Borrowing Capacity Calculator Australia 2026: How Much Can I Borrow?

A single person earning $100,000 can typically borrow about $480,000 for a home in Australia, while a couple earning $80,000 each with no children can borrow roughly $860,000. Your own figure depends on your income, expenses, debts, credit card limits and the interest rate, because lenders test whether you could still repay if rates rose 3 percentage points. Use the free calculator below for an estimate, then read how lenders really assess you.

Borrowing capacity calculator

Enter your details below. Leave living expenses blank to use our benchmark figure. Results use the 2026-27 resident tax rates plus a 2% Medicare levy, and a stress test at your rate plus 3 points.

How lenders work out how much you can borrow

1. Add up your income. Regular salary counts at 100%. Bonuses, overtime, casual and contract income are usually discounted or need 6 to 12 months of history, and rental income is typically counted at about 80% to allow for vacancies and costs.
2. Subtract tax. Lenders work from your income after tax and the Medicare levy.
3. Subtract living expenses. Lenders compare the expenses you declare with the Household Expenditure Measure (HEM), a benchmark based on household type, and use whichever is higher.
4. Subtract existing commitments. Car loans, personal loans, HECS-HELP repayments and credit cards all reduce what is left. Card limits are counted even if the balance is zero.
5. Test at a higher rate. APRA requires lenders to assess you at your loan rate plus 3 percentage points. A 6.5% loan is tested at 9.5%.
6. Convert the surplus into a loan size. The remaining monthly surplus is turned into the largest loan it could repay at the tested rate over the loan term.

Example borrowing capacity

These estimates use the same simplified method as the calculator: 2026-27 tax rates, a 2% Medicare levy, a 6.5% loan rate tested at 9.5%, a 30 year term, no other debts unless stated, and our own living expense benchmark of $2,400 a month for a single adult or $3,400 for a couple plus $700 for each child. Real lenders will give different answers.

Every $1,000 of credit card limit cuts your capacity by roughly $4,500 on this method, so closing or lowering cards you do not need is one of the quickest ways to borrow more.

The 6x debt-to-income limit

From February 2026, APRA limits banks and other authorised deposit-taking institutions to directing no more than 20% of their new mortgage lending to borrowers whose total debt is six times their gross income or more. The cap applies separately to owner-occupier and investor lending and does not apply to new dwellings or owner-occupier bridging loans. Banks still decide whether to lend within it, and non-bank lenders are not currently covered. In practice, a loan at six times income or more is harder to get, even if your serviceability looks fine. Our calculator shows your debt-to-income ratio so you can see where you sit.

How lenders differ

Each lender uses its own HEM adjustments, rate floors and income shading, so the same borrower can get quite different answers. Mozo’s example shows $550,000 from one bank and $510,000 from another for the same borrower. A mortgage broker can compare several lenders at once, and checking your borrowing power with more than one lender gives a better range than any single calculator. Remember that borrowing capacity is a ceiling, not a target. Use our mortgage repayment calculator to see what a loan would cost you at today’s rates.

How to increase your borrowing capacity

• Reduce credit card limits. Lenders count the limit, not the balance, so cancel unused cards.
• Pay off or consolidate small debts. Car loans, personal loans and buy now pay later accounts all reduce your surplus. See our car loan calculator.
• Lower your living expenses. Show a clean three to six month spending record, but remember lenders use the higher of your figure or HEM.
• Apply with a partner. Two incomes usually increase capacity, although dependants and joint debts reduce it.
• Choose a longer term. A 30 year term allows a bigger loan than 25 years, at the cost of more interest.
• Clear HECS-HELP if you can. The compulsory repayment reduces your income. Check our HECS-HELP repayment calculator.
• Wait for stable income. Permanent employment, finished probation and a solid history help, and self-employed borrowers usually need two years of tax returns.
• Pay down or save for a larger deposit. A deposit does not raise your borrowing capacity, but it lowers the loan you need and can avoid lenders mortgage insurance.

Deposit, stamp duty and LMI

Borrowing capacity is not the same as what you can afford to buy. Add your deposit to the loan to see the price range, then subtract stamp duty and fees. Use our stamp duty calculator for the state costs. If your deposit is less than 20% of the price, lenders usually charge lenders mortgage insurance, although some government schemes for eligible first home buyers allow a 5% deposit. Check Housing Australia for current rules.

If you are on a temporary visa

Lender policies for temporary visa holders differ a lot. Some lenders require a minimum time left on your visa, a larger deposit, or only count part of your income. Foreign persons, which includes most temporary visa holders, also face a ban on buying established dwellings from 1 April 2025 to 31 March 2027, with limited exceptions, and generally need Foreign Investment Review Board approval for other residential purchases. Get advice from a licensed broker or lawyer before you apply. See our PR pathways guide if you plan to stay.

Common mistakes

• Borrowing the maximum instead of an amount you can repay comfortably if rates rise.
• Opening new credit cards or buy now pay later accounts just before applying.
• Understating living expenses, which lenders replace with HEM anyway.
• Forgetting stamp duty, legal fees and moving costs when working out the budget.
• Relying on one calculator or one lender’s answer.

Sources and further reading

• APRA, debt-to-income limits as a macroprudential tool (official)
• ATO, tax rates for Australian residents (official)
• Mozo, home loan serviceability guide
• Unloan, how borrowing capacity is calculated
• MoneySmart (ASIC), how much can I borrow
• Allens, recent developments in FIRB regulation

Last checked 21 October 2026. Lender rules, rates and regulations change, and the RBA meets again on 3 November 2026. The calculator is a simplified estimate, uses our own living expense benchmark instead of a lender’s HEM figure, and is not credit or financial advice. Ask a lender or licensed mortgage broker for a formal assessment.

Related guides

More on home buying and money: mortgage repayment calculator, stamp duty calculator, interest rate predictions and salary calculator.

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