Borrowing power is the maximum amount a lender will let you borrow for a home loan. It varies significantly based on income, expenses, debts and the number of dependants. Here is how it is calculated and what you can realistically expect in 2026.
What Lenders Assess
Australian lenders use a debt serviceability calculation based on the Household Expenditure Measure (HEM) or your declared expenses. They apply a “stress test” buffer — as of 2026, lenders assess your ability to repay at the interest rate plus 3% (the APRA serviceability buffer), currently around 8.5–9.5% for most loans.
Typical Borrowing Power by Salary — 2026
| Annual Income | Single (no deps) | Couple (no deps) | Couple (2 children) |
|---|---|---|---|
| $70,000 | ~$340,000 | n/a | n/a |
| $100,000 | ~$510,000 | ~$780,000 | ~$620,000 |
| $140,000 | ~$730,000 | ~$1,070,000 | ~$860,000 |
| $180,000 | ~$950,000 | ~$1,400,000 | ~$1,100,000 |
*Estimates only. Assumes 20% deposit, standard expenses. Actual amounts vary by lender, existing debts and credit score.
What Reduces Borrowing Power
- Credit card limits — lenders count the full limit, not just what you owe. A $10,000 credit card can reduce borrowing power by $50,000+
- HECS/HELP debt — repayments reduce disposable income
- Dependants — each child typically reduces borrowing power by $40,000–$80,000
- Existing loans — car loans, personal loans, other mortgages
- Declared expenses — subscriptions, private school fees, high lifestyle costs
How to Maximise Your Borrowing Power
- Cancel unused credit cards before applying
- Pay down existing debts
- Avoid new credit applications in the 3 months before applying
- Apply with a co-borrower (partner)
- Use a mortgage broker — different lenders assess serviceability differently
Calculate Your Borrowing Power
Get an instant estimate of how much you can borrow based on your income and situation.
Disclaimer: General information only. Not financial advice. Always consult a licensed professional before making financial decisions.