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Banks assess borrowing capacity using serviceability ratios, typically applying a 3% interest rate buffer above current rates.
The calculator uses HEM (Household Expenditure Measure) benchmarks to estimate living expenses if not provided.
Reducing existing debts and credit card limits can significantly increase your borrowing capacity. Pay down debts before applying.
Important Disclaimer & Assumptions
Assumptions: Uses a simplified assessment model. Actual borrowing capacity depends on lender-specific serviceability calculators, credit history, employment type, and debt assessment policies. Includes a serviceability buffer above the actual rate. Living expenses are estimated using HEM benchmarks.
General Disclaimer: This calculator is provided by Mortgage & Finance Advisory (Credit Representative 575841 of Connective Credit Services Pty Ltd, Australian Credit Licence 389328) for illustrative and educational purposes only. Results are estimates based on the information you provide and the assumptions listed above. They do not constitute financial advice, a loan offer, or a guarantee of any outcome.
Actual loan terms, interest rates, fees, government charges, and eligibility criteria will vary between lenders and depend on your individual circumstances. Interest rates used are for comparison purposes only and may not reflect current market rates.
We recommend seeking independent financial, legal, and tax advice before making any financial decisions. For personalised advice tailored to your situation, please book a free strategy call with our team.
© 2026 Mortgage & Finance Advisory. All rights reserved. ABN: 90 732 203 952 | Credit Representative 575841 of Connective Credit Services Pty Ltd, Australian Credit Licence 389328
Banks assess your borrowing power using your gross income, existing debts, living expenses (using HEM benchmarks or actual expenses), credit card limits, and the assessment rate (typically 3% above the actual rate). Each lender has different criteria and serviceability buffers.
Key factors that reduce borrowing power include existing debts (personal loans, car loans), credit card limits (even if unused), HECS/HELP debt, high living expenses, dependents, and short employment history. Reducing these can significantly increase what you can borrow.
To increase borrowing capacity: pay off existing debts, reduce credit card limits, minimise living expenses, increase your income, extend the loan term, consider a joint application, and shop around as different lenders have different assessment criteria.
