How Much Can I Borrow?
The How Much Can I Borrow calculator will help you determine your borrowing capacity by factoring in your current income and expenditure. Your expenses will be assumed to differ depending on whether it is a single or joint application loan, and your number of dependants (someone you support financially like a child). Apart from determining your maximum borrowing capacity, this calculator will also give an estimate of what your monthly repayments will be.
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Find Out Your Maximum Borrowing Capacity?
Your borrowing capabilities will vary between lenders and is dependant on your circumstances, the interest rate and your preferred lender’s lending policy. To find out what your maximum borrowing capacity is, get an experienced mortgage broker to assess your borrowing options across a wide range of lenders. Simply email the form below or call us on 13 LOAN (or +61 2 9249 3739) and we will contact you within 2 business hours.
Note: The results from this calculator should be used as an indication only. Results do not represent either quotes or pre-qualifications for a loan. It is advised that you consult your financial adviser before taking out a loan.
Calculator Assumptions
Expense Details
a) Credit card minimum monthly payment percentage – currently 5% of credit card limit
b) Core expense annual allowance – borrower assumed to have core level of annual expense, depending on whether single or joint and the number of dependants, currently as below:
| Number of dependants | Single | Joint |
| 0 | $11,400 | $14,400 |
| 1 | $14,280 | $17,280 |
| 2 | $17,160 | $20,160 |
| 3 | $20,040 | $23,040 |
| 4 | $22,920 | $25,920 |
c) Extra core expenses for more than 4 dependants – currently set at zero.
d) Maximum percentage of income available – percentage of income available for paying expenses and servicing proposed borrowing currently set at 85%.
Loan Details
a) Interest rate increase allowance buffer – calculator has capability to assume a higher interest rate than rate entered by user when determining maximum amount that can be borrowed. This allows for affordability of possible rate increases under the loan. Current version of the calculator uses an interest rate buffer of 1.5%.
b) Rounding rules for amount of loan – the calculator has the ability to round the maximum loan amount. The default is usually the current setting of the lower $1,000. Note that the amount of loan is calculated using the interest rate entered, plus any interest rate buffer, and then the resulting loan amount is rounded as required.
c) Interest rate for loan repayment – monthly repayment is calculated in respect of the rounded loan amount and using interest rate entered, not including any interest rate buffer.
Length of Month
All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days’ interest dependent on the number of days in the particular month.
Number of Weeks & Fortnights in a Year
One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.
Rounding of Amount of Each Repayment
In practice, repayments are rounded to at least the nearer cent. However the calculator uses the unrounded repayment to derive the amount of interest payable at points along the graph and in total over the full term of the loan. This assumption allows for a smooth graph and equal repayment amounts.
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More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
