Your borrowing power depends on more than just your salary. Use our free calculator for a personalised estimate, or browse by income level below.
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Calculate my borrowing power →Banks don't simply multiply your salary by a fixed number. They run a detailed serviceability assessment that considers your net income after tax, your living expenses (with a minimum HEM floor), your existing debt commitments, HECS repayments, and credit card limits — then stress-test the result at your actual rate plus a mandatory 3% buffer required by APRA.
This is why two people on identical salaries can have very different borrowing capacity. A $20,000 credit card limit at zero balance still counts against you. Two children add approximately $1,200 per month to your minimum expense floor. A $30,000 HECS debt at $100,000 income reduces capacity by around $60,000-80,000.
The factors that most commonly surprise first home buyers are credit card limits (assessed at full limit regardless of balance), HECS debt (treated as a committed monthly expense), and living expenses below HEM being overridden by the bank's minimum benchmark.
HEM (Household Expenditure Measure) is a benchmark Australian banks use as a minimum living expense floor. If your declared expenses are lower than HEM, the bank uses HEM anyway. For a single person in a capital city it's approximately $2,333/month; for a couple around $3,500/month.
LVR (Loan to Value Ratio) is your loan amount divided by the property value. An 80% LVR means you're borrowing 80% and have a 20% deposit. Above 80% LVR, Lenders Mortgage Insurance (LMI) typically applies.
APRA requires banks to assess your application at your actual interest rate plus 3%. So on a 6.5% variable rate, they test serviceability at 9.5%. This ensures you can still make repayments if rates rise significantly.
Yes — significantly. Banks treat your compulsory annual HECS repayment as a committed expense, reducing what's available for mortgage repayments. On a $100,000 salary a HECS debt reduces borrowing capacity by approximately $30,000.