Home loan eligibility calculator
Calculate the amount you can borrow and how much your loan repayments will be, without having to step inside a bank or applying for a loan.
Key takeaways
- Use the calculator below to input details about your income, expenses, outstanding debt and the interest rate of the mortgage you’re interested in.
- This lets you estimate how much you could borrow and what your monthly or fortnightly repayments would be.
- Keep in mind your actual borrowing power depends on your lender and many other factors. You can use a bank's borrowing power calculator too.
How to use Finder's eligibility calculator
Enter these details into the calculator (or put in estimates) to get an idea of your eligibility:
- Your loan term (usually this is 30 years).
- Interest rate.
- Application type (if you're a single or joint borrower).
- Your income (before tax).
- Expenses. Estimate how much you spend each month.
- Credit information. Enter any loan repayments and the limit on your credit cards (combined).
While it's impossible to use a calculator to see if you're eligible for a home loan, it's important to use tools such as a borrowing power calculator to see if your income, debts and liabilities would enable you to pay off a home loan.
If you also take into account the eligibility criteria offered by most banks, you could have a fairly good idea of whether or not you'll be approved for a certain loan.
What are the eligibility requirements for most home loans?
Here are some criteria that most lenders look at when approving mortgage applications. Some are these are take into account with a calculator but some are only assessed in an actual application:
- Deposit amount. The larger your home loan deposit, the less risk a lender takes on by lending to you. As such, you can improve your eligibility for a home loan by saving for a larger deposit. This could attest to your ability to save regardless of the expenses you currently have.
- Credit history. Your credit history provides information regarding how well you repay your debts. A good credit score may enable you to borrow a higher amount because it would demonstrate that you are a reliable borrower. Loan processors also check your credit history to see if you have applied for bankruptcy in the past or have had foreclosures.
- Income. Your current income will also be a determinant of what you can borrow. A higher income might suggest that you are better able to make repayments on your home loan.
- Debts. Debts reduce your current income and savings, affecting your ability to repay your mortgage. Loan processors will usually calculate how much debt you have so that they can determine whether you will still have enough income to make monthly payments.
- Age. Your age is also a factor that is used by lenders to determine your eligibility. Young people may have less debts and their income may increase in the future depending on their occupation, so they might be a better bet for banks.
- Value of your home. You can use the equity on your current home loan to refinance your mortgage.
Getting a loan approved is tough, especially on your own
According to research in Finder's First Home Buyer Report, the number of suburbs that are affordable for a borrower on a single income in any state has fallen dramatically. In 2017 57% of suburbs were affordable for the median single borrower. Today it's just 16%. This has a massive impact on the eligibility of the average borrower trying to go it alone.
Why is it important to use a borrowing power calculator?
A borrowing power calculator gives you estimates of your borrowing limit depending on interest rates and your current income. Although the final decision of how much you can borrow lies with your lending bank, the calculator can be a great starting point to help you organise your finances in preparation for increasing the amount you are eligible for.
By simply inputting information such as your income, expenses and the amount you wish to borrow, you can easily calculate what you are eligible for and find a lender who can provide the financing you want at a rate and repayment plan that suits you.
With the help of the borrowing power calculator, you can work out what repayment plan would suit your income and current debt liabilities so that you can come up with a mortgage proposal that stands a good chance of being approved.
Sources
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11 Responses
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I am a NZ citizen moving to Melbourne and my first job is of 50,000 AUD per annum and I already bought land of approx 360,000 without any loan with my savings.
Now my question is considering my current situation where I am living with my family friends in Werribee with max day to day expenses of 150 per week including food, travel, phone, shopping etc.
I would like to know if I can borrow approx. 300,000 to construct my first home???
House will be worth AUD 750,000 upon completion.
Hi Victor,
Thank you for reaching out to Finder.
There may be a couple of things that the bank may be asking of you regarding your residency status if you are planning to permanently relocate to Australia. You may want to check our articles on first home buyer questions and home loans for temporary residents that may be helpful in answering some of your questions. You may also speak to a mortgage broker to know your options in taking out a home loan. Hope these help!
Cheers,
Reggie
Hello. I am a permanent resident working on fulltime role from last 6 months with one of australia big IT company. Do i need to wait for 2 years to become eligible for home loan?
Hi Aditya,
Thanks for reaching out to Finder.
Being an Australian citizen or permanent resident is one of the lending criteria in general. It does not specifically say that you have to wait for a certain number of years to become eligible for a loan. You may read more about the general lending criteria for home loans.
For you to start comparing home loan rates you may view the table above and you may also use our loan eligibility criteria on this same page that way you can get an estimate of your borrowing limit. Once you have chosen a particular lender, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with your loan application or get in touch with their representatives for further assistance.
Lastly you may want to speak with a mortgage broker so that you may discuss your options.
Cheers,
Joanne
Hi.
I’ve just gone back to work last wek after having a child and have not worked for 3.5years. My partner works part time and is here on a partner visa. He has continuously worked for the last 2 years he has been here. Would we still be eligible for a loan. And how long should i be employed before i go and enquire about a loan. Thanks
Hi Sonya,
Thanks for getting in touch.
For a joint application, most lenders prefer that you have both been in the same job for a continuous period of 12 months (or the same industry for at least 2 years) as this demonstrates that you have a reliable and consistent income source.
However, please keep in mind that each lender will have a different policy with regard to your employment situation, and your ability to qualify for a home loan will depend on a range of criteria including your income, assets, credit history as well as any debts that you have (e.g. personal loans or credit cards).
You can read our article about how to refinance (or get a home loan) once you have started a new job, which provides tips about how you can improve your chance of being approved.
I also recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application.
I hope this helps.
All the best,
Belinda
Hi, i am a nz citizen living in australia. Do i meet the criteria to take out a home loan?
Hi Kaye,
Thanks for the question.
Generally speaking, there are lenders who offer loans to Kiwis living in Australia, but these can come with extra restrictions and requirements depending on the lender, such as larger deposit requirements.
You may wish to contact a mortgage broker to find out what your chances of approval are, or speak directly with a lender you’re interested in to find out what their policy is.
I hope this helps,
Marc.
I arrived as a skilled migrant to South Australia 1 year back. Currently, I am employed on contract with one of the largest Australian companies. Am I eligible to apply for a home loan ?
Hi Rakesh,
Thanks for your question.
Yes, it is still possible to apply for a home loan with your current residency status. We recommend that you approach a bank with migrant services, such as the big four: Commonwealth Bank, Westpac, ANZ, and NAB.
Our guide to home loans for non-residents page could also be helpful.
I also recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application.
Cheers,
Shirley
Thanks Shirley. I was not aware that they had such services for migrants. Will look into it right away.