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How much can I borrow for a home loan?

Here's a quick way to calculate what you can afford to borrow and repay based on your income.

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This article was fact-checked and reviewed by , an accredited and award-winning finance broker and industry mentor. Content has been updated for 2022.

When a lender looks at your mortgage application, it generally assumes about 30% of your gross income can be used to make loan repayments. Then it factors in your debt, assets and spending to forecast your borrowing power.

You can also work out a rough idea of how much you can afford to borrow by working out the following:

  • How much of a deposit can you save?
  • How much can you afford in mortgage repayments per month?

You can also put some figures into a borrowing power calculator to get a quick estimate.

Borrowing Power Calculator

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.

How to use the borrowing capacity calculator

To use Finder's borrowing power calculator just enter the following details. If you're not sure of exact figures, use your best estimate:

  • Term. This is the length of the home loan (choose 30 years 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.

How much can I afford to borrow based on my deposit?

Borrowers typically save a 10% or 20% deposit. The smaller your deposit, the more you have to borrow. And this makes your repayments more expensive. And it may limit how much you can borrow.

Here are some examples of how much you would have to borrow with different property values, plus repayments, based on a 20% deposit size.*

Property value20% depositBorrowing amountMonthly repayment
$400,000$80,000$320,000$1,264
$600,000$120,000$480,000$1,896
$800,000$160,000$640,000$2,528
$1,000,000$200,000$800,000$3,160

*We've assumed a 2.50% interest rate and a 30-year loan term.

You can use a loan repayment calculator to try similar calculations based on your needs. This will help you get a better idea of what you can afford to borrow. But how much will your lender let you borrow?

That's a different question.

How do lenders calculate how much I can borrow?

Lenders decide how much you can borrow based on what's known as serviceability calculations. These calculations take into account your income from various sources along with your expenses. Lenders then look at the proposed home loan debt as a proportion of your monthly income and build in a buffer for potential interest rate rises.

Every lender works out your borrowing capacity with its own formula, which means the amount you can borrow will vary between lenders. Their calculations will depend on things like:

To maximise your chances of getting a loan approved, or borrowing more, you should check your credit score in advance, minimise your spending in the months before applying for a loan and pay down any outstanding credit card or personal loan debts.

Read our essential tips on how to increase your borrowing capacity

How much of your salary can you afford to spend on repayments?

As a rough rule of thumb, you don't want to spend more than 30% of your income on mortgage repayments.

So a very quick way to work out what you can afford to borrow is to:

  1. Take your annual income.
  2. Work out 30% of that figure.
  3. Divide by 12 to get a monthly repayment.

Here are some quick examples:

  • $50,000 annual gross income at 30% = $1,250 per month.
  • $75,000 annual gross income at 30% = $1,875 per month.
  • $100,000 annual gross income at 30% = $2,500 per month.

How much do you currently spend on rent?

If you're a first home buyer currently renting, you can test how much you can afford to borrow using your rent as a rough commitment.

  1. Work out how much you currently spend on rent.
  2. Calculate what your monthly mortgage repayments would be with a loan amount you feel comfortable with.
  3. What's the difference? Can your bank balance handle the increased costs?

This could be an opportune time to reduce your expenses. Negotiate or shop around for savings on your utilities, memberships and subscriptions. Do you really need all of them and are you using them? Look for ways to be more mindful of unnecessary "tap and go" purchases if you are serious about saving a deposit and buying a home.

How much should I borrow?

Sometimes a lender will let you borrow much more than you feel you can comfortably repay. In some cases, a lender's estimate may be on the low side, and you might be disappointed by the maximum amount available to you.

Either way, you need to know how much you can borrow without straining your ability to repay the loan. To do this, answer the following questions:

  • Can you afford the repayments? Be honest. After looking at the amount you'd have to repay each month, can you afford it?
  • What kind of lifestyle do you want? Taking on the responsibility of a home loan could mean you'll have to curtail your spending in other areas, like eating at restaurants, spending on takeaways or online shopping. The more you borrow, the more you may have to cut back elsewhere.
  • What life changes are on the horizon? Are you planning to have children soon? Are you contemplating a break in your career? These changes could affect your income in the future and make it harder to repay a big loan.
  • Have you factored in interest rate rises? Interest rates are likely to rise during your home loan. Take your current interest rate (or an example rate) and add another 2 to it (so take 2.00% and make it 4.00%). Can you still afford the higher repayments?

