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.
Frequently asked questions
How much can I borrow for a home loan in Australia? +
As a general rule, most Australian lenders will allow you to borrow approximately 4–6 times your gross annual income, subject to serviceability. A single person earning $95,000 per year with modest expenses and no dependants can typically borrow between $480,000 and $620,000 depending on the lender. A couple earning a combined $170,000 could borrow $850,000 to $1,100,000 with the right lender and loan structure. The exact figure depends on your expenses, existing debts, credit card limits, number of dependants, deposit size, and which lender you apply with. Use our calculator for a personalised estimate based on your actual numbers.
How much deposit do I need for my first home in Australia? +
The standard deposit required by most lenders is 20% of the property value to avoid Lenders Mortgage Insurance (LMI). However, eligible first home buyers can purchase with as little as 5% deposit through the First Home Guarantee Scheme — the government guarantees the remaining 15%, meaning you pay no LMI. For a $750,000 property, that means a $37,500 deposit instead of $150,000. Income caps apply ($125,000 singles, $200,000 couples in 2026). Your borrowing power determines the maximum you can borrow; your deposit determines how much of the purchase price you need to fund yourself. Both numbers matter — use our repayment calculator alongside this borrowing power calculator to get the full picture.
Why do lenders add a 3% buffer to my interest rate? +
The 3% serviceability buffer is an APRA requirement introduced to ensure borrowers can still afford their repayments if interest rates rise after they take out their loan. All Australian lenders must assess your ability to repay at your actual interest rate plus 3%. This means if you borrow at 6.25%, lenders test you at 9.25%. This buffer significantly reduces your maximum borrowing amount compared to what you would qualify for if tested at the actual rate. While this can feel frustrating when you are trying to maximise your budget, it also protects you from financial stress if rates increase. Some non-bank lenders assess at lower floor rates, which can increase borrowing capacity — a Rovo Finance broker can advise on lenders with more flexible assessment policies.
Does having credit cards reduce how much I can borrow? +
Yes — significantly. Australian lenders assess 3% of your total credit card limit as a monthly commitment, regardless of your actual balance. A $10,000 credit card limit is treated as $300 per month in ongoing commitments. At a 9% assessment rate over 30 years, that $300 per month reduces your borrowing power by approximately $34,000. If you have $30,000 in total credit card limits, that could be reducing your borrowing power by over $100,000. Closing unused credit cards before applying for a home loan is one of the quickest ways to increase your borrowing capacity. Cancel them 2–3 months before you apply so the reduced limits are reflected in your credit file.
How many investment properties can I finance in Australia? +
There is no legal cap on how many investment properties you can finance. Your practical limit is determined by your cumulative serviceability across all properties — total rental income versus total loan repayments, living costs, and other debts. Most major banks become increasingly conservative as your portfolio grows, often capping at 4–6 properties. Non-bank and specialist investment lenders have more flexible policies for growing portfolios. A common strategy is to spread lending across multiple lenders — using bank A for properties 1 and 2, bank B for 3 and 4, and so on. A Rovo Finance investment loan broker can help structure your portfolio to maximise your total borrowing capacity across lenders.
Can my SMSF borrow to buy property? +
Yes — SMSFs can borrow to purchase investment property through a Limited Recourse Borrowing Arrangement (LRBA). The property must satisfy the sole purpose test (held for retirement benefit), cannot be residential property purchased from or used by a related party, and must be a single acquirable asset. SMSF loans typically require a 20–30% deposit and higher interest rates than standard investment loans. Lenders assess the SMSF's ability to service the loan based on rental income, concessional contributions, and sometimes members' personal income. Our calculator's SMSF tab gives a general estimate — for a precise assessment of your fund's borrowing capacity, speak with a Rovo Finance SMSF loan specialist.
How accurate is this borrowing power calculator? +
Our calculator applies standard serviceability methodology — gross income, a 3% APRA buffer, monthly expense deductions, credit card commitments, and dependant allowances — and provides a reliable general estimate for most PAYG employees. Your actual borrowing capacity may differ because: different lenders have different HEM benchmarks and expense floors; some lenders treat certain income types more generously (overtime, bonuses, rental income); self-employed income is assessed differently (typically 2-year average net profit); and credit history plays a role independent of income. The estimate is most useful for understanding your approximate price range. For a precise pre-approval amount, contact a Rovo Finance broker who can assess your situation across multiple lenders simultaneously.