How is borrowing power calculated in Australia?

Lenders calculate borrowing power by assessing your income (after tax), subtracting living expenses, existing debt commitments and credit card liabilities, then determining how much you can repay at the APRA assessment rate.

What is the APRA 3% serviceability buffer?

APRA requires lenders to assess your ability to repay at an interest rate at least 3 percentage points above the loan product rate, with a floor of around 9%.

Why is my borrowing power lower than expected?

Common reasons include high credit card limits, existing debts, high living expenses, or having multiple dependants.

Can I increase my borrowing power?

Yes. Close unused credit cards, pay down existing debts, add a co-borrower, extend the loan term, or accurately declare all income sources.

Borrowing Power Calculator

Chat with our calculator to find out how much you could borrow based on your income, expenses and existing liabilities. Uses APRA's 3% serviceability buffer.

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