Borrowing Capacity Calculator Australia 2025–26
Find out how much you can borrow using the same method Australian lenders use — including the APRA 3% serviceability buffer and the Household Expenditure Measure (HEM) expense floor.
Income
Loan details
Existing commitments
Your borrowing capacity
Enter your income and hit Calculate to see your estimated borrowing power.
How Australian banks calculate borrowing capacity
Lenders work backwards from your net surplus income — what remains after tax, living expenses, and existing debt commitments — then find the largest loan whose repayments fit within that surplus.
The APRA 3% serviceability buffer
Since 2021, APRA requires all lenders to stress-test your loan at your actual rate plus 3 percentage points. If you apply at 6.5%, the bank checks you can afford repayments at 9.5%. This calculator shows both figures so you can see the gap.
What is the HEM?
The Household Expenditure Measure (HEM) is a minimum living expense benchmark. Banks use the higher of your declared expenses or HEM for your income and family size. Declaring lower expenses than HEM doesn't help — the bank substitutes the floor automatically.
Frequently asked questions
How accurate is this calculator?
It models the standard serviceability method used by most major Australian banks. It is a close approximation — different lenders use slightly different HEM tables and credit policy overlays.
Why is the comfortable borrow lower than the bank max?
The bank max is the ceiling at which you just pass serviceability. The comfortable borrow (80%) gives headroom for rate rises and unexpected expenses.
Do credit cards count even if I pay them off monthly?
Yes. Lenders assess 3.8% of your total credit card limit per year as a committed repayment, regardless of balance. Cancelling unused cards can meaningfully increase your borrowing capacity.
Does HECS debt affect how much I can borrow?
Yes. HECS repayments reduce your net income for serviceability purposes. Find your HECS repayment in the salary calculator and add it to the other loan repayments field above.