▸ Why this isn't like the other calculators
| Factor | Typical bank calculator | This calculator |
|---|---|---|
| Living expense floor (HEM) | ❌ Takes your declared figure | ✅ Melbourne Institute HEM floor |
| APRA 3% serviceability buffer | ❌ Uses actual rate | ✅ Assessed at rate + 3% |
| PAYG tax + Medicare levy | ❌ Ignored or flat % | ✅ FY25-26 brackets + Medicare |
| HECS/HELP repayment | ❌ Not modelled | ✅ Tiered 1–10% by income |
| Credit card limit (not balance) | ❌ Uses balance or ignored | ✅ 3.8% of total limit / month |
| Bonus & overtime shading | ❌ Counted at 100% | ✅ Shaded to 80% |
| Rental income shading | ❌ Counted at 100% or ignored | ✅ Shaded to 80% |
| Dependents (HEM uplift) | ❌ Rarely modelled | ✅ ~$430/mo per dependent |
Result: numbers within roughly ±10% of an actual lender assessment. Individual lenders vary — a broker will find the one whose rules best fit your situation.
Borrowing Power Calculator
Lender-accurate estimate using FY25-26 rules
Applicant 1
150k or 1.2m▸ Add bonus, rental, debts & declared expenses
Estimate only. Individual lenders apply their own HEM tables, bonus/overtime shadings, and policy rules — typically within ±10% of this model. For a formal assessment, speak to a broker.
Worked examples — real numbers, this calculator
| Scenario | Borrowing power | Assessed monthly |
|---|---|---|
| Single, $100k, no debts | $518,621 | $4,444 |
| Couple, $100k + $80k, 2 kids | $861,814 | $7,385 |
| Single, $120k, $50k credit card limit | $401,150 | $3,438 |
| Couple, $150k + $120k, HECS both | $1,288,617 | $11,043 |
All figures at 6.72% actual / 9.72% assessed, 30-year P&I, no declared expenses above HEM.
The things bank calculators hide
HEM: the hidden floor under your expenses
When you apply for a loan, your "declared living expenses" are one input — but every lender also looks up a minimum figure in the Melbourne Institute HEM table based on your income, family structure, and postcode band. Whichever is higher, they use. Most online calculators just take your number. That's why the bank's own pre-approval often lands tens of thousands below a finder.com.au estimate.
APRA's 3% buffer: the biggest single gap
Since October 2021, APRA requires lenders to test you at the actual rate plus 3 percentage points. At today's ~6.72% variable rate, you're assessed at ~9.72%. A 30-year loan of $700,000 at 6.2% has a ~$4,280 monthly repayment; at 9.2% it's ~$5,720. The bank tests serviceability against the higher number.
Credit cards are measured at the limit, not the balance
Don't pay down your card — close it. Lenders assume you could max out any available credit, so 3.8% of the total limit (about $190/month per $5,000 of limit) is treated as an existing monthly debt, even on a card you never use.
HECS: quiet but expensive
Compulsory HECS/HELP repayments scale from 1% (~$56k income) to 10% (~$165k+). On a $120,000 salary, HECS removes roughly $45,000–$60,000 of borrowing power. Paying it off before applying for a loan is often the single highest-return move a buyer can make.
Bonus and overtime: only 80% counts
Unless you have 2+ years of consistent bonus history and the employer confirms it in writing, most lenders shade variable income to 80%. A $20,000 bonus becomes $16,000 of assessable income.
Ready to find a lender that actually says yes?
Every lender tweaks these formulas — some are more generous on bonuses, others on rental income, others on HEM. A good broker knows the differences and matches your profile to the lender that gives you the highest, cleanest pre-approval.