Borrowing Power Calculator
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This calculator uses HEM (Household Expenditure Measure) benchmarks and standard APRA serviceability methodology to provide a general estimate. Actual borrowing capacity depends on lender policies, credit history, employment type, and individual circumstances. This does not constitute financial advice. Rovo Finance (NJ IT PTY LTD ABN 67 654 854 378) CCR 570633 of Broker ACL Pty Ltd ACN 681 761 375 (ACL 563763).
How much can I borrow in Australia?
Before you start looking at properties, knowing your borrowing power is the single most important step in your home loan journey. Your borrowing capacity determines the price range you can realistically shop in — and getting this figure right from the start prevents the disappointment of falling in love with a property you cannot finance.
The Rovo Finance borrowing power calculator uses the same serviceability principles applied by Australian lenders — including the mandatory 3% interest rate buffer required by APRA. Enter your income, monthly expenses, existing debts, and number of dependants to receive an instant estimate of your borrowing capacity, along with a conservative-to-maximum range so you understand the full picture.
Use the applicant type tabs to switch between single applicant, joint applicants, property investor (adds rental income), and SMSF borrowing scenarios. Each tab loads the right income fields for your situation.
How Australian lenders calculate your borrowing capacity
Every lender in Australia uses a serviceability assessment to determine how much you can borrow. While policies vary between lenders, all follow the same fundamental framework:
1. Gross income
Lenders include salary, wages, overtime (if regular), rental income (typically at 80%), government benefits, and in some cases investment income. PAYG employees have income assessed at 100%; self-employed borrowers are typically assessed on a 2-year average of their tax returns.
2. The 3% interest rate buffer
Since 2021, APRA requires all Australian lenders to assess your ability to repay at your actual interest rate plus 3% — or a floor rate of 5.5%, whichever is higher. This means if your actual rate is 6.25%, lenders test your repayments at 9.25%. Our calculator defaults to 9% to reflect this.
3. Monthly commitments
All existing debt repayments reduce your borrowing power — car loans, personal loans, HECS/HELP debt, and credit card limits (lenders use 3% of your total credit limit as a monthly commitment, regardless of your actual balance). Closing unused credit cards before applying can meaningfully increase your borrowing capacity.
4. Living expenses & dependants
Lenders use the Household Expenditure Measure (HEM) as a minimum living expense benchmark. Declaring expenses below HEM benchmarks is now scrutinised closely post-Royal Commission. Each dependant adds a further monthly allowance that reduces available surplus. Our calculator applies HEM-aligned estimates per dependant.
Borrowing power by buyer type
First home buyers
First home buyers often have simpler income and expense profiles, which can actually work in their favour for serviceability. The First Home Guarantee Scheme allows eligible buyers to borrow with just 5% deposit without paying LMI — but your borrowing power is still determined by income and serviceability, not deposit size. Our calculator shows your maximum loan amount; our repayment calculator shows what repayments look like at that amount.
Property investors
Investors can include rental income in their borrowing calculation — typically at 80% of gross rent to account for vacancies, management fees, and maintenance. However, investors are also assessed on their full existing loan commitments across the portfolio. Many investors can access more borrowing capacity than they realise by structuring loans across multiple lenders. Select the “Property investor” tab to include your rental income in the calculation.
SMSF borrowing
SMSF loans (Limited Recourse Borrowing Arrangements) are assessed differently to personal lending. Lenders assess the SMSF’s rental income, fund contributions, and sometimes members’ personal income depending on the lender’s policy. SMSF loans typically require a 20–30% deposit and carry higher rates. A Rovo Finance SMSF loan specialist can provide a precise borrowing capacity based on your fund’s specific circumstances.