If you've ever typed "how much can I borrow" into Google, you've probably been handed a number that made your eyes water. $750,000. $900,000. Maybe even over a million. And somewhere in the back of your mind, a quiet voice said, really? Me?
Here's the thing almost nobody tells you upfront: the number a bank says you can borrow and the number you can comfortably afford are two very different things. In 2026, with the serviceability buffer still doing its job and a few of the old rules quietly changing, the gap between those two numbers is wider than ever. This is the honest version of what's going on, how the figure gets built, what HECS and your credit card actually cost you, and how to land on a number that lets you sleep at night.
What home loan borrowing power actually means
Your home loan borrowing power is, in plain terms, the largest loan a lender thinks you can repay without falling over. The maths runs like this: they take your gross income, subtract your living expenses (the higher of what you declare or a benchmark figure called HEM), subtract the cost of your existing debts, then stress-test what's left at a much higher interest rate. Whatever survives that test becomes your maximum loan.
That's the whole machine. They're answering one question, "Can this person make the repayments without defaulting?", and nothing else. They're not asking whether you'll still afford a holiday, keep saving for retirement, or cover a surprise vet bill. They just want to know the mortgage gets paid.
Two details matter here. The first is HEM, the Household Expenditure Measure: a benchmark of what a household like yours typically spends on essentials. Lenders use whichever is higher: your declared expenses or the HEM figure, so understating your spending on the application doesn't help you. The second is the stress test, which we'll come to next, because it's the single biggest reason the bank's number looks the way it does.
The figure that pops out the other end is a theoretical maximum. It's not a recommendation. It's not what you can comfortably afford. It's the ceiling, and borrowing right at the ceiling is exactly how people end up financially stretched. Once a lender gives you a number, work out the actual monthly repayment on that scenario and hold it up against your real budget, not theirs.
How much can I borrow for a home loan in Australia? (a salary guide)
This is the question everyone actually wants answered, so let's answer it. Below is a rough guide to how much you might borrow for a home loan based on income alone. Read the assumptions first, because they change everything.
These figures assume: a 30-year loan term; an assessment rate of around 9.5% (an example offer rate near 6.5% plus APRA's 3% buffer); HEM-level living expenses; and no other debts: no HECS, no credit card, no car loan. They're illustrative, not a quote. Your real number moves the moment any of those change, which is exactly why a table can never replace running your own figures.
- $60,000 single income, roughly $220,000 to $300,000
- $80,000 single income, roughly $330,000 to $420,000
- $100,000 single income, roughly $450,000 to $540,000
- $120,000 single income, roughly $560,000 to $680,000
- $150,000 single income, roughly $720,000 to $860,000
For couples, the numbers climb faster than you'd expect, because two incomes share one set of living expenses:
- $120,000 combined ($60k + $60k), roughly $540,000 to $640,000
- $160,000 combined ($80k + $80k), roughly $770,000 to $910,000
- $200,000 combined ($100k + $100k), roughly $1,000,000 to $1,200,000
Notice the wide bands. That spread is real. Different lenders use different living-expense assumptions, treat overtime and bonuses differently, and set their own rate floors. The same couple can walk away with offers $100,000 apart from two banks on the same day. So treat the table as a starting sense of scale, then run your real number on our borrowing power calculator with your actual income, deposit and debts. It's free, and it gives you both the bank's ceiling and the figure you can genuinely live with.
The serviceability buffer (and why the bank's number is so high)
Here's the rule sitting behind every figure above. The serviceability buffer is an APRA requirement that lenders assess your repayments at an interest rate at least 3 percentage points above the actual rate you'd pay. So if a bank offers you a loan at 6.5%, they don't check whether you can afford repayments at 6.5%: they check whether you could still make them at 9.5%.
That 3% buffer has held since October 2021, and APRA reaffirmed it again in 2025, leaving it unchanged into 2026. The logic is sound: rates move. If you could only just cover repayments at today's rate, a single rate rise would tip you over. The buffer is meant to give you headroom.
