Borrowing capacity calculator

An estimate of what a serviceability test tends to produce from income, expenses, debts and a 3 percentage point buffer. Education, not a credit offer.

Status: The 3 percentage point serviceability buffer is APRA's expectation, read on its page on 16 September 2026; the 6% floor, the expense benchmark and the credit-card allowance are this calculator's own assumptions, described on the page. Whether a calculator that takes a household's own figures stays general information is Omid Komeili's item 1; the page stays unindexed until he has answered.

Last updated 16 September 2026 · data vintage ATO resident tax rates for 2026-27; household expenditure benchmark and assessment buffer as described on the page, checked 6 September 2026 · draft — awaiting review

Lenders do not lend against what you earn. They lend against what is left after tax, living expenses and existing commitments, tested at an interest rate higher than the one you would actually pay. This calculator reproduces that test in outline, so the number it gives is the shape of a lender's answer rather than any one lender's answer.

How the calculator works

From gross annual income for one or two applicants it deducts income tax, the low income tax offset and the Medicare levy at 2% (the low-income reduction is approximated), to arrive at net monthly income. It then deducts living expenses, using the larger of the figure you enter and a household expenditure benchmark that scales with income and dependants; existing loan repayments; and a monthly allowance for credit card limits, since lenders commonly assess the limit rather than the balance. The monthly surplus that remains is converted to a loan amount at the assessment rate, which is your interest rate plus 3 percentage points, with a floor of 6%, which is this calculator's own assumption (lenders set their own floor rates).

The result is shown as a range. The conservative end is 15% below the central figure and the optimistic end 10% above it, because lenders differ in how they treat income types, expenses and buffers.

Worked examples

Computed by the same code, at a 6% interest rate over 30 years, with no existing repayments and no declared expenses above the benchmark.

Household	Indicative maximum	Conservative end	Assessment rate
One income of $90,000, no debts	$490,043	$416,537	9%
One income of $120,000, a $10,000 card limit	$679,615	$577,672	9%
Two incomes of $95,000 and $70,000, one dependant	$838,530	$712,750	9%

ATO resident income tax (incl. Medicare & LITO) — FY2026–27 rates (15% bracket from 1 Jul 2026).

What the calculator does not know

It does not know your credit history, your employment type, whether your income is base salary, bonus, overtime or self-employed profit, or how a particular lender shades each of those. It does not know the property, and lenders do treat some properties and postcodes differently. The household expenditure benchmark it uses is an approximation of the industry measures lenders apply, not a published schedule. None of this is a pre-approval, and a lender's figure can be materially higher or lower.

Where the report fits

Borrowing capacity is the ceiling on what you can pay. The report is about what a specific property is worth against recorded sales, which is a different question and often a lower number. Knowing both before you offer is the point: the ceiling tells you what you can do, the range tells you what the evidence supports.

Sources

APRA, loan serviceability expectations (the 3 percentage point buffer) — checked 16 September 2026. Read on the page 16 September 2026: APRA expects lenders to assess a new borrower's ability to repay at an interest rate at least 3 percentage points above the loan rate; it sets no floor rate.

Australian Taxation Office, tax rates for Australian residents (2026-27) — checked 6 September 2026. Snippet-verified from this build environment; the 15% rate on $18,201 to $45,000 applies from 1 July 2026.

Last updated 16 September 2026 · awaiting review.

Where the report fits

A Property Decision Report does this work for one property you're weighing up: the fair-value range built from recorded comparable sales, where the asking price sits against it, the vendor and agent read, the risks that matter, and your opening, target and walk-away numbers, in writing, within 24 hours.

Every pack is the same full report; only the number of properties changes. $249 for three properties, $349 for five.