How much can I borrow with a home loan?
Use our home loan borrowing power calculator to estimate how much you may be able to borrow based on your income, expenses, loan term, and interest rate.
Note that our calculator can only offer an estimate. It doesn't take into account specific factors used by individual lenders in determining their own lending criteria.
Calculate your estimated borrowing power
What is borrowing power?
Borrowing power refers to the maximum amount of money you can borrow from a lender based on your current financial situation. Ideally, you should be able to take on this loan amount without facing financial hardship.
How is borrowing power calculated?
Your borrowing power isn't based on your income alone. Lenders assess your overall financial position to estimate how much you can comfortably afford to repay, and it’s calculated using a few different factors:
- Your income before tax, including your base salary, bonuses, and other regular income (like rental income and dividends from investments)
- Your living expenses, like household bills, groceries, and transport costs, as well as any dependents you have
- Your existing debts and combined credit limits, like from a personal loan, BNPL account, HECS-HELP loans, or credit cards
- The interest rate, term, and other details of the loan you’re interested in
- The serviceability buffer, which requires banks to consider your ability to repay a loan at an interest rate that’s 3% higher than its advertised rate to make sure you can handle potential rate rises without falling into mortgage stress
Borrowing power examples based on salary
To give you a general idea of how borrowing power can vary, Canstar Research has modelled a range of income scenarios using common lending assumptions (broadly based on the factors explained above). These examples are estimates only and don't reflect every lender's assessment criteria.
Gross income | Annual expenses | Borrowing capacity (6.26% p.a., 30-years) | Property value w/ 20% deposit | Monthly repayments | Monthly repayments as % of gross income |
|---|---|---|---|---|---|
Single Income… | |||||
$50,000 | $20,000 | $155,500 | $194,000 | $958 | 23% |
$75,000 | $25,000 | $246,600 | $308,000 | $1,520 | 24.3% |
$100,000 | $30,000 | $337,700 | $422,000 | $2,081 | 25% |
$125,000 | $35,000 | $428,800 | $536,000 | $2,643 | 25.4% |
Joint Income… | |||||
$50,000 x2 | $30,000 | $412,300 | $515,000 | $2,541 | 30.5% |
$75,000 x2 | $37,500 | $619,700 | $774,000 | $3,820 | 30.6% |
$100,000 x2 | $45,000 | $827,200 | $1,034,000 | $5,099 | 30.6% |
$125,000 x2 | $52,500 | $1,034,700 | $1,293,000 | $6,378 | 30.6% |
Source: www.canstar.com.au - 22/06/2026. Interest rate of 6.26% based on RBA Lenders' Rates (Apr-26) of 5.51% for new, owner-occupier variable loans from all institutions in Jan-26, with an additional 0.75% to account for cash rate increases. Gross income and annual expenses based on chosen amounts. Borrowing power calculations assume a loan term of 30 years, 80% of income available to service the loan, and a 3% interest rate buffer. Tax calculations based on the 2025-26 Financial Year, excluding Medicare Levy.
As the table above shows, if you’re on a single annual income of $100,000, you might be able to borrow $337,700. Assuming you had a 20% deposit, that would mean you could potentially buy a property worth about $422,000.
A couple with a combined income of $150,000 may afford to borrow about $619,700, and assuming that they have a 20% deposit saved up, they could potentially buy a home worth about $774,000.
How can I increase my borrowing power?
If you’re looking to increase your borrowing power, think about:
- Paying down your debts like outstanding personal loan balances or closing off credit cards you don’t regularly use.
- Reducing your credit limits, as lenders consider all of your limits together regardless of the products.
- Cutting back on your household expenses where possible. If you’re looking to save, Canstar can help you compare energy plans (electricity, gas, and solar), car insurance, home internet and mobile plans, private health insurance, and more!
- Building good savings habits, as this can show lenders that you’re financially disciplined and can actively make your repayments in the future.
- Comparing the interest rates on offer from a wide range of lenders. Generally speaking, the lower your potential interest rate, the more borrowing power you’ll likely have. You can compare home loans with Canstar.
- Opting for a longer loan term, like a 30-year mortgage rather than a 25-year one. While this can lower your repayments and boost your borrowing power, it can also increase the amount of interest you’ll pay overall.
- Checking your credit score regularly, as lenders use your score to determine how trustworthy you are as a borrower. You can check your credit score for free with Canstar or via the Canstar App.
- Increasing your income, if possible.
- Finding a co-borrower, as two people will generally have more borrowing power than one.
- Applying with a loan guarantor. A home loan guarantor, usually a parent or relative, agrees to make repayments on your behalf if you find yourself unable to.
Does having a guarantor increase your borrowing power?
Having a guarantor on your home loan might not directly increase your borrowing power, but it can minimise other costs and potentially help you afford a pricier property.
A guarantor can reduce your risk of default as they’re agreeing to take on your financial obligation if you cannot make your repayments. This makes your loan less risky for your lender and you might be able to secure a lower interest rate, which could boost your borrowing power.
It may also help you avoid paying Lenders Mortgage Insurance (LMI). LMI is usually charged as an upfront premium if you have a deposit less than 20% of the value of the property you’re buying. It can potentially cost thousands to tens of thousands of dollars and is often rolled into the mortgage. That means, by avoiding the cost, a larger portion of the borrowed funds could go towards the property being bought.
Being a guarantor presents a financial risk, so it’s important you discuss this with your potential guarantor before they sign up.
How does HECS affect my borrowing power?
HECS-HELP student debt can affect your take-home pay, which might reduce your borrowing power.
While your student debt may lower your borrowing power, rushing to pay it off at the expense of building your deposit might not prove helpful, especially if it results in you having to pay LMI. If you only have a low balance or are close to paying it off, however, you may find some lenders exclude this debt from their calculations.
Can I increase my borrowing power by choosing interest-only repayments?
Starting your loan with interest-only repayments won’t increase your borrowing power. In fact, it’ll often lower it. This is because lenders look at the total loan term when determining your borrowing power.
For example, if you opt for interest-only repayments for the first two years on a 25-year mortgage, the lender will need to determine whether you can comfortably pay off the principal (the original loan amount) plus interest over the remaining 23 years. This often results in higher repayment amounts during this period.
Lenders also generally view interest-only repayment structures as higher risk, meaning they may only offer higher rates on these products (again lowering your borrowing power).
How accurate is a borrowing power calculator?
A borrowing power calculator is a useful tool to help estimate how much you might be able to borrow, but it shouldn't be taken as a guarantee that you'll be approved for that amount.
Lenders use their own lending policies and assessment criteria when deciding how much they're prepared to lend you, and these criteria often differ between lenders. While borrowing power calculators consider important factors such as your income, expenses, existing debts, and the loan details you enter, they can't account for every aspect of a lender's detailed assessment.
For this reason, the amount shown by a borrowing power calculator should be treated as a guide only. Your actual borrowing capacity may be higher or lower depending on the lender you apply with and your individual circumstances.