But here's the catch worth a second look. The buffer protects the bank, not your lifestyle. It's there to make sure you almost certainly won't default, not to make sure you'll still be able to save, take a holiday, or absorb a rough month. You can pass the 9.5% stress test on paper and still feel the squeeze at 6.5% in real life. Passing the test and thriving are not the same thing.
The debts that quietly cut your borrowing power
This is where a lot of first home buyers get blindsided. You might feel like your finances are in great shape: steady job, decent savings, no missed payments. The bank looks at the same picture and sees commitments you'd forgotten were even there.
Does HECS affect borrowing power?
Yes, but less than it used to. This one changed in 2025, so old advice is now partly wrong. From late 2025, lenders may, by exception, leave your HELP repayments out of their serviceability assessment if your debt is on track to be cleared within about 12 months, and HECS is now excluded from the debt-to-income figure banks report to APRA. Some lenders go further and disregard small balances (for example, those at or below around $20,000). For most people with a larger balance, though, HECS still gets treated as an ongoing cost that trims your income before the loan is even calculated, so a borrower earning $85,000 might be assessed closer to $81,000. The honest summary: HECS can still dent your borrowing power, but in 2026 how much depends on your balance and your specific lender, and it's no longer a guaranteed hit. We dig into the detail in our guide to HECS debt and home loan borrowing power.
Credit cards
This is the one that genuinely shocks people: banks assess your credit card on its full limit, not your balance. Got a $10,000 card you never touch? The bank assumes you could max it out tomorrow, so it deducts a notional repayment, roughly $300 to $450 a month, from your available income, even if your balance sits at zero. That single unused card can quietly cost you somewhere around $30,000 to $50,000 in borrowing power. It's one of the easiest wins on this list, and we explain it in how your credit card is killing your borrowing power.
Car loans and personal loans
Repayments on car and personal loans come off your capacity close to dollar-for-dollar. As a rough broker rule of thumb, a $500-a-month car loan doesn't just cost you $500. It can reduce your maximum loan by around $55,000 to $65,000. The exact figure depends on the rate and term left, but the direction is always the same: ongoing repayments shrink the ceiling.
Buy Now Pay Later
Yes, Afterpay and Zip count too, and the rules tightened recently. Since 10 June 2025, Buy Now Pay Later has been regulated as credit under the National Consumer Credit Protection Act (ASIC's RG 281), which means lenders now treat it like any other credit commitment rather than a grey-area extra. A few hundred dollars in BNPL might feel harmless, but it reads to a bank as a sign you're leaning on credit for everyday spending, and it's now formally part of the assessment.
Why we show you two numbers
Most calculators online give you one figure: the bank maximum. It's useful, but on its own it's misleading, like a restaurant telling you the priciest thing on the menu without ever asking what you actually feel like eating.
That's why NestPath shows you two:
Your Bank Maximum is the theoretical ceiling, the most a lender will give you based on your income, expenses and debts under APRA's serviceability rules. Your Comfortable Borrowing figure is a more realistic amount that leaves you room to breathe: room for rate rises, surprise costs, and actually enjoying the home you bought. As a guide, the comfortable figure usually sits around 75 to 80% of the bank maximum.
That second number is the one that matters most, and almost no competitor leads with it. It's the difference between buying a home and being owned by one. We also show you exactly why your figure is what it is: how much your HECS is costing you, what your credit card is doing, how your spending compares to the benchmark, so there's no black box. You can see both numbers side by side here.
Worked examples: bank max vs comfortable
Numbers land better with a face on them. Here are two quick scenarios. Both are illustrative and use the same assumptions as the table above (30-year term, about 9.5% assessment rate, HEM living expenses). They're for shape, not a quote.
Maya, single, $85,000 salary, with HECS and a $5,000 credit card. On income alone she might reach a bank maximum near $400,000. But the HECS repayment trims her assessed income, and that unused $5,000 card knocks off a chunk more, pulling the realistic ceiling down. Even at her bank max, repayments would eat most of her after-tax pay. Her comfortable figure, the one that still lets her save and handle a bad month, sits closer to $300,000 to $320,000. Closing the card and getting clear on her HECS position is what moves that needle.
