๐ How Much Can I Borrow?
๐ฐ What Are My Repayments?
๐ What Limits My Borrowing?
Close or reduce credit card limits
Each $10,000 of credit card limit reduces your borrowing power by approximately $50,000-60,000 โ regardless of your balance. Closing unused cards before applying is one of the highest-impact actions you can take.
Choose the lender with the lowest rate
Each 0.5% reduction in your actual loan rate (and hence assessment rate) adds approximately $25,000-$40,000 to your borrowing capacity. Online lenders offering 5.89% vs bank rates of 6.5% can add $60,000+ to your maximum loan.
Add a co-borrower
Adding a partner or spouse with income combines both incomes for the assessment โ often more than doubling borrowing power. Each applicant's debts are included, so ensure the co-borrower's liabilities are also low.
Pay down HECS before applying
At $80,000 income, HECS repayments of $3,600/year reduce assessed surplus income and can cut borrowing power by $30,000-$45,000. Making voluntary HECS repayments before your application date can help.
Reduce declared living expenses
Lenders use the higher of your declared expenses or the HEM benchmark. Only legitimate reductions in actual expenses help โ don't understate living costs as lenders can request bank statements to verify.
Increase your deposit
A larger deposit reduces the loan amount needed and can move you below the 80% LVR threshold โ eliminating LMI costs and sometimes unlocking better rates. Even $5,000 more deposit reduces both the loan and LMI cost.
How much can I borrow on a $100,000 salary in Australia 2026?
On a $100,000 gross salary with no dependants, minimal debts (no HECS, $5,000 credit card limit) and at current assessment rates (~9.5%), most lenders will assess borrowing power of approximately $450,000โ$520,000. Joint income of $150,000 would typically allow $650,000โ$780,000. These are estimates โ use our calculator above for your specific situation.
What is the APRA 3% serviceability buffer?
APRA (Australian Prudential Regulation Authority) requires all regulated lenders to assess mortgage applications at the borrower's actual interest rate plus 3 percentage points. With rates at 6.25โ6.5% in May 2026, lenders are assessing at approximately 9.25โ9.5%. This buffer was introduced to ensure borrowers can still afford their loan if rates rise significantly. It significantly reduces borrowing power compared to what you'd qualify for if assessed at the actual rate.
How does HECS affect home loan borrowing power?
HECS/HELP repayments are treated as a mandatory debt obligation by lenders. At $80,000 income, the compulsory HECS repayment is approximately $3,600/year ($300/month). This reduces your assessed net income and can reduce your borrowing power by $30,000โ$45,000 depending on the lender's methodology. Some lenders treat HECS more conservatively than others โ worth comparing lenders if HECS is a significant factor.
How much does a credit card limit reduce my borrowing power?
Most Australian lenders assess credit card exposure at 3.8% of the credit limit per year โ not the outstanding balance. This means a $10,000 credit card limit reduces your assessed annual surplus by $380, which reduces borrowing power by approximately $45,000โ$60,000. A $30,000 total credit card limit can reduce borrowing power by $135,000โ$180,000. Closing unused cards or reducing limits well before application is the highest-impact single action most buyers can take.
What is HEM and how does it affect borrowing power?
HEM (Household Expenditure Measure) is a benchmark of minimum living expenses calculated by the Melbourne Institute. Lenders use the higher of your declared living expenses or the relevant HEM benchmark for your income and family size. If you declare lower expenses than HEM, the lender will use HEM regardless. Overstating expenses hurts your borrowing power; you cannot improve it by understating expenses as lenders use HEM as a floor.
Is the APRA buffer going to be reduced?
As of May 2026, APRA has maintained the 3% buffer with no announced plans to reduce it. Industry groups including the HIA and MBA have advocated for a reduction to 2.5%, arguing the current buffer is too conservative given that rates have already risen significantly. APRA reviews the buffer periodically but decisions are based on overall financial stability conditions. Any change would be announced by APRA separately from RBA rate decisions.
Does overtime income count for home loan borrowing power?
Generally yes, but with conditions. Most lenders require 2 years of consistent overtime history documented in payslips and tax returns to include it at 100% in their assessment. Some include it at 80% with 1 year of history. Irregular or non-guaranteed overtime may be discounted or excluded. Self-employed income typically requires 2 years of ATO-assessed tax returns and lenders use the lower of the two years' income.
