card limits, plus other loan repayments). What's left is your assessable monthly surplus. They then solve for the maximum loan that surplus can service at your interest rate plus the APRA 3% serviceability buffer.

What is the APRA 3% serviceability buffer?

Since October 2021 APRA has required all Authorised Deposit-taking Institutions (banks, credit unions, building societies) to assess new home loans at the borrower's actual rate plus a 3 percentage-point buffer. If your offered rate is 6.5%, the lender assesses repayments at 9.5%. The buffer exists so borrowers can still afford repayments if rates rise. It directly reduces how much you can borrow — typically by 15–25% versus the unbuffered maximum.

What is the HEM benchmark?

The Household Expenditure Measure (HEM) is a minimum living-expenses benchmark derived from ABS spending data. Lenders use HEM as a floor — if you declare lower expenses, they substitute HEM. HEM varies by income, household size, and whether you're a homeowner. Indicative figures: single low-income adult ≈ $2,000/month; couple no kids on combined $150k ≈ $3,800/month; couple with two kids on $200k ≈ $5,200/month.

Does HECS reduce my borrowing power?

Yes — HECS/HELP is treated as a recurring liability. The 2024-25 schedule starts repayments at $54,435 of repayment income and scales from 1% up to 10% above $159,663. Even a small HECS balance reduces borrowing power because lenders count the percentage repayment until the debt is cleared. Paying off the last $5,000 of HECS can lift borrowing capacity by tens of thousands.

Why is my borrowing power lower than my mortgage broker's number?

Brokers use the same APRA framework but each lender has its own tweaks: rental-income shading (often 75–80% counted), bonus and overtime weighting, credit-card minimum-payment assumptions (3% vs 3.5% vs statement minimum), and HEM table version. This calculator uses conservative defaults — your borrowing power could be 5–15% higher with a sharp broker shopping for the right lender. Always confirm with a broker or your bank before relying on the number.

Is this an offer of credit?

No. SA Property Central is not a lender, broker, or credit provider. This calculator is an information tool only. Actual rates, fees, lender policies and approval depend on each lender's assessment. Always confirm figures with your bank or licensed broker before committing.

Frequently asked questions

How accurate is the borrowing power estimate?

Indicative only. We apply the HEM (Household Expenditure Measure) benchmark for your household composition, current SA bank serviceability buffers, and APRA's 3% interest-rate stress floor. Real bank assessments include credit card limits, HECS, existing debts, and lender-specific overlays — expect plus or minus 15% variance from a real pre-approval.

What is HEM?

The Household Expenditure Measure is a quarterly Melbourne Institute benchmark estimating minimum essential household spending by household composition. APRA requires Australian banks to use HEM as the floor for assessed living expenses in serviceability calculations.

Why is my borrowing power lower than I expected?

The 3% interest-rate buffer (APG 223) is usually the biggest reducer — banks must assess your repayment at contract rate plus 3%. Existing credit card limits (assessed at 3.8% monthly minimum repayment) also reduce capacity even if your balance is zero.

Is this credit advice?

No. The output is for your own planning before talking to a broker or bank. Australian credit law requires licensed credit assistance for actual recommendations.