Australia Borrowing Power & Home Loan Serviceability Calculator
What a lender’s serviceability test leaves you able to borrow, and the LVR it means.
2026–27 income year APRA serviceability buffer · an estimate · Sources
The property
Rules used and official sources
- APRA: loan serviceability buffer of 3 percentage points
- APRA: macroprudential policy settings (serviceability buffer, debt-to-income limit)
- APRA: limit on high debt-to-income home loans
- Moneysmart (ASIC): buying a house
- Australian Government: 5% Deposit Scheme
- ATO: tax rates for Australian residents
- ATO: Medicare levy reduction for low-income earners
- ATO: study and training loan repayment thresholds and rates
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Australia Borrowing Power & Home Loan Serviceability Calculator
Australian lenders decide how much to lend with a serviceability test: your income after tax, less your living expenses and existing commitments, must cover the repayments on the new loan at an assessment rate — the loan’s interest rate plus a buffer. APRA expects banks to use a buffer of at least 3 percentage points.
This calculator runs that test: it works out your income after income tax, the Medicare levy and any HELP repayment, takes off the expenses and debts you enter, and finds the largest principal-and-interest loan the surplus repays at the assessment rate. Add a property price and deposit to see the loan-to-value ratio (LVR), whether lenders mortgage insurance is likely, and the debt-to-income ratio APRA watches. Lenders use their own policies, so treat the result as an estimate. Nothing you type leaves your browser.
How to use it
- Enter each applicant’s gross salary and tick if they have a HELP debt. Add other income, such as rent, and the share of it you expect the lender to count.
- Enter your living expenses a month, repayments on existing loans and your total credit card limits.
- Enter the loan’s interest rate and term. The buffer starts at APRA’s 3 percentage points; add your lender’s floor rate if you know it.
- Optionally enter the property price and your deposit to see the loan needed, the LVR and whether it fits your borrowing power.
- Read the estimated borrowing power, the repayments and the checks; copy the summary.
Examples
$6,456.67 a month after tax − $3,000 = $3,456.67 surplus, tested at 9%
About $429,000; repayments $2,572 a month at 6%
$10,655 a month after tax − $4,000 − $300 (3% of the card limit) = $6,355
About $789,000 at the same rate and buffer
Loan $540,000 · LVR 90%, so lenders mortgage insurance is likely
The serviceability buffer
APRA, which supervises banks, expects them to assess new borrowers’ ability to repay at an interest rate at least 3.0 percentage points above the loan product rate (APRA), and its macroprudential policy settings keep the buffer at 3 percentage points (APRA). Lenders may also set their own minimum assessment (floor) rate; the calculator uses whichever is higher. A loan at 6% is therefore tested at 9%: a higher repayment than you would actually pay, which leaves room for rate rises.
Debt-to-income ratio
Debt-to-income (DTI) is your total debt divided by your gross income. APRA limits banks to 20% of new owner-occupied and investment lending at a DTI of 6 or more; the limit does not cover owner-occupier bridging loans or loans to buy or build new dwellings (APRA). A high DTI does not stop a loan, but some lenders lend less at that level.
Deposit, LVR and lenders mortgage insurance
The loan-to-value ratio is the loan divided by the property’s value. A 20% deposit usually avoids lenders mortgage insurance (Moneysmart). Under the Australian Government 5% Deposit Scheme, eligible first home buyers can buy with a 5% deposit, and single parents or legal guardians with 2%, without paying it: there are no income caps, but there are price caps and you must live in the home (Australian Government). Remember stamp duty and other buying costs when you work out your deposit: the Australia Stamp Duty Calculator covers every state.
Income after tax
Income is taxed at the current resident rates with the low income tax offset and the 2% Medicare levy, and a HELP debt takes its compulsory repayment (15% of repayment income above $69,528, more on higher incomes) — the same rules as the Australia Pay Calculator. Other income is added to the first applicant’s income at the share you choose.
Limitations
- An estimate, not a loan offer. Lenders have their own policies for living expenses, for counting overtime, bonuses, rent and self-employed income, and for interest-only or investment loans.
- Credit card limits are counted at the share of the limit you choose; lenders set their own figure.
- Repayments are principal and interest, monthly, at one rate for the whole term.
- Living expenses are your own figure; the calculator does not use a household expenditure benchmark.
Privacy
Everything happens in your browser. What you enter or open here is not uploaded or stored by MySmartCoPilot.
Frequently asked questions
How much can I borrow on $100,000 a year?
With $3,000 a month of living expenses, no other debts and a 6% rate over 30 years, the serviceability test at 9% gives about $429,000. Lower expenses, a second income or a lower rate raise it; credit card limits and other loans lower it.
Why is the assessment rate higher than my interest rate?
APRA expects banks to check that you could still repay if rates rose, so they test repayments at least 3 percentage points above the loan rate. You pay the actual rate; the buffer only limits how much you can borrow.
Can credit cards reduce my borrowing power even if I pay them off?
They can: a lender may count a monthly repayment on each card’s limit rather than on what you owe. Enter your total limits and the share your lender uses to see the effect.
Does a HELP debt affect my borrowing power?
Yes. The compulsory HELP repayment comes out of your income after tax, so it reduces the surplus available for loan repayments. Tick HELP for each applicant who has one.
What deposit do I need to avoid lenders mortgage insurance?
Usually 20% of the price. Under the Australian Government 5% Deposit Scheme, eligible first home buyers can buy with a 5% deposit, and single parents or legal guardians with 2%, without paying it, within the scheme’s price caps (Australian Government).
Is my information sent anywhere?
No. Everything is calculated in your browser; nothing you enter is uploaded or stored on a server.