Home Loan Borrowing Power Calculator

Borrowing power, also known as borrowing capacity, is the loan amount that a lender is likely to approve a borrower for.

Find out your borrowing capacity in seconds by using our borrowing power calculator above.

Speak to an Aussie Broker if you'd like to receive a more accurate borrowing power estimate based on your choice of lender.

Borrowing capacity is calculated using several factors, including your personal details, income (such as your salary and any other income you earn) and expenses (such as your living expenses and personal loans).

Each lender will have their own criteria for borrowing power, so your borrowing power may differ slightly from lender to lender.

There is no one-size-fits-all number when it comes to borrowing power. Generally, it may be a good idea to ensure your home loan repayments don't exceed 30% of your gross income.

Try Aussie's Home Loan Repayments Calculator to discover your estimated repayments so you can determine what may be viable for your situation.

With a guarantor, you could usually borrow up to 95% of the value of a property without paying Lenders Mortgage Insurance. However, the maximum LVR changes from lender to lender.

Having a guarantor means that the loan is secured by two properties, reducing the lender's risk. It's important to remember that you'll still need to show a lender you can meet repayments yourself, as guarantors don't typically make financial contributions to your mortgage repayments.

The easiest way to get an idea of your borrowing power is to use our Mortgage Repayments Calculator.

There are several ways you could increase your borrowing power. Some of these include:

• Pay off your debts
• Improve your credit score
• Claim all your income
• Cut down on your expenses
• Reduce your credit card limits
• Save more for your home loan deposit
• Extend your home loan repayment term
• Strengthen your savings habits

You can read more about how to boost your borrowing power here.

Yes, HECS-HELP debt will generally affect your borrowing power, just like any other debt.

How this affects your borrowing power will depend on the amount owing and the minimum repayment rate, which is determined by your income.

Find out more about recent HECs home loan changes and what it means for your borrowing power.

Several factors can impact your borrowing power, but lenders will typically take the following into consideration:

• Income and assets
• Credit history
• Savings history
• Debts
• Typical monthly spending
• The type of loan you want, as well as the loan term and interest rate
• Home loan deposit size
• The market value of your desired property
• Personal characteristics such as age, job and number of applicants

You can read more about what impacts your borrowing power here.

Home equity is the difference between a property's current market value and any debt held against it. Basically, it is the proportion of the home that you own outright.

It's important to remember, though, that you might not be able to use the entire amount of your available equity, depending on how property prices are performing.

Lenders will generally allow you to borrow 80% of your home's current value, minus your outstanding debt.

Yes, if you have equity in an existing property you could substantially boost your borrowing power. Lenders will likely lend you no more than 80% of your home's current value.

To calculate your home's usable equity, take 80% of the value of your property minus your outstanding loan balance.

For example, let's say your property's value is $500,000 and you have an outstanding loan balance of $200,000:

• Your home's value = $500,000 x 0.80% = $400,000
• Your home's potential useable equity = $400,000 – $200,000 = $200,000

So, if your home is worth $500,000 and you still owe $200,000 on your mortgage, you have $200,000 of useable equity towards the purchase of an investment property.

But you'll still need to show the lender you can afford the repayments on the full loan amount, which will include both the previous mortgage and the new one. You can learn more about accessing equity by refinancing your home loan, and use our Mortgage Repayments Calculator to get a better idea of your estimated repayments.