Sam and Alex, couple, $160,000 combined, no debt. Two incomes against one set of household expenses pushes their bank maximum to somewhere around $850,000 to $900,000. But borrowing the full amount would mean repayments swallowing a huge share of their take-home pay the moment rates twitch. Their comfortable number lands nearer $680,000 to $720,000, still a serious home, with the breathing room the bank's figure quietly removes.
The pattern is the same every time: the bank's number tells you what you can get away with; the comfortable number tells you what you'll actually enjoy living with.
How to increase your borrowing power
If your number came back smaller than you hoped, the good news is that a few of the biggest levers are entirely in your hands. Here's where to start:
- Close unused credit cards. Cancel them, and get written confirmation. Because banks assess the full limit, killing a card you never use is the fastest way to lift your borrowing power, often the cheapest $30,000 to $50,000 you'll ever find.
- Get on top of your HECS. You can't make it vanish overnight, but knowing your balance and how your lender treats it (especially after the 2025 changes) lets you plan around it, and possibly time your application better.
- Clear or shrink other debts. Paying down a car or personal loan, or refinancing it onto a longer term, frees up the monthly repayment the bank is counting against you.
- Run your real numbers. Not a generic calculator that spits out one figure, but a tool that shows you both the ceiling and the comfortable amount, with the maths laid bare.
Two more things worth a line. Your deposit sits alongside your borrowing power, not inside it: a bigger deposit means a smaller loan and can help you dodge Lenders Mortgage Insurance. Track yours with the deposit tracker, check the LMI you might face with the LMI calculator, and read our breakdown of how much deposit you actually need. And if you want a number tied to a specific lender's policy rather than a benchmark, a good broker can run it across multiple banks at once, so find one here. When you're ready, the honest place to start is your real figure: run it on the borrowing power calculator.
Frequently asked questions
How much can I borrow on a $100,000 salary in Australia?
As a single applicant earning $100,000 with no other debts, you could borrow roughly $450,000 to $540,000 for a home loan. That assumes a 30-year term, an assessment rate around 9.5% (about a 6.5% offer rate plus APRA's 3% buffer) and HEM-level living expenses, so it's illustrative, not a quote. Adding HECS, a credit card or a car loan lowers it; a partner's income raises it. For your real figure, use the borrowing power calculator.
What salary do I need for a $500,000 home loan?
To borrow $500,000 as a single applicant with no other debts, you'd typically need a gross income of around $95,000 to $110,000, on the same assumptions (30-year term, about 9.5% assessment rate, HEM expenses). A couple can reach $500,000 on a lower combined income because they share one set of living expenses. Existing debts push the required salary higher, so check your own scenario rather than relying on a flat figure.
Does HECS reduce how much I can borrow?
Yes, but less than it used to. Since the 2025 changes, lenders may exclude your HELP repayments from serviceability where the debt is on track to clear within about 12 months, and HECS is now excluded from the debt-to-income ratio banks report to APRA, with some lenders disregarding small balances entirely. For larger balances it still reduces your assessed income, so the impact now depends on your balance and your specific lender. See HECS debt and home loan borrowing power for the detail.
Do banks really count my full credit card limit?
Yes. Lenders assess your credit card on its limit, not your balance, so a $10,000 card counts even if you owe nothing on it. They deduct a notional repayment of roughly $300 to $450 a month, which can cut your borrowing power by around $30,000 to $50,000. Closing or lowering the limit on cards you don't use is one of the quickest ways to lift your number, as we explain in how your credit card is killing your borrowing power.
How much deposit do I need on top of my borrowing power?
Your deposit is separate from your borrowing power, and most lenders look for at least 5% of the purchase price, plus costs like stamp duty. Under the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee), eligible first home buyers can purchase with just a 5% deposit and no Lenders Mortgage Insurance; since 1 October 2025 the 5% Deposit Scheme dropped its income caps and place limits and raised the property price caps (for example, up to $1.5 million in Sydney). Work out your timeline with the deposit tracker, check your eligibility with the first home buyer eligibility checker, and read how much deposit you need.
