What actually affects your borrowing power

Every lender runs its own serviceability calculation, but most weigh up a similar set of factors:

  • Income — gross income from employment, and how much of it a lender counts (some income types, like bonuses or overtime, may be assessed differently).
  • Living expenses — lenders assess your declared expenses against a benchmark, not just what you think you spend.
  • Existing debts — including credit cards and buy-now-pay-later limits, which are usually assessed at their full limit, not your current balance.
  • Dependants — more dependants generally means higher assessed living costs, which reduces borrowing capacity.
  • Employment type and history — some lenders treat casual, contract or self-employed income more conservatively.
  • Credit history — your repayment history and any defaults can affect both how much you can borrow and which lenders will consider your application.

Because these variables interact differently at every lender, the same borrower can get quite different results from different lenders — which is exactly where comparing across a panel of lenders earns its keep.

Frequently asked

How accurate is a borrowing power calculator?

An online calculator like this one gives a rough, general indication only. Every lender applies its own serviceability assessment — considering income, expenses, existing debts, credit history and the specific loan product — so an accurate figure requires a full assessment with a broker or lender.

What factors affect how much I can borrow?

Lenders generally consider gross income, existing debts and credit limits, living expenses, number of dependants, employment type and history, credit history, and the deposit or equity available, among other factors.

Why does my estimate differ between calculators?

Different calculators use different assumptions and formulas, and none replicate an actual lender's serviceability calculator exactly. This is why an indicative estimate should always be followed up with a personalised assessment before you rely on a figure.