Question 1

How much can I borrow for a home loan in Australia?

Accepted Answer

Lenders start with your income, subtract your living expenses and existing debt commitments, and see what surplus is left to service a loan. They then stress-test that surplus at an assessment rate above the actual rate — typically around three percentage points — so the loan still works if rates rise. The calculator sketches that arithmetic. It is illustrative only: no calculator can replicate an individual lender’s credit policy.

Question 2

What is the serviceability buffer?

Accepted Answer

APRA expects lenders to assess new loans at an interest rate meaningfully above the rate you will actually pay, so borrowers are not approved for a loan that fails the moment rates move. That buffer is why your borrowing power is well below what the advertised rate alone would suggest, and why a rate cut does not increase capacity as much as people expect.

Question 3

Why is my borrowing power lower than I expected?

Accepted Answer

Usually one of four things. The assessment buffer reduces what your surplus can support. Lenders apply expense benchmarks such as HEM and use the higher of your declared expenses and the benchmark. Credit card limits are assessed on the limit, not the balance, so an unused card still reduces capacity. And HECS/HELP repayments, car loans and buy-now-pay-later commitments all count. Lenders also shade variable income such as bonus, commission, overtime and rent.

Question 4

Do lenders use my actual expenses or a benchmark?

Accepted Answer

Generally the higher of the two. You declare your living expenses, the lender compares them against a benchmark like the Household Expenditure Measure, and assesses on whichever is greater. Declaring implausibly low expenses does not increase borrowing power — it just gets substituted for the benchmark and can raise questions about the rest of the application.

Question 5

Does this calculator mean I am approved?

Accepted Answer

No, and it should not be read that way. It is an illustrative sketch of surplus converted into an indicative loan amount. It does not apply any specific lender’s credit policy, expense benchmarks, income shading rules, or property and postcode restrictions, and it performs no credit check. Only a lender can approve a loan. Azure Home Loans — ACR 538895, auth. under ACL 390261.

Question 6

How can I increase my borrowing power?

Accepted Answer

The levers that move it most are usually reducing or closing credit card limits, clearing small personal and car loans, and demonstrating stable income over time. Beyond that, lender choice matters more than most borrowers realise: policy on bonus, commission, casual and self-employed income differs enough between lenders that the same file can produce materially different capacity. That difference is a large part of what a broker is for.

Question 7

Should I borrow the maximum I am approved for?

Accepted Answer

Rarely a good idea on its own. Maximum capacity is a ceiling set by a lender’s risk model, not a recommendation about what is comfortable for you. It is worth checking the repayment at your maximum against your actual take-home pay, and asking what happens if rates rise or income changes, before treating the ceiling as a target.

Borrowing power calculator — how much can I borrow?

This is a sketch, not an approval

How it works

What this covers

What it does not do

Work the number from both ends

Borrowing power — frequently asked questions

Want the number a lender would actually reach?

Know your range — ready to test it properly?