Borrowing Capacity Calculator
That question sits behind almost every property decision you’re about to make, and until you have a real answer, everything else feels a bit like guesswork. Your borrowing capacity is the amount a lender is likely to approve you for, based on your income, your expenses, your existing debts and a few other moving parts.
At Penny, we go beyond the numbers. We’ll help you work out a realistic estimate below, then show you what actually moves that number once we look at your situation across our 50+ lender panel, at no cost to you. Not sure where to start?
Borrowing capacity (sometimes called borrowing power) is the maximum amount a lender will let you borrow for a home loan, based on what they think you can comfortably repay. It’s not the same as what you’d like to borrow, and it’s not the same as what you can afford day to day either. It’s the lender’s number, worked out from your financial picture.
Here’s the part most people don’t realise: every lender calculates it a little differently. Two banks looking at the exact same payslip can land on two very different figures. That’s one of the biggest reasons a broker who compares across many lenders can often find you more room than going to a single bank direct.
Use the calculator below to get a quick, indicative estimate. Pop in your income, your regular expenses, any existing debts and your household details, and we’ll give you a ballpark figure to work with.
This is a starting point, not the final word. Every lender applies their own living expense benchmarks, income treatment and buffers, so your real number can shift depending on who you apply with. For a fuller, more detailed version of this tool, you can also try our borrowing capacity calculator.
Want a lender-matched figure instead of an estimate? Let’s map it out together on a free discovery call.
Your borrowing capacity isn’t just about your salary. Lenders build a full picture before they land on a figure, and a handful of factors do most of the heavy lifting.
There’s also a newer factor worth knowing about. From February 2026, APRA introduced formal debt-to-income (DTI) limits, capping how much of a lender’s new lending can go to borrowers with total debt at six times their income or more. In plain English, if you’re carrying a lot of existing debt relative to your income, some lenders now have less flexibility to approve you, even if your repayments look manageable on paper.
Not every dollar you earn or spend is treated equally once it lands in front of a lender. Here’s a simplified breakdown of how it generally works.
Base salary
Counted in full
Overtime and bonuses
Often shaded (partially counted), varies by lender
Rental income
Usually counted at 70-80% of the total
Self-employed income
Averaged over 1-2 years of tax returns, policies vary widely
Living expenses (declared)
Compared against the HEM benchmark, whichever is higher is used
Credit card limits
Counted on the full limit, not the balance owing
HECS-HELP debt
Reduces net income once compulsory repayments kick in
A few practical moves can genuinely shift your number before you apply:
This is the bit a single bank calculator will never tell you. Each lender sets its own HEM benchmark, its own rules for treating overtime, bonuses and self-employed income, and its own appetite for high-DTI borrowers. That means the number you see on one bank’s website could be conservative compared to what another lender would actually approve you for.
With 1000+ loans settled and access to a 50+ lender panel, we spend our time learning exactly where each lender’s policies work in your favour, so you’re not stuck with the first number you’re given. It’s a no-cost service to you, since Penny is paid by the lender, not the borrower.
Know your number, now let’s find the right loan to go with it.
Not exactly. It gives you a solid ballpark based on the details you enter, but real approval depends on the specific lender’s policies, your full documentation and their current serviceability rules. Think of it as your starting point for a conversation, not a guarantee.
Each dependant increases the living expenses a lender assumes you have, which reduces the surplus income available for loan repayments. It’s one of the more overlooked factors, and it’s worth factoring in early if your family situation is changing.
Yes, generally. Most lenders average your income over one to two years of tax returns rather than using a single year’s figure, and policies on how they treat that income vary a lot from lender to lender. This is exactly the kind of thing our 50+ lender panel helps with, since some lenders are far more generous with self-employed income than others.
Often, yes. Closing unused credit cards, paying down existing debts, and making sure all your income is properly documented can genuinely move the number. We can talk through what’s realistic for your situation on a discovery call.
Your borrowing capacity is just the starting point. What matters more is finding the lender and the loan structure that actually works for what you’re trying to build, and that’s where we come in. Beyond the numbers, with no cost to you and 50+ lenders to compare, we’re in your corner from the first estimate through to settlement.
Book a free 15-minute discovery call, or call us on 1800 958 021.
