Borrowing power calculator: how much can you borrow in 2026

A borrowing power calculator estimates the largest home loan an Australian lender is likely to approve for you, based on your income, existing debts, living costs and the rate the bank tests you against. In 2026, lenders assess your repayments at roughly 3 percentage points above the real rate, so your true borrowing power is usually lower than the advertised rate suggests.

Before you fall for a place in Sydney, Melbourne or Brisbane, this is the one number that decides what you can actually chase. It won't replace a formal approval, but it tells you whether you're shopping at $500,000 or $900,000 before you waste a Saturday at open homes you can't fund.

Want your own figure first? Run the free borrowing power calculator — pop in your income and debts and you'll have an indicative number in about 30 seconds, then read on to make sense of the result.

Last updated: July 2026.

Key takeaways

• A dual-income household earning $150,000 combined can usually borrow roughly $650,000–$780,000 in 2026, depending on debts, dependants and the lender.
• Lenders don't test you at the advertised rate — they add the APRA serviceability buffer of 3.0 percentage points, so a 6.2% loan is assessed near 9.2%.
• Your biggest hidden killers are credit card limits (assessed on the full limit, not the balance), car loans, HECS-HELP and Buy Now Pay Later accounts.
• Cutting a $10,000 unused credit card limit can add tens of thousands to your borrowing power almost instantly.
• A calculator gives an indication only — a lender or mortgage broker confirms the real figure after checking your payslips and statements.

What this guide covers

• Borrowing power estimates for 2026
• How a borrowing power calculator works
• The serviceability buffer and assessment rate
• What lenders count as income
• The debts and expenses that shrink your number
• How to increase your borrowing power
• Frequently asked questions

Borrowing power estimates for 2026

As a rough guide, a couple earning $150,000 combined can borrow around $650,000–$780,000 in 2026, while a single earner on $80,000 sits closer to $430,000–$500,000. The table below assumes a variable rate near 6.2%, standard living costs, no major extra debts, and a 30-year loan term.

These ranges are based on estimates generated through Leadkit's borrowing power calculator using standard Australian lending assumptions for 2026. Leadkit's calculator is our own tool — it's built on general serviceability logic, not a specific bank's credit policy, so your lender's figure will differ.

This is a price indication only. Your lender or mortgage broker will confirm the final figure after assessing your full financial position. Across the home loan enquiries generated through Leadkit, the single most common surprise is how much a modest credit card limit or a novated lease drags the final number down.

Ready to see your own figure? Use the free borrowing power calculator linked above — it takes about 30 seconds and no signup.

How a borrowing power calculator works

A borrowing power calculator works backwards from your monthly surplus — the money left after tax, living costs and existing debt repayments — and figures out the largest loan that surplus can service at the lender's assessment rate.

The engine behind it is serviceability — the lender's test of whether you can comfortably meet repayments. It's not just "income minus rent." Lenders apply a minimum living-expense benchmark called the HEM (Household Expenditure Measure), which sets a floor on your assumed spending based on your income, location and household size. If your declared expenses come in below the HEM, the lender uses the HEM instead.

Because Leadkit builds cost and finance calculators for Australian businesses — mortgage brokers included — we see the same pattern constantly: people plug in their real rent and grocery spend and expect that to be the number the bank uses. It rarely is. The HEM floor is why two people on identical salaries can get very different limits.

The three inputs that move the result most are income, existing debts and the assessment rate. Change any one and your borrowing power moves noticeably.

The serviceability buffer and assessment rate

Lenders never test you at the rate you'll actually pay — they add a safety margin on top. Since late 2021 the Australian Prudential Regulation Authority (APRA) has required lenders to assess new mortgages with a serviceability buffer of at least 3.0 percentage points above the loan's rate.

So if the advertised variable rate is 6.2%, the lender checks whether you could still meet repayments at roughly 9.2% — the assessment rate. This is the biggest single reason your borrowing power feels lower than you expected. It's a deliberate stress test so that if rates climb, you don't tip into mortgage stress.

You can read APRA's current guidance on serviceability standards directly on the APRA website, and the regulator's independent consumer guidance sits with ASIC's Moneysmart service. Both are worth a look before you sign anything.

The practical takeaway: don't assume a rate cut instantly boosts your borrowing power by much. The buffer moves with the rate, so a small drop in the advertised rate only nudges your assessment rate down.

What lenders count as income

Lenders start with your gross income, but they don't treat every dollar equally. Base salary from PAYG employment is the gold standard — it's counted in full. Other income gets discounted ("shaded") to account for its reliability.

• Overtime and bonuses — often shaded to 80% or less, and usually need a two-year history.
• Rental income — commonly counted at 70–80%, since properties sit vacant and cost money to hold.
• Self-employed income — assessed on your last one or two years of tax returns and financials, not your best month.
• Government payments — some (like Family Tax Benefit) are accepted; many are not, depending on the lender and your children's ages.

If you're self-employed, your assessable figure often looks lower than your lifestyle suggests, because tax deductions reduce the income the lender can see. A good mortgage broker knows which lenders read self-employed income more generously. To sanity-check repayments against a given loan size, pair your result with the home loan repayment calculator.

