Borrowing power calculator
How much could you borrow in Perth?
Your borrowing power is the maximum home loan a lender is likely to approve based on your income, living expenses and existing debts. Lenders test your repayments at a rate higher than the actual rate to be sure you can cope if rates rise. Enter your numbers below for an indicative estimate, then confirm it with a broker.
Indicative only. Not credit assistance. [ASSUMPTION] A 3.00% serviceability buffer is added to your rate, repayments assessed over 30 years, with a simplified Australian tax approximation and a per dependant allowance. [ASSUMPTION] Lenders assess income, expenses and debts differently, so your real borrowing power can vary. Confirm with a CLS broker.
How it works
What is borrowing power and how is it worked out?
Borrowing power is the largest loan a lender will responsibly approve for you. It starts with your income, subtracts tax, living expenses, dependants and existing debt repayments, and uses the surplus to work out the loan you can service. Lenders test that surplus at a higher assessment rate to leave room if rates rise.
| Factor | Effect on borrowing power |
|---|---|
| Higher stable income | Increases it. |
| High living expenses | Reduces it. |
| Credit cards and personal loans | Reduces it, even unused card limits count. |
| Dependants | Reduces it, each child adds an assessed cost. |
| Assessment rate buffer | Reduces it, around 3% is added to the real rate. |
| Choice of lender | Varies, each lender assesses differently. |
Straight answer
Will checking borrowing power cost you anything?
No. This estimate is free and a real assessment with Central Lending Solutions costs most clients nothing, because the lender pays our commission when your loan settles. We are bound by the Best Interests Duty, in force since 1 January 2021, so we compare more than 30 lenders to find the one that suits you.
Common questions
Borrowing power FAQs.
What is borrowing power?
Borrowing power is the maximum home loan a lender is likely to approve based on your income, living expenses and existing debts. Lenders test your repayments at an assessment rate higher than the actual rate, called a serviceability buffer, to make sure you can still cope if rates rise.
Why do lenders use an assessment rate?
Lenders add a serviceability buffer, commonly around three percent, on top of the actual interest rate when they assess your loan. This buffer is required by the banking regulator APRA so borrowers are not stretched if rates rise. It is why your real borrowing power is usually lower than a simple repayment sum suggests.
Does this calculator guarantee how much I can borrow?
No. This is an indicative estimate, not an approval. Each lender assesses income, expenses, dependants and debts differently, so the amount they approve can vary widely. A Perth broker can compare lenders and find the one that gives you the most sensible borrowing power.
How can I increase my borrowing power?
You can lift borrowing power by reducing credit card limits and other debts, cutting discretionary spending, increasing stable income, and choosing a lender whose assessment suits your situation. A broker compares more than 30 lenders to find the structure that maximises what you can responsibly borrow.
Here to help
Find out what you can really borrow.
Book a free chat with a named Perth broker. We will run a proper assessment across more than 30 lenders. Most clients pay no fee.
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