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.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

Finder logo checkmark
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 - 18 of 18
$
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
2.10%
2.46%
  • App: $0
  • Ongoing: $0 p.a.
$564
Get a low discounted variable rate loan. Requires a 20% deposit. Get your loan processed fast and settle within 30 days.

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

Ubank Neat Variable Home Loan
1.89%
1.90%
  • App: $0
  • Ongoing: $0 p.a.
$548
Get flexibility and the option to make unlimited extra repayments with this variable rate loan.

Nano Variable Home Loans P&IHome≥ 20% Deposit

Nano Variable Home Loans
2.24%
2.24%
  • App: $0
  • Ongoing: $0 p.a.
$574
Competitive rate with zero fees, fast approval and a 100% free offset account. Available for refinancers and existing buyers purchasing their next home. 20% deposit required.

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
2.19%
2.20%
  • App: $0
  • Ongoing: $0 p.a.
$570
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.

IMB Budget Home Loan P&IHome≥ 20% Deposit

IMB Budget Home Loan
2.34%
2.35%
  • App: $449
  • Ongoing: $0 p.a.
$582
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
2.39%
2.39%
  • App: $0
  • Ongoing: $0 p.a.
$586
Apply for the Macquarie Bank Basic Home Loan - LVR ≤ 60% (Owner Occupier, P&I) and get a flexible variable interest rate, plus no application and ongoing fees. Requires a 40% deposit.

HSBC Home Value Loan P&IHome≥ 30% Deposit

HSBC Home Value Loan
2.52%
2.53%
  • App: $0
  • Ongoing: $0 p.a.
$596
$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.

Athena Variable Home Loan P&IHome≥ 40% Deposit

Athena Variable Home  Loan
2.14%
2.14%
  • App: $0
  • Ongoing: $0 p.a.
$567
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.

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

OneTwo Variable Rate Home Loan
2.09%
1.99%
  • App: $0
  • Ongoing: $0 per month
$563
$5,000 refinance cashback.
A variable rate loan for owner-occupier refinancers living in NSW, VIC 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.

G&C Mutual Bank Momentum Home Loan P&IHome≥ 40% Deposit

G&C Mutual Bank Momentum Home Loan
2.24%
2.26%
  • App: $0
  • Ongoing: $0 p.a.
$574
A variable rate loan for owner-occupiers looking to refinance. This loan has low fees and a 100% offset account.

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

Newcastle Permanent Building Society Real Deal Home Loan
2.37%
2.41%
  • App: $595
  • Ongoing: $0 p.a.
$584
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.

homeloans.com.au Low Rate Home Loan with Offset P&IHome≥ 40% Deposit

homeloans.com.au Low Rate Home Loan with Offset
2.14%
2.14%
  • App: $0
  • Ongoing: $0 p.a.
$567
A competitive rate with no application or ongoing fees. This loan is not available for construction.

Ubank Own Home Loan Fixed P&IHome 1Y Fixed≥ 20% Deposit

Ubank Own Home Loan Fixed
2.99%
2.50%
  • App: $0
  • Ongoing: $250 p.a.
$633
Fix to this very competitive rate for one year. This loan requires a 20% deposit. This loan reverts to a variable rate once the fixed period ends, based on your LVR.

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

loans.com.au Smart Booster Discount Variable Home Loan
2.24%
2.72%
  • App: $0
  • Ongoing: $0 p.a.
$574
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.

G&C Mutual Bank Fixed Rate Home Loan P&IHome 1Y Fixed≥ 5% Deposit

G&C Mutual Bank Fixed Rate Home Loan
3.19%
3.25%
  • App: $500
  • Ongoing: $0 p.a.
$649
Lock in a sharp rate for the first year. Available with a 5% deposit.

Nano Variable Home Loans P&IInvestment≥ 20% Deposit

Nano Variable Home Loans
2.54%
2.54%
  • App: $0
  • Ongoing: $0 p.a.
$597
Investors can get this no-fee variable rate loan. You will need a 20% deposit. Fast online approval. Available for refinancers and existing buyers purchasing their next property.

G&C Mutual Bank Choice Home Loan P&IHome≥ 5% Deposit

G&C Mutual Bank Choice Home Loan
2.74%
2.76%
  • App: $0
  • Ongoing: $0 p.a.
$613
A low variable rate loan for home buyers with unlimited extra repayments and redraw. No ongoing fees. Add an offset account for an extra 0.10% on your interest rate.

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

Macquarie Bank Basic Fixed Home Loan
4.79%
3.02%
  • App: $0
  • Ongoing: $0 p.a.
$788
Get a variable rate mortgage with flexible, basic features. No application or ongoing fees. Requires a 30% deposit. Refinancers can switch with a convenient digital application.
loading

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details and get a free consultation with an expert broker from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2020 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

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.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 8 years running (2013-2020)

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site