“How much can I borrow?” is the first question almost every buyer asks, and the honest answer is: it depends which lender you ask. The same income and expenses can produce approved amounts that differ by $150,000 or more between banks, because each lender assesses income, expenses and debts by its own rules.
The short answer
As a rough rule of thumb, most Australian households can borrow somewhere between five and six and a half times their gross annual income, provided their expenses and existing debts are under control. A household earning $160,000 might borrow roughly $800,000–$1,000,000, but the spread between the most conservative and most generous lender is significant.
What lenders actually look at
- Income: salary, and how much of your overtime, bonuses, commissions or rental income the lender is willing to count. This is where lenders differ most.
- Living expenses: your declared spending, benchmarked against the Household Expenditure Measure (HEM).
- Existing debts: car loans, HECS/HELP, personal loans and buy-now-pay-later commitments all reduce capacity.
- Credit card limits: lenders assess the full limit, not the balance. A $20,000 unused limit can cut borrowing power by close to $100,000.
- The serviceability buffer: lenders must test that you could still repay if rates rose 3% above your actual rate.
Get a ballpark figure in under a minute with our borrowing capacity calculator, powered by the MFAA suite.
Open the borrowing capacity calculator →Why every lender gives a different answer
One bank counts 80% of your overtime; another counts all of it. One applies a conservative haircut to self-employed income; another averages your best two years. This is exactly where a broker earns their keep: instead of you applying blind, Nathan runs your scenario through 50+ lenders’ actual policies and targets the ones that read your income most generously.
How to increase your borrowing power
- Cancel or reduce credit card limits you don’t use.
- Close buy-now-pay-later accounts before applying.
- Trim discretionary spending for the three months before your application.
- Consider whether HECS/HELP repayment or a small debt payout changes the equation.
Small clean-ups made a few months before you apply can add six figures to what a lender will approve.
Is a bank’s online calculator accurate?
Treat any online calculator, including ours, as a starting point. They can’t see lender policy niches, your credit file, or how your income type is treated. The only number that matters is the one on a formal pre-approval. That’s a free conversation with Nathan, usually inside 30 minutes.