How much can you borrow?
A quick, realistic estimate of your home-loan borrowing power and the purchase price it could reach.
You could borrow up to
$386,102
With your $100,000 deposit, that's a home up to $486,102.
Take-home / month
$5,607
Max purchase price
$486,102
Estimated from your surplus (take-home minus expenses), assessed at your rate plus the 3% APRA serviceability buffer over 30 years. Lenders also weigh credit, other debts, deposit size (LMI under 20%) and HEM benchmarks — so treat this as a ballpark, not pre-approval. Remember stamp duty & costs come out of your deposit too.
The question that sets your property search isn't what you think you can afford — it's what a lender will hand over. Serviceability works backwards from your pay: what's left each month once tax and living costs are gone, and how large a loan that leftover can service.
The part that catches buyers out is that you aren't assessed at the rate you'll be charged. Lenders must check you could still repay if rates rose, so your surplus is tested against a higher, hypothetical rate. That one rule is usually why a bank's number lands below what a repayment calculator suggests.
How this is calculated
- 1
Turn your salary into take-home pay
Your gross salary runs through the 2026-27 resident tax brackets and the Medicare levy, and what survives is divided by twelve. A lender assesses the money that reaches your account, not your package.
- 2
Subtract living expenses to find your surplus
Monthly living expenses come off take-home pay, and the remainder is treated as the amount available to service a loan. That surplus is the engine of the whole calculation — no surplus, no borrowing power.
- 3
Add the serviceability buffer to your rate
The surplus isn't tested at the rate you entered. A 3 percentage point buffer is added first, matching APRA's expectation that lenders assess new home loans well above the rate on offer.
- 4
Convert the surplus into a maximum loan
The loan is the present value of that surplus paid for 30 years at the buffered rate — the largest principal-and-interest loan whose stressed repayment exactly consumes your surplus. Your deposit plays no part here.
- 5
Add your deposit to reach a purchase price
The headline price is the maximum loan plus your savings. The advanced section re-solves it one state at a time, because stamp duty comes out of that same deposit and shrinks what you can actually settle on.
What it assumes
- One salary, and salary only. A partner's income, overtime, bonuses, rent and investment income all sit outside the model.
- Take-home covers income tax and the Medicare levy only. A HECS or HELP repayment, the Medicare levy surcharge and salary sacrifice aren't applied — a study loan will pull a lender's assessment lower.
- No existing debts are counted. Car and personal loans reduce your surplus, and credit cards are usually assessed on the limit rather than the balance, so an unused card still costs you.
- Your expenses figure is taken at face value. Lenders compare it against the Household Expenditure Measure benchmark and generally assess on whichever is higher.
- A 30-year principal-and-interest loan at one unchanging rate. Interest-only periods, offset accounts, fixed splits and future rate moves aren't modelled.
- Upfront costs aren't taken out of your deposit in the headline number. Stamp duty, lenders mortgage insurance above 80% loan-to-value, conveyancing and moving all draw on the same savings.
Common questions
Why does my bank's number differ from this?
Every lender writes its own credit policy — the floor rate it assesses at, how it shades casual, overtime and bonus income, how it treats dependants and benchmark expenses, how it counts credit-card limits. Two banks reading identical payslips can land a long way apart, so treat this as preparation for a broker conversation, not a substitute for pre-approval.
What is the serviceability buffer, and can it be avoided?
It's a prudential expectation on the lender, not a fee you pay: applications are assessed at 3 percentage points above the actual loan rate, so you have room if rates rise. It's the main reason borrowing power falls when rates go up. Some lenders run an exceptions policy for straightforward refinances, but for a purchase assume the full buffer applies.
Would a bigger deposit let me borrow more?
Not directly. The loan is set by your monthly surplus, not your savings, so extra deposit doesn't change the repayment your income supports. It does raise the price you can reach dollar for dollar, and at or below 80% of the property value it removes lenders mortgage insurance.
How much difference do my living expenses really make?
More than most people expect. Because the surplus is capitalised over 30 years, a modest change in monthly spending moves the loan by a large multiple of that amount. The advanced section's sensitivity grid re-runs the calculation on your own figures.
Sources: APRA — Prudential Practice Guide APG 223 Residential Mortgage Lending · ATO — Individual income tax rates (residents) · ATO — Medicare levy · All data sources
See also: Mortgage repayments · Stamp duty · First-home deposit & LMI · Rent vs buy
General information only, not financial advice. Figures are estimates based on the inputs and assumptions above and don't account for your personal circumstances. Confirm anything important with the relevant authority or a licensed adviser.