The debts and expenses that shrink your number

This is where most people lose borrowing power without realising. Lenders reduce your capacity for every ongoing commitment — and some hit harder than the balance suggests.

• Credit cards — assessed on the full approved limit, not what you owe. A $15,000 limit you never use still cuts your capacity as if you're paying it down every month.
• Car and personal loans — the monthly repayment is subtracted directly from your serviceable income.
• Buy Now Pay Later — Afterpay, Zip and similar accounts now show on many assessments and count against you.
• HECS-HELP debt — compulsory repayments scale with income and reduce what you can borrow, especially on higher salaries.
• Dependants — each child raises your assumed living costs via the HEM, trimming your capacity.

A quick example: closing or reducing a $10,000 unused credit card can add $40,000–$50,000 to your borrowing power on its own, because the calculator stops assuming a monthly minimum repayment against it. If you're carrying LVR worries too — that's your loan-to-value ratio, the loan divided by the property price — borrowing more can push you over 80% and trigger lenders mortgage insurance, which is its own cost on top.

How to increase your borrowing power

The quickest way to increase your borrowing power is to reduce or cancel unused credit card limits and clear small consumer debts — both lift your assessed surplus the day they're processed, without you earning an extra dollar.

Reduce your credit card limits. Ring your bank and lower the limit, or close cards you don't use. This is the single quickest lever.

Clear small loans. A near-finished car loan with a few thousand left is often worth paying out before you apply; the monthly repayment matters more than the balance.

Extend the loan term. A 30-year term has lower assessed repayments than a 25-year term, which lifts capacity — though you pay more interest over time.

Apply jointly. Two incomes on one application usually beats one, even if the second earner is part-time.

Show a clean six months. Lenders scan your statements. A tidy history with no gambling, no dishonours and no BNPL binge reads far better. For a fuller walk-through, our guide on how much you can borrow for a home loan covers the documentation side, and you can explore every money tool on the finance and property calculators page.

Frequently asked questions

Q: How accurate is a borrowing power calculator?

A: A borrowing power calculator gives a solid ballpark, not a guarantee — usually within 10–15% of what a lender will actually offer. It uses standard serviceability assumptions (an assessment rate, HEM living costs, and your declared income and debts) to estimate a maximum loan. The real figure can move by tens of thousands once a lender applies its own credit policy, shades your overtime or rental income, and verifies your expenses against your bank statements. Use the calculator to shop in the right price range, then confirm with a lender or broker before you make an offer. You can run it as many times as you like to test different scenarios.

Q: Why is my borrowing power lower than I expected?

A: Almost always it's the serviceability buffer plus hidden debts. Lenders test you at roughly 3.0 percentage points above the actual rate, so a 6.2% loan is assessed near 9.2%. On top of that, credit card limits are counted in full, HECS-HELP and car loans are subtracted, and the HEM sets a minimum on your living costs even if you spend less. Together these pull the number down hard. The good news is that debt levers — cutting card limits, clearing small loans — can claw a lot of it back quickly.

Q: Does a higher deposit increase borrowing power?

A: A bigger deposit doesn't directly raise the maximum a lender will let you borrow — that's set by your income and debts. But it lowers your LVR (loan-to-value ratio), which can help you avoid lenders mortgage insurance and unlock sharper interest rates. Both make the overall purchase more affordable and can widen your options. So while the deposit isn't a borrowing power lever in itself, it changes what you can comfortably buy and how much the loan costs you over time.

Q: Do lenders count my HECS-HELP debt?

A: Yes. Compulsory HECS-HELP repayments are deducted from your assessable income because they're a mandatory commitment that scales with what you earn. On higher salaries the repayment rate is larger, so the impact on borrowing power grows. If you're close to paying off your HELP debt, clearing it before you apply can add to your capacity — but weigh that against keeping cash for your deposit and buffer.

Q: Can I borrow more with two incomes?

A: Usually, yes. A joint application adds a second income to the serviceability sum, which typically lifts borrowing power well above a single applicant — even when the second earner works part-time. The catch is that both applicants' debts, credit limits and expenses also go into the assessment, so a co-applicant with a big car loan or a maxed card can offset their income. Run both scenarios through a calculator before deciding who goes on the loan.

Q: How often should I recheck my borrowing power?

A: Recheck it whenever your finances or rates shift — a pay rise, a new car loan, a paid-off debt, or a move in interest rates all change the figure. Because rates and lending settings move through 2026, a number you calculated six months ago may be well out of date. It's a 30-second check, so run it again before you start seriously inspecting properties or before you make an offer.

Final tips before you start house-hunting

Borrowing power is the guardrail that keeps you shopping in the right bracket. Get your indicative number first, then clean up the easy stuff — trim credit card limits, clear a small loan, tidy your spending — and recheck. Those moves often add more capacity than a rate cut ever would.

Just remember the number a calculator gives you is an indication only. A lender or mortgage broker confirms the real figure after checking your payslips, statements and credit file, and the Australian Bureau of Statistics (ABS) lending data shows how much the market shifts year to year. Use the estimate to plan; use a professional to commit.

Run a mortgage business or brokerage? Embed a free Leadkit calculator on your own site in 60 seconds and turn every "how much can I borrow" search into a captured lead — no credit card needed.