Borrowing capacity calculator
Get an estimate of how much you can borrow before you apply for a home loan.
Updated . What changed?
We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.
Finder's borrowing capacity calculator can give you a quick estimate of how much you can borrow for your home loan. Just enter a few details about your income, debts and expenses, plus information about your home loan.
You probably don't have a home loan yet, so just put in a hypothetical interest rate and loan amount based on your own borrowing situation. If you need a clearer idea of current home loan interest rates then check out the rates in the table below the calculator.
To use this calculator you can input a loan term (30 years is the most common choice), your income and select single or joint application depending on whether you are applying as a couple or not. You can input your spending in the expenses fields (just use the other loans field).
Please note that this calculator provides very rough estimates and Finder is not a mortgage lender. It's a good idea to use multiple borrowing power calculators to get a better understanding of what you might be able to borrow. And if you need more help you can also talk to a professional mortgage broker.
Check out some up-to-date home loan rates
After entering your details a mortgage broker from Aussie will call you. They will discuss your situation and help you find a suitable loan.
- A comparison of home loans from multiple lenders.
- Expert guidance through the entire application process.
- Free suburb and property reports.
The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)
How to use the borrowing capacity calculator
Finder's borrowing power calculator is very easy to use. Just enter the following details, and if you're not sure just put in an estimate:
- Term. This is the length of the home loan. Most people pick between 25 and 30 years (choose 30 if you're not sure about this for now).
- Interest rate. The home loan interest rate determines your repayment costs. If you're not sure, pick a rate from the loans table on this page.
- Application type. Pick single application if you're on your own and joint if you're applying as a couple.
- Income. The calculator asks for gross income, meaning how much you earn before tax and other expenses.
- Expenses. Put in an estimate of your monthly debt payments. There's no expenses field but you can put an estimate of your monthly spending in the "other loans" field.
- Dependents. If you have any children under the age of 18 put the number of children in this field.
The result includes an estimate of how much a lender may be willing to lend you, plus a breakdown of what that looks like as monthly repayments. And then it gives you the total interest you will end up paying on top of the loan amount itself.
How much can I borrow and how big should my deposit be?
Your deposit size is an important factor in determining your actual borrowing power, depending on how a lender calculates borrowing capacity.
Having a larger deposit relative to the amount you can borrow helps your chances of getting a loan approved. However, many lenders will approve your loan if you have just a 5% deposit saved.
But if you can save up to 20% you will be in a better position to borrow money. Borrowers with low deposit home loans (under 20%) usually have to pay lenders mortgage insurance, which can add thousands to their borrowing costs.
Remember that you also need to account for other costs when purchasing a home, which can include:
Can I boost my borrowing capacity?
You should never try to borrow more than you can comfortably afford to repay. But every lender has their own idea of how much money they can lend you. So taking some simple steps to increase your borrowing capacity is not a bad idea.
Here are some quick tips:
- Save a bigger deposit. The more you have saved the stronger your position. A good savings history will also tell a potential lender that you're likely to be able to keep up with regular repayments. If you're a first home buyer you may be entitled to the First Home Owners Grant (FHOG) which can form part of your deposit.
- Sort out your debts before applying. Debts count against your borrowing power, especially high-interest debts. You don't need to instantly pay off all your debts (you don't want to deplete your deposit savings) but making regular repayments to reduce them is essential.
- Cut back on your spending. A few months of careful spending will make you a stronger applicant. Draw up a budget and examine areas where you can cut back.
- Talk to multiple lenders. Every lender will give you a different borrowing power estimate and it's wise to look at multiple options (don't apply, just enquire).
I've got a good sense of my borrowing power - what's my next step?
Once you have a clear idea of your borrowing capacity it's time to look at your deposit, start searching for properties and research your home loan options.
The home buying process is unique for every buyer. The steps below can guide you but you don't have to follow them in any strict order. For example, you may already have decided on your lender or saved your deposit.
- Work out your budget. With a clear idea of your borrowing power you can determine a realistic borrowing amount for you (even if a lender says they'll lend you $900,000 you may not be prepared to spend anywhere near that much). Think about how big your deposit can realistically be and factor in other costs like stamp duty.
- Your deposit. Building a deposit is the key to getting a loan. You can get a home loan with a low deposit (at least a 5% deposit), though 20% is better. Your deposit, along with your borrowing power, ultimately determine your loan size.
- Property search. With your price range and deposit in mind you can start looking for properties with a more accurate sense of what's realistic for you. Narrow down your suburbs and the type of property you're looking for. Go online to see listings, track sales in a property search app and start going to open inspections to see places for yourself.
- Compare mortgages. You always want a loan with a low interest rate. And you need to decide whether you're looking for a fixed rate or a variable rate loan. It's worth looking at several lenders before applying with one (some lenders may be reluctant to lend in certain postcodes if you're buying a unit, for example).
If you need more help getting a home loan you can also have a free chat with a professional mortgage broker.
Do lenders publish their borrowing capacity calculation methods?
Every lender calculates things like your expenses differently, although they often use the same basic method. This means every lender gives you a different borrowing amount when you use their calculators.
Unfortunately banks keep their lending criteria a secret from borrowers. This means that while some borrowers can qualify for a loan, other borrowers might not qualify, even though they might look as promising as the other candidate.
Will my credit score affect my borrowing power?
One factor that isn't captured in a borrowing capacity calculator is your credit score. But when it comes to the application then your lender will look at this too. That's why it's a good idea to check your credit score before you apply.
What do I need in order to actually apply for a home loan?
Once you reach the home loan application stage you will need to gather some information about yourself, your finances and the property you are buying. You can check out our detailed guide on preparing home loan application documents, but in general you will need:
- ID documents
- Recent bank statements or other proof of income
- The address of the property you're buying
- Information about your assets and debts
More guides on Finder
Finder Daily Deals: The 5 best online deals in Australia today
Today's best online deals in Australia, hand-picked by Finder's shopping experts.
Sarah Megginson joins Finder to lead home loan editorial strategy
Highly regarded journalist and industry heavyweight Sarah Megginson has joined Finder, Australia’s most visited comparison site, to oversee the editorial strategy for its home loans vertical.
Investment loans almost halved in cost since COVID-19
While COVID-19 has delivered a number of economic challenges, there is one area where Australians have benefits – with investment loans now cheaper than they've ever been.
Refinancing avalanche: Australians to save $389 million
Christmas might be coming early for thousands of borrowers with a home loan, according to Finder, Australia’s most visited comparison site.
Principal and interest home loans
Read Finder's guide to understanding principal and interest home loans.
A guide to installing a new carpet or replacing an old carpet in your home.
How to save for a house deposit while still paying rent
SPONSORED: Saving enough for a house deposit while you're paying rent is challenging, but it can be done.
Go for something a little less traditional with stylish bamboo flooring.
A splashback is a must-have feature in any modern kitchen.
Pepper Money No Fee Personal Loan Review
Find out more about Pepper Money's no fee personal loan and benefit from a competitive rate from 6.95% p.a., zero fees and loan terms of up to 7 years.
Home Loan OffersImportant Information*
Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).
A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.
Take advantage of a low-fee mortgage with a special interest rate of just 2.49% p.a. and a 2.49% p.a. comparison rate.
Ask an Expert