How Much Can You Actually Borrow? Understanding Your Borrowing Power in 2026

"How much can I borrow?" is consistently one of the most searched mortgage questions in Australia — and for good reason. It's the number that determines what's actually possible before you've even started looking at properties. But the figure a lender lands on isn't simply a multiple of your income. It's the result of several factors stacked on top of each other, some of which catch borrowers by surprise.

The serviceability buffer: the single biggest factor

Every lender is required to test whether you could still afford your repayments if interest rates rose. In practice, this means they assess your ability to repay at your actual rate plus a buffer — typically around 3 percentage points above what you'll actually be charged. So if you're applying for a loan at 6.1%, the lender is checking whether you could service it at somewhere near 9.1%.

This buffer exists to protect both the lender and the borrower from over-extension, but it's also the single largest reason your borrowing power estimate might be lower than you expected based on your income alone. It applies uniformly, regardless of how confident you are that rates won't rise that far.

HECS-HELP debt reduces what you can borrow

An outstanding HECS-HELP balance is treated as an existing liability in a lender's serviceability calculation, even though your compulsory repayments are only triggered once your income crosses a threshold and scale with income rather than being a fixed amount. Many borrowers are surprised to learn that a HECS debt sitting in the background, seemingly unrelated to day-to-day cash flow, can measurably lower their borrowing power.

Dependants and undrawn credit limits both count against you

Lenders factor in a standardised living expense allowance that increases with the number of dependants in your household — regardless of what you actually spend. Separately, any credit card or personal line of credit you hold is assessed at its limit, not your outstanding balance. A credit card with a $10,000 limit that you pay off in full every month is still counted as a $10,000 ongoing commitment in most lenders' calculations. If you're planning to apply for a home loan, reducing card limits you don't need is one of the more overlooked ways to lift your borrowing power before you apply.

Why the same numbers produce different results at different lenders

This is the factor most borrowers don't realise until they've compared more than one lender directly: two lenders assessing the identical income, debts and living expenses can arrive at borrowing power figures tens of thousands of dollars apart. Each lender sets its own serviceability policy — some use more conservative living expense benchmarks, some treat particular income types (bonuses, rental income, self-employed earnings) more favourably than others, and buffer application can vary slightly between products.

This is the core reason working across a panel of lenders, rather than applying with a single bank, matters. It's not just about finding the lowest rate — it's about finding the lender whose calculator actually reflects your situation most favourably, which can be the difference between a borrowing power figure that works for the property you want and one that doesn't.

Getting a real number, not an estimate

Online borrowing power calculators are a reasonable starting point, but they can't account for your specific mix of income type, existing debts, dependants and the particular servicing policy of each lender on a panel. If you're at the stage of genuinely needing to know what's achievable — rather than a rough ballpark — that's a conversation worth having directly. It also pairs naturally with getting your household budget in order first; see our recent piece on household budgeting approaches if you're working out what you can comfortably commit to before you apply.

This article is general information only and does not take into account your personal financial situation. Ian Freeman is a Credit Representative (No. 439731) of Finsure Finance & Insurance Pty Ltd (Australian Credit Licence 384704). Want your actual borrowing power, not an estimate?