How much can you borrow for a home loan? Enter your income, expenses and debts below to find out — updated for Australian lending rules in 2026. Free, no sign-up, no obligation.
Built by Anish Puri, Founder & CEO of NestPath · Updated May 2026
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Your borrowing power — sometimes called borrowing capacity — is the maximum amount an Australian lender will lend you based on your income, living expenses, existing debts and the current interest rate plus a 3% APRA-mandated stress-test buffer. As a very rough rule of thumb, most lenders will lend 5–6 times your gross annual income, but this ceiling moves dramatically based on your specific financial situation.
Most first home buyers are surprised to learn that borrowing power varies between lenders by $50,000–$100,000 for the same person. Each lender uses a different expense benchmark (HEM vs actuals), different income shading rules for bonuses and overtime, and different credit policies for HECS, casual income and rental income. Using an independent borrowing power calculator gives you a baseline number before you speak to any lender.
For a deeper dive, read our guide on how much you can really borrow — it covers the gap between calculator estimates, bank maximums, and what you can comfortably afford to repay.
Lenders assess your gross income: base salary, regular overtime, bonuses, commission, rental income and certain government payments. Irregular income (bonuses, commission, overtime) is usually "shaded" — discounted by 20–50% depending on the lender. Self-employed borrowers need two years of tax returns in most cases. PAYG employees with stable income get the most favourable assessment.
Every dollar of existing debt reduces your borrowing power. Credit cards are the biggest hidden killer — lenders count the full credit limit as a liability, not the balance. A $10,000 limit you never use can cut $30,000–$50,000 from your borrowing power. Car loans, personal loans and Afterpay/Zip accounts all count. Read our guide on how credit cards kill borrowing power for the full breakdown.
HECS is not counted as a traditional debt, but the compulsory salary repayment reduces your assessable income and therefore your borrowing capacity. On a $90,000 salary with $30,000 HECS, the compulsory repayment is ~$4,500/year — costing roughly $25,000–$35,000 in borrowing power. Some lenders treat HECS more generously than others. See our detailed guide on how HECS debt affects your home loan.
This is the single most common surprise for first home buyers. Banks assume you could max out your credit card tomorrow, so they assess your ability to service the full limit at ~3.8% per month (the regulatory monthly rate). A $15,000 limit turns into an assessed $570/month commitment — even if your balance is zero. Before you apply, reduce or cancel every card you don't actively need.
Each dependant increases your assessed living expenses under the Household Expenditure Measure (HEM). A couple with no children typically has $80,000–$120,000 more borrowing power than the same couple with two children, all else equal.
Lenders use the higher of your declared expenses or the HEM benchmark for your household size and postcode. Being frugal doesn't always help — if your declared number is below HEM, the lender uses HEM anyway. But if your actual expenses are higher (private school fees, car payments, gym memberships, streaming subscriptions), the higher number applies and reduces capacity further.
A 30-year loan term lifts capacity compared to 25 years because the assessed monthly repayment is smaller. The interest rate matters even more — a 0.5% lower rate can lift your borrowing power by $20,000–$40,000 on a typical first home buyer loan. A broker compares 30+ lenders to find the rate AND the most favourable serviceability model.
If your borrowing power estimate is lower than you hoped, here are the six proven strategies that actually move the number:
You can also use our mortgage repayment calculator to see how different loan amounts and terms translate into monthly repayments, and the stamp duty calculator to plan the upfront costs that sit on top of your deposit.
Once you're close to an offer, budget $450–$900 for a building and pest inspection before you commit — it's the cheapest way to catch $10,000+ problems before they become yours. See our full building and pest inspection guide for what's covered and how to read the report.
If you are considering building a new home rather than buying an established one, construction loans work differently — the lender drawsdown funds in stages as the build progresses, and you only pay interest on what has been drawn so far. This usually means lower borrowing costs during the build than a standard home loan of the same amount. Our guide to building a house in Australia covers 2026 build costs, the 5 progress-payment stages, and how to size a construction loan correctly.
Here's a rough guide to borrowing power by annual salary in Australia in 2026. All figures assume a single borrower, no dependants, no existing debts or credit cards, a 30-year loan term and a 6.5% assessment rate including the APRA buffer. Your actual number can be $50,000–$150,000 higher or lower depending on lender, expenses and debt profile.
| Annual salary | Est. borrowing power (single, no debts) |
|---|---|
| $60,000 | $330,000 – $380,000 |
| $80,000 | $450,000 – $520,000 |
| $100,000 | $570,000 – $660,000 |
| $120,000 | $690,000 – $800,000 |
| $150,000 | $870,000 – $1,000,000 |
| Couple: $150,000 combined | $800,000 – $920,000 |
| Couple: $200,000 combined | $1,050,000 – $1,200,000 |
These are estimates only. Actual borrowing power varies by lender, expenses, debts and credit history. Use the calculator above for a personalised estimate.
Our broker partners specialise in first home buyers. Get a free pre-approval assessment — no obligation, no cost, compare 30+ lenders through one broker.
Find a Broker — Free →A single borrower on $80,000 with no dependants, no existing debts and no credit cards can typically borrow between $450,000 and $520,000. Add a $10,000 credit card limit and borrowing power drops by $30,000–$50,000. Add a HECS-HELP debt and it drops by another $20,000–$35,000. Every lender assesses differently, so the range can span $70,000 or more between banks — this is why using a broker often unlocks a higher approval than going direct to your bank.
Yes — significantly. Lenders count the full credit card limit as a liability, not the balance. A $10,000 credit card limit you never use still reduces your borrowing power by approximately $30,000–$50,000 because the lender assumes you could max it out tomorrow. Cancelling unused cards before you apply is one of the fastest ways to lift your approval amount.
Yes. While HECS isn't treated as traditional debt, the compulsory repayment deducted from your salary reduces your assessable net income, which reduces borrowing capacity. On a $90,000 salary with $30,000 in HECS, you might lose $25,000–$35,000 in borrowing power. Some lenders treat HECS more favourably than others — a broker can match you with the most generous lender for your situation.
The six proven ways: cancel unused credit cards, pay down personal and car loans, reduce discretionary spending for 3 months before applying, apply jointly with a partner, choose a 30-year loan term instead of 25, and use a broker who can match you to the lender with the most favourable serviceability model for your specific income and debt profile.
As little as 5% with the First Home Guarantee scheme (which also waives LMI), or typically 10–20% without the scheme. Anything under 20% triggers Lenders Mortgage Insurance which can add $10,000–$30,000 to your upfront costs. You also need 3–5% of the purchase price on top for stamp duty, conveyancing and building inspections. Use our stamp duty calculator to estimate the full upfront cost.
A well-built calculator using current Australian lending rules (including the 3% APRA serviceability buffer) will typically get you within 10–15% of what a lender will formally approve. The variation comes from lender-specific credit policy. For an exact number, speak to a broker or lender for pre-approval — the calculator is a starting point, not a guarantee.
Everything you need to buy your first home