Be sure to factor in all your buying and borrowing costs

Buying a home comes with so many costs that can eat into your deposit. If you don't factor these in before applying for a loan you might find your borrowing power gets much smaller.

  • Stamp duty. This is the tax charged by your state or territory government on buying a property. It can cost you tens of thousands. If you're buying an expensive home in a city like Sydney, stamp duty can run to $50,000 or more.
  • Lenders mortgage insurance (LMI). You only pay this when your deposit is less than 20% of your property's value. But it can be quite expensive, running to thousands or even tens of thousands of dollars. Luckily, it's possible to borrow LMI costs along with your loan, which means you don't have to sacrifice part of your deposit to pay for it.
  • Conveyancer's fees. You need a conveyancer to check your contract of sale and make sure the property transaction goes smoothly. You normally pay over $1,000 for this.
  • Other costs. Don't forget about building and pest inspections, home and contents insurance, and loan fees. It all adds up.

More questions about how much you can borrow for a home loan

Check out these home loan offers and apply today

1 - 20 of 22
$
years
Name Product Interest Rate (p.a.) Comp. Rate p.a. Fees Monthly Payment

loans.com.au Smart Booster Discount Variable Home Loan P&IHome≥ 20% Deposit

loans.com.au Smart Booster Discount Variable Home Loan
2.60%
2.96%
  • App: $0
  • Ongoing: $0 p.a.
$602
Get a low discounted variable rate loan. Requires a 20% deposit. Get your loan processed fast and settle within 30 days.

Unloan Variable Home Loan P&IHome≥ 20% Deposit Refinancers only

Unloan Variable Home Loan
2.64%
2.56%
  • App: $0
  • Ongoing: $0 p.a.
$605
A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.

Ubank Neat Variable Home Loan P&IHome≥ 40% Deposit

Ubank Neat Variable Home Loan
2.64%
2.65%
  • App: $0
  • Ongoing: $0 p.a.
$605
Get flexibility and the option to make unlimited extra repayments with this variable rate loan.

IMB Budget Home Loan P&IHome≥ 20% Deposit

IMB Budget Home Loan
2.84%
2.85%
  • App: $449
  • Ongoing: $0 p.a.
$621
A low-rate, no-frills home loan for borrowers with a good deposit and unrestricted repayments. $0 application fee for eligible borrowers with principal-and-interest repayments and deposits of at least 20%.

Macquarie Bank Basic Home Loan P&IHome≥ 40% Deposit

Macquarie Bank Basic Home Loan
2.84%
2.84%
  • App: $0
  • Ongoing: $0 p.a.
$621
This flexible variable rate loan requires a 40% deposit or equity. Get fast online approval and $0 application fee and $0 ongoing fees.

HSBC Home Value Loan P&IHome≥ 30% Deposit

HSBC Home Value Loan
2.77%
2.78%
  • App: $0
  • Ongoing: $0 p.a.
$616
$3,288 refinance cashback offer
This competitive variable rate loan is available for borrowers with 30% deposits. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

Greater Bank Great Rate Discount Variable with Family Pledge Home Loan P&IHome≥ -10% Deposit

Greater Bank Great Rate Discount Variable with Family Pledge Home Loan
2.79%
2.80%
  • App: $0
  • Ongoing: $0 p.a.
$617
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, QLD and ACT only.

Newcastle Permanent Building Society Real Deal Home Loan P&IHome≥ 20% Deposit

Newcastle Permanent Building Society Real Deal Home Loan
2.87%
2.91%
  • App: $595
  • Ongoing: $0 p.a.
$624
Get up to $3,000 refinance cashback when your LVR is 90% or lower ($2,000 cashback for loan amounts of $250K+ and above, $3,000 for $500K+). Other conditions apply. This variable rate loan requires a 20% deposit and has an offset account.

loans.com.au Smart Booster Discount Variable Home Loan P&IHome≥ 20% Deposit

loans.com.au Smart Booster Discount Variable Home Loan
2.74%
3.22%
  • App: $0
  • Ongoing: $0 p.a.
$613
Home buyers can get a very low discounted variable rate for the first year. Requires a 20% deposit. Add an offset sub-account for an additional 0.10% on your interest rate. Get your loan processed fast and settle within 30 days.

