How much can I actually borrow, and what reduces my borrowing power?

Your borrowing power is shaped by a small set of financial levers. It is not a fixed number and it can shift noticeably as your circumstances change. Lenders weigh your income against your expenses, existing debt, lifestyle costs, and a regulatory buffer designed to make sure you can still service the loan if rates rise.

At the core of any assessment is your usable income – your household’s regular salary, wages, rental income, overtime (if it is accepted at a shaded rate), and any other dependable receipts. Taxable income is the starting point, but HECS-HELP debt lowers your take-home pay directly and is treated as a non-negotiable outgoing. The same goes for child support or other regular commitments. A higher income clearly improves the maximum loan size, but it is only half the picture.

On the other side of the ledger sit expenses and debts. Existing home loan or personal loan repayments, credit card limits (not just the balance), and buy-now-pay-later arrangements all reduce your capacity. A credit card with a $10,000 limit is typically assessed as if you have drawn the full amount, regardless of the actual balance, so closing unused cards can free up room. Dependants push up the living expense benchmark the lender uses, which lowers the surplus available for a mortgage repayment. Lenders also apply a scaled estimate for groceries, utilities, transport, insurance, and entertainment, so even a modest increase in declared spending can have a meaningful effect.

The Australian Prudential Regulation Authority (APRA) requires lenders to add a serviceability buffer – a margin on top of the actual loan rate, typically 3 percentage points – to check that you could still afford repayments if interest rates increase. This buffer guards against over-borrowing but also shrinks the headline loan amount relative to your income.

In short, your maximum borrowing amount comes down to income minus tax, HECS, and living costs, minus all debt obligations, measured against a stressed interest rate. Raising your income (or adding a co-borrower), reducing credit limits, and paying down personal loans or car finance are the fastest ways to lift a lender’s estimate of how much you can borrow.

What AI Calculator does AI Calculator’s mortgage tool models these inputs to give you an indicative range based on general parameters. It is not a lender and does not offer personal financial advice. The estimate is a guide only and does not guarantee loan approval or any particular outcome. For advice that considers your full situation, speak with a licensed financial adviser or an Australian credit licensee.

Next steps Try the calculator with different blends of income, expenses, and debt to see how each factor changes the number. Small adjustments – cancelling an unused credit card or including overtime – can produce a noticeably different result, and understanding that before you approach a lender puts you in a stronger position.