Bank-grade estimate of how much you can actually borrow. Includes APRA’s 3% serviceability buffer, HEM household expenses, and real Australian tax & Medicare.
You can potentially borrow
$0
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Monthly repayment
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at your entered rate
Serviceability rate
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rate + 3% APRA buffer
Monthly surplus
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after HEM + debts
Indicative only. Actual borrowing power depends on lender policy, credit history, employment type, deposit source and other factors. Talk to a broker for an accurate assessment.
Since 2021, APRA requires banks to assess whether borrowers can service a loan at their current rate plus 3%. This is the stress test: if rates rise, you should still be able to make payments. It reduces borrowing power significantly but protects borrowers from rate shock. Some lenders use 2.5% for specific products.
What is HEM and why does it matter?
HEM (Household Expenditure Measure) is a benchmark banks use to estimate your minimum living expenses. It scales with income and household size. Even if you spend less, most lenders won’t let you claim below HEM for serviceability. Kids add roughly $500–800/month each to HEM.
Why is this different from the bank’s pre-approval number?
Banks each have their own serviceability calculators with different HEM tables, income shading rules (some count only 70–80% of income for buffer purposes), and treatment of specific income types (bonuses, rental income, casual). This tool gives an indicative middle-ground estimate. Different lenders can quote 20–30% different amounts for the same borrower.
How can I increase my borrowing power?
Pay down credit cards (min payment counts against you), reduce credit card limits not just balances (banks assess by limit), close unused accounts, avoid buy-now-pay-later, and consider a longer loan term (30 vs 25 years). A mortgage broker can also match you to a lender with more favourable serviceability policies for your situation.
This calculator is educational only, not personal financial advice. Numbers are indicative — actual lender assessments vary based on their specific credit policies, your individual situation, and factors this tool cannot capture. Always speak with a licensed broker or advisor before making financial decisions. See our glossary for term definitions.