Unloan Variable Home Loan P&IInvestment≥ 20% Deposit Refinancers only

Unloan Variable Home Loan
2.94%
2.86%
  • App: $0
  • Ongoing: $0 p.a.
$629
Investors can get a low variable rate. Apply online and get fast approval. Backed by the Commonwealth Bank.

Ubank Neat Variable Home Loan P&IHome≥ 20% Deposit

Ubank Neat Variable Home Loan
2.84%
2.86%
  • App: $0
  • Ongoing: $0 p.a.
$621
A competitive variable rate loan that comes with a 100% offset account. 20% deposit required.

Macquarie Bank Basic Fixed Home Loan P&IHome 3Y Fixed≥ 30% Deposit

Macquarie Bank Basic Fixed Home Loan
6.05%
3.65%
  • App: $0
  • Ongoing: $0 p.a.
$906
Get a variable rate mortgage with flexible, basic features. $0 application fee and $0 ongoing fees. Requires a 30% deposit. Apply online and get fast approval.

OneTwo Variable Rate Home Loan P&IHome≥ 20% Deposit Refi Only

OneTwo Variable Rate Home Loan
2.59%
2.49%
  • App: $0
  • Ongoing: $0 per month
$601
$5,000 refinance cashback.
A variable rate loan for owner-occupier refinancers living in NSW, VIC, QLD or SA metro and inner regional areas. Get an extra 0.15% off your rate as you repay the loan and get up to $2,500 in bonus payments. Terms and conditions apply.

Newcastle Permanent Building Society Real Deal Home Loan P&IInvestment≥ 20% Deposit

Newcastle Permanent Building Society Real Deal Home Loan
3.07%
3.11%
  • App: $595
  • Ongoing: $0 p.a.
$640
A competitive variable rate investor loan. 20% deposit required. Get up to $3,000 refinance cashback when your LVR is 90% or lower ($2,000 cashback for loan amounts of $250K+ and above, $3,000 for $500K+). Other conditions apply.

Newcastle Permanent Building Society Fixed Rate Home Loan P&IHome 2Y Fixed≥ 20% Deposit

Newcastle Permanent Building Society Fixed Rate Home Loan
4.39%
4.93%
  • App: $0
  • Ongoing: $0 p.a.
$752
Owner-occupiers can lock in this rate for 2 years with no ongoing fees. Get up to $3,000 refinance cashback when your LVR is 90% or lower ($2,000 cashback for loan amounts of $250K+ and above, $3,000 for $500K+). Other conditions apply.

HSBC Home Value Loan P&IInvestment≥ 30% Deposit

HSBC Home Value Loan
2.92%
2.93%
  • App: $0
  • Ongoing: $0 p.a.
$628
$3,288 refinance cashback offer
This variable rate loan is available for property investors with 30% deposits. This loan has very few fees. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.

loans.com.au Green Home Loan P&IHome≥ 10% Deposit

loans.com.au Green Home Loan
2.63%
3.05%
  • App: $0
  • Ongoing: $0 p.a.
$604
This loan is only available for borrowers buying a property with a NatHERS energy efficiency rating of 7.0 or higher. Buying a green home? Get a competitive, discounted variable rate and borrow up to 90%.

Macquarie Bank Offset Home Loan Package P&IHome≥ 40% Deposit

Macquarie Bank Offset Home Loan Package
2.84%
3.11%
  • App: $0
  • Ongoing: $248 p.a.
$621
A variable rate loan for borrowers with 40% deposits or refinancers with equity in their properties. This loan has an offset account. Fast online application. $0 application fee and $0 ongoing fees.

Macquarie Bank Basic Fixed Home Loan P&IHome 3Y Fixed≥ 20% Deposit

Macquarie Bank Basic Fixed Home Loan
6.09%
3.70%
  • App: $0
  • Ongoing: $0 p.a.
$909
Basic fixed rate home loan. Fast online application. $0 application fee and $0 ongoing fees.

HSBC Home Value Loan P&IHome≥ 10% Deposit

HSBC Home Value Loan
2.87%
2.88%
  • App: $0
  • Ongoing: $0 p.a.
$624
$3,288 refinance cashback offer
A competitive value home loan with no ongoing fee. Eligible refinancers borrowing $250,000 or more can get a $3,288 cashback. Terms and conditions apply.
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