Key takeaways
- Lenders assess your income, living expenses, existing debts and a mandated interest-rate buffer — not just your salary.
- Borrowing power can vary by 20% or more between lenders for the same person, because each treats income and expenses differently.
- Credit card limits, HECS/HELP and car loans reduce what you can borrow — even cards you never use.
- There are legitimate ways to increase your borrowing power before you apply.
“How much can I borrow?” is usually the first question a buyer asks, and it’s the one online calculators answer worst. They apply one generic formula; real lenders each apply their own. Understanding what actually drives the number puts you in control of it.
What lenders look at
Your income — and how it’s earned
Salary is straightforward. Overtime, bonuses, commissions, casual income, rental income and self-employed profits are not — some lenders count 100% of them, some count 80%, some ignore them entirely. This single difference is why two lenders can reach very different numbers for the same applicant.
Your living expenses
Lenders review your declared living expenses against benchmarks and, increasingly, your actual bank statements. Trimming genuine spending in the months before applying can lift what a lender will offer.
Your existing debts and limits
Every repayment you already make — car loans, personal loans, HECS/HELP, buy-now-pay-later — comes off your capacity. Credit cards are assessed on the limit, not the balance: a $20,000 limit you never touch can cut roughly $80,000–$100,000 from your borrowing power.
The serviceability buffer
Lenders don’t test whether you can afford today’s rate — regulation requires them to test you at your rate plus a buffer (currently around 3 percentage points). It’s why your borrowing power is lower than a repayment calculator implies, and it’s there to protect you when rates move.
Why the answer differs so much between lenders
Each lender sets its own policy on which income counts, how expenses are benchmarked, and how existing debts are treated. For a straightforward PAYG applicant the spread might be modest; for anyone with bonuses, casual hours, rental income or their own business, the spread between the most and least generous lender is routinely 20% or more. A broker’s job is knowing where you land best.
The bank that gave you a disappointing number isn’t “the market.” It’s one policy out of forty. Before you shrink your property search, it’s worth checking what the rest of the market says.
How to increase your borrowing power
- Cancel or reduce credit card limits you don’t need — the effect is immediate.
- Clear small debts (car and personal loans) where feasible.
- Tidy your spending for at least three months before applying.
- Choose the right lender for how your income is earned — the biggest lever of all.
- Consider loan structure: term, repayment type and rate all shift the assessment.
Get your real number — across 40+ lenders
A free Game Plan Call gets you your actual borrowing power with the lenders that suit how you earn — not a one-size-fits-all calculator estimate.
Book your free game plan callFrequently asked questions
How accurate are online borrowing power calculators?
Treat them as a rough starting point only. They can’t apply individual lender policy on overtime, casual or self-employed income, and most ignore the differences between lenders entirely. Your real figure — with the right lender — is often meaningfully different.
Does HECS/HELP debt reduce how much I can borrow?
Yes. The compulsory repayment comes off your assessable income, which reduces capacity. Whether it’s worth paying down before buying depends on your situation — it’s a calculation we can run with you.
Do credit cards I never use still matter?
Yes — lenders assess the full limit as if it were drawn. Cancelling or reducing unused limits is one of the fastest, cheapest ways to increase your borrowing power before applying.
This guide is general information only and does not take your personal circumstances into account. It is not financial or credit advice. Government schemes, lender policies and rates change over time and eligibility criteria apply. Speak with us for advice tailored to